Economy and ecology - contradiction or necessary unity in times of globalisation

Table of contents

Table of contents

Abbreviation list

1 Introduction
1.1 Posing the problem
1.2 Intentions
1.3 Proceeding
1.4 Differentiating the terms economy, ecology and globalisation
1.4.1 Economy
1.4.2 Ecology
1.4.3 Globalisation

2 Conflicts between ecology and economy
2.1 About the antagonism between ecology and economy
2.2 The booming Chinese market as an example for this antagonism
2.2.1 Reasons for the environmental problems in China
2.2.2 Environmental destruction in China
2.3 Global environmental problems
2.3.1 Shortage of natural resources
2.3.2 Consequences of the global warming process

3 Integrating ecology in economy
3.1 Political inducements for an ecological production
3.1.1 Emissions trading
3.1.2 Environmental laws and taxes
3.2 Institutional inducements for an ecological production
3.2.1 Eco-Management and Audit Scheme (EMAS)
3.2.2 International Organisation for Standardisation (ISO)
3.3 Social inducements
3.4 The “Klaus Steilmann Gmbh&CoKG” as an example for the successful integration of ecology in economy

4 Conclusion

References

Abbreviation list

Abbildung in dieser Leseprobe nicht enthalten

1 Introduction

1.1 Posing the problem

During the past two decades the impacts of industrial activities on the environment have become a prominent issue in debates on economic development. Nowadays you are almost every day confronted with both ecological and economical problems all over the world. In television and newspapers you are on the one hand faced with hurricanes, global warming and high petrol prices but also with high unemployment rates, insolvencies and rationalisations on the other hand – even concerning global players^[1] like Vodafone or GM.

Not only in your job you are confronted permanently with environmental prescriptions resulting from politics and society but also from your company’s environmental policy. Besides the utilisation of ecological materials in the production lines or the separation of waste throughout the whole firm, more and more companies concentrate on an economical input of natural resources respectively the input of renewable resources.^[2]

On the other hand every company aims to maximise its profit. Especially in economical difficult times the industrial sector is often even forced to concentrate on operational aims like maximising profit and minimising costs in all respects – also by neglecting ecological issues.

1.2 Intentions

This term paper intends to answer the question if economy and ecology are really contradictory terms or if it is even indispensable to unify them in times of globalisation when the markets are growing together and the competition is getting stronger and stronger. In addition the issue of sustainable development will be described and explained in the course of this term paper, as it is strongly connected with environmental destruction.

The author’s view is on the whole rather economic than operational, although he gives at the end an example of a company which has successfully integrated ecology in economy. Not considered are environmental measures of individuals like saving energy and avoiding waste in their households as well as the potential of ecological innovations in industries.

In fact this work rather wants to explain why it is nowadays absolutely necessary to integrate ecology in economy by describing the negative consequences for a company as well as for nature respectively for the whole globe by not doing so.

1.3 Proceeding

The author starts with general definitions of the terms ecology and economy and will then put these terms in the present context of globalisation by shortly explaining what globalisation actually means. Further on the author enters into the thesis that ecology and economy do not fit together by describing generally the antagonism between economy and ecology. Then he describes, considering as example the booming Chinese market, the consequences of a not sustainable development for nature: on the one side in China, on the other side all over the world - as the problem of environmental destruction does not stop at national frontiers.

After that the writer tries to explain why it is presently often necessary to integrate ecological aspects in the economic production process by pointing out some political, institutional and social inducements for this integration. Considering as example a very successful textile company, the author finally wants to illustrate the operational advantages of ecology’s integration in the production process.

1.4 Differentiating the terms economy, ecology and globalisation

1.4.1 Economy

Economy is the result of the original conflict between the shortage of goods on the one side and the human beings’ endless needs for goods on the other side.^[3] Economy is also the sum of all industrial, retailing and service providing institutions which were created by human beings. Additionally the industrial economy can be seen as a technological ecosystem without the ability of self-regulating, as it completely depends on human actions.^[4]

1.4.2 Ecology

Ecology is the study which deals with the relationships between organisms and their physical environment like forests, lakes, rivers, mountains, grasslands or moors.^[5] These ecosystems are self- regulating as long as the natural balance will not be disturbed.

Environmental protection is the summarised term for all measures which protect the balance of these ecosystems like purification of water and air, avoiding waste, minimising the dangers of radiation, etc.^[6]

1.4.3 Globalisation

Globalisation is a today often used term to express the process of creating global markets and relationships. It includes the internationalisation of the production, retail and service sector and the capital markets.^[7] Started in the early 1990s, this process furthermore includes the creation of new markets and the creation of international acting corporate groups by fusions and take-overs as well as the entanglement of these new created global players in international projects. The process is supported by new communication and information technologies.

The consequences of globalisation are a stronger international competition, shorter product cycles and the relocation of industries and services into low cost countries. This process leads to high ecological burdens and intensifies the environmental pollution which becomes a global challenge for mankind.^[8]

2 Conflicts between ecology and economy

2.1 About the antagonism between ecology and economy

Economy and society overcharge nature with their nearly endless needs for natural resources in order to produce the desired output of investment and consumer goods. The production and consumption of these goods also lead to the undesired output of waste, exhaust fumes, wasted water, exposure to radiation, etc.^[9] This negative effects can only be reduced by ecological innovations in the industrial sector which are connected with new investments. But those new investments will - for operational purposes – only be convenient if they increase the company’s competitiveness.^[10] Otherwise those investments respectively the ecological innovations become worthless, useless or even dangerous for the company’s prosperity.

2.2 The booming Chinese market as an example for this antagonism

The economic upturn of former Asian developing countries carries out without any environmental awareness. Reaching in every respect the standards of a developed country is at present the supreme objective of those socialistic governed nations.^[11]

In the following paragraphs the author will only consider China, as the facts concerning China are very similar to those of other emergent Asian nations like India and Taiwan and so do not have to be mentioned separately.

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^[1] big concerns, which not only contribute to the international market competition as importers and exporters, but also influence the international markets by high capital investments and their important market positions (http://www.wissen.de, 10-17-04)

^[2] compare: http://www.heute.t-online.de/ZDFheute/artikel/8/0,1367,WIRT-0-2128744,00.html, 10-15-04

^[3] Seidel/Strebel, 1991, page 7

^[4] idem, page 8

^[5] compare: Seidel/Strebel, 1991, page 39

^[6] compare: idem, page 8

^[7] compare: www.wissen.de, 10-20-04

^[8] compare: Detzer, 1995, page 3

^[9] Steger/Timmermann, 1993, page 12

^[10] compare: Blättel-Mink, 2001, page 10

^[11] compare: Bauer, 1997, page 301