zusammenfassung umweltmanagement by tuKkt86


									                            Umweltmanagement Wirl SS 2007

Concepts/Definitions of EM: 1. Chances: Differentiation of product in marketing, Cost
reduction (waste), pioneer-rents, political rents; 2. Costs: common costs, hidden costs due
to regulation, monitoring, training; liabilities, image 3. different policy approaches: end of
pipe (first pollution clean up afterwards, regulation of car exhaust), preventive, structural
Topical environmental problems: damages and pollutants: acid rain+sulphur dioxide,
ozone hole+ CfCs (Montreal), Ozone ground + Nox, radio acitivity+nuclear power, waste –
hazardous inert garbage, air+CO,NOx, Sox, particulants, effluent, noise, aesthetics,
natural habitats, species, genetics
climate change: kyoto protocol since 2005, without usa
montreal protocol on substances that deplete the ozone layer was agreed 1987, came
into force 1989, 29 countries plus the EEC ratified it. now only eleven state haven't.
Protocol was modified 5 times.
Emissions: the giving off of gases from industrial processes and the engine exhausts of
transport vehicles . As they occur on an industrial scale, even relatively harmless gases
can have an undesired effect (such as carbon dioxide contributing to the greenhouse
Immission: inserting of pollutants into the environment. every emission causes an
Footprint: The phrase "ecological footprint" is a metaphor used to describe the amount
of land and area a human population would hypothetically need to provide the resources
required to support itself and to absorb its wastes, given prevailing technology.
Footprinting is now widely used around the globe as an indicator of environmental
sustainability. It can be used to measure and manage the use of resources throughout the
economy. It is commonly used to explore the sustainability of individual lifestyles, goods
and services, organisations, industry sectors, neighborhoods, cities, regions and nations.
SO2 Certificates in USA: a) 1990: clean air act: 1. national aggregated ceiling for SO2
emissions of specified power plants. 2. these definde the number of certificates,
certificate= pollution permit. 3. allocation following the grandfathering principle (free of
charge). b) first trade of certificates already in 1992. c) since 93 annual auction, the EPA
auction is a so called discriminating auction. d) certificates can change hands privately
instead of an auction as well. e) since 95 certificates can be deposited on banks and used
in later periods (but not vice versa) f) engineers models of abatement costs estimate per
tonne SO2 around $300 g) summary: the best known program of certificates, more
efficient market by midyear 94, extremely cost-efficient compared to exante estimations,
political-economic problem
Environmental Kuznets Curve: It is claimed that many environmental health indicators,
such as water and air pollution, show the inverted U-shape,in the beginning of economic
development, little weight is given to environmental concerns, raising pollution along with
industrialization. After a threshold, when basic physical needs are met, interest in a clean
environment rises, reversing the trend. Now society has the funds, as well as willingness
to spend to reduce pollution. This relation holds most clearly true for a few pollutants, such
as sulfur dioxide and nitrogen oxide, but there is little evidence that the relationship holds
true for other pollutants, especially those with non-local effects (e.g., greenhouse gases),
or for the environment in general. Kurve: y=CO2, x=GDP
Asbestos litigation is the longest, most expensive mass tort in U.S. history. Analysts have
estimated that the total costs of asbestos litigation in the USA alone is over $250 billion.
the theory of comparative advantage explains why it can be beneficial for two parties

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(countries, regions, individuals and so on) to trade if one has a lower relative cost of
producing some good. What matters is not the absolute cost of production but the
opportunity cost, which measures how much production of one good is reduced to produce
one more unit of the other good. Frank Graham showed 1923 that this model takes some
unrealistic assumptions (e.g. constant returns are absurd).
Env. Policy Instruments: Taxes (efficient, tax=marginal damage), Standards (absolute
st. are inefficient unless first best price is optimallay set at the outset; realtive, technical
standard is inefficient even for prescribing the efficient standard), Liability (efficient,
polluter must compensate the pollutee for the damage, polluter pays principle), Permits
(second best efficient irrespective of initial distribution, no tax robbery of firms, not optimal
in noncompetitive pollution markets), Voluntary Standards (ISO, British Airways);
Voluntary Mechanism: Iso, Company reports (only makes sense when an independant 3.
party controls it), strategic element
History-Austria: pre-industrial society, medieval agrarian revolution: two-field + clearing
(population growth), lead to soil erosion, forests as a crucial resource (fuel, enormous
demand for production of salt and iron), leads to over-exploitation, and then natural
catastrophes (landslides, avalanches), emissions: sulfur, arsine, cobalt, silver, mercury,
copper, poison huts.
Industrialization=Coal Age: cities-problem of agglomeration (water, effluent, emissions,
waste), pollutants (soot, sulfur, carbon monoxide), 20th cen. increasing international and
global concern.
Foundations of Env. Economics: 1. A Pigovian tax is a tax levied to correct the
negative externalities of a market activity. For instance, a Pigovian tax may be levied on
producers who pollute the environment to encourage them to reduce pollution, and to
provide revenue which may be used to counteract the negative effects of the pollution.
Government intervenes. A key problem with Pigovian tax is that of calculating what level of
tax will counterbalance the negative externality. 2. Coase: the theorem states that in the
absence of transaction costs, all government allocations of property rights are equally
efficient, because interested parties will bargain privately to correct any externality. The
Coase theory provides the economic basis to the 'cap and trade' approaches to
addressing climate change. Critic: In many cases of externalities, the bargaining doesn't
happen between two economic actors, but instead the parties might be a single large
factory versus a thousand landowners nearby. In such situations, say the critics, not only
do transaction costs rise extraordinarily high, but bargaining is hindered by basic prisoner's
dilemma problems. For instance property rights might say the landowners must pay the
factory to stop polluting, certain landowners might downplay the harm of pollution on them,
trying to free ride on the other landowners' wallets.
Abatement: it can be optimal if bargaining is infeasible that the pollutee pays. polluter-
pollutee dichotomy is doubtful in a general social context. fencing game: pollutee pays is
more efficient. Problems: liability: dangerous with private information (deters protection,
encourages gaming). Positive Round-up: with dispersed pollution: difficult bargaining.
Environment+Competitiveness: I) Taxonomy of cost of environmental regulation:
government administration of env regulation (monitoring, enforcement), Private sector
compliance (capital, operating), other direct cost (legal, shifted mgt-focus, disrupted
production), negative costs (less resource inputs, worker health, innovation stimulation),
general equilibrium effects (product substitution, discouraged investment, retaded
innovation), Transaction costs (loss of middle class jobs, economic security impacts).
II) Dahl: highlights the significant potential for business leadership in the field of

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environment and sustainable development. private sector can ensure supplies of raw
materials, increase efficiency, generate new technologies, open up new markets, reduce
costs, allow more time for adaptation.
III)Porter, van der Linde: 1. proper designed environmental standards trigger innovations
that cover the total cost of a product or improve its value. Win-win situation between
business and environment. 2. regulation - restriction – re-engineering - detect inefficient
uses (pollution= residues) – less inputs – discover different means – reduce costs 3.
problems: managers leave money on the sidewalk, any kind of regulation
Production Management under Env. Constraints: Extending Activity Analysis:
stochasitc: Kistner/Steven: systematic risk: risks associated with regular production,
probabilites of failures are known. unsystematic risk: unforseeable, no probabilities are
given. approach: chance constrained program: the probability of meeting the
environmental constraint (βlmax) exceeds αl. the probability of exceeding is below (1-αl).
Case1: random targets, Case2: random emission coefficient, deterministic standards
Production of 1 good, 6 processes, 3 machines: constraints: 1x1+3x2 ....<19, γ=C^1x≤γ
max, objective: max Σxj, L=F(x1...xn)-Σμj*gj(x1...xn)

Evaluation of green products and services:
Objectives + Motivation: Marketing, different kinds of utilities from env. services:
1) indirect, avoidance costs, transportation costs, hedonic prices,
2)direct (consumptive=hunting, non-consumptive=bird watching)– contingent valuation
method ,
3) no use: existence value

Uncertainty: Arsen, Value of Life + Discounting: present vs. future benefits, Bt=benefit i
period t, Costs of action (Kyoto Protoco),
a) static: B-C larger (do) or smaller 0 (don't),
b)dynamic – deterministic: B0+B1/(1+r)+B2/(1+r)² ... -C=ΣBt/(1+r)^t-C, r=discounting
factor, net present value rule, distant future values shrink dramatically,
c)dynamic-stochastic: real option ie timing of action is also important, global warming
here and now or wait and see

Indirect methods of evaluation:
a) idea of avoidance costs: if people are willing to spend x€ on reducing environmental
damage, then a corresponding reduction of the env. damage must be at least as
beneficial. important to know for making perspectives, uses real data.
b) transport costs: what is the value of the lake? Costs|Population n|Visits B|Real visits
b=B/N*1000, Assumption: people in different regions are alike, Idea: construct demand
functions: for entry fees, consumer surplus, inverse demand, x=quantity, y=€, K=k+p,
p=entrance price; Problems: multiple use tripx, identical willingness to pay across regions,
costs of time=wage, substitution (find another lake)
c) hedonic prices: idea: expenditures for items with different environmental attributes
allow to infer on the willingness to pay for such improvements, example: labor market risk,
real estate market: region|env. quality/immissions |Implicit price|population, question:
benefit of lowering emissions by 100 units in each region, problems: observed prices are
equilibrium prices, identical households, distortion due to rent controls, any measure that
reduces immissions by 100 units at costs below 8000 is beneficial

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Direct methods - contingent valuation questionnaire interview:
problem: 1. willingness to pay < willingness to accept, 2. numbering: willingness to accept
can be infinite if no substitute exists, 3. hypothetical
a) voluntary environmental management systems: motives: marketing, signaling to
investors who fear liabilities, investors respond negatively to negative env. reports
(documented), anticipation of potentially more strictly regulations, institutionalized trough
EPA (green lights, waste wise, climate challenge),show the participants the observable
b) Corporate Social Responsibility (CSR) is a concept that organizations, especially (but
not only) corporations, have an obligation to consider the interests of customers,
employees, shareholders, communities, and ecological considerations in all aspects of
their operations. This obligation is seen to extend beyond their statutory obligation to
comply with legislation. Sustainability: satisfying the need of today without infringing future
generations' welfare, Reasons: moral, sustainability, licence, reputation, examples: Toyota
Prius, Urbi (Mexico) novel financing of homes for disadvantaged buyers, Credit Agricole
France finances energy saving investments
c)United Nations Global Compact is an initiative to encourage businesses worldwide to
adopt sustainable and socially responsible policies, and to report on them. Under the
Compact, companies are brought together with UN agencies, labour groups and civil
society. Objectives: mainstream the ten principles in business activities around the world +
catalyse actions in support of UN goals
Conceptualization I: simple analytics of voluntary standards:
a) motivation: This paper investigates the strategic decisions about company standards,
i.e., whether to adopt a standard and if possible how stringent the standard should be, and
the operational choice of care employed in meeting the chosen standard. Throughout the
paper the voluntary standard is an environmental one, although the framework applies
also to other restrictions, e.g., on child labor and corruption. It turns out that accounting for
uncertainty leads to counter-intuitive results, which provide the second motivation besides
the topicality of the managerial issue. More precisely,
although intuition suggests that choosing a tighter standard goes hand in hand with
increasing abatement, a higher level of abatement should induce the choice of a tighter
standard, higher market penalties for violating the voluntary standard should encourage
abatement and a less stringent standard, all those plausible claims are not valid in general.
b) model: x=pollution, stochastic, a=abatement (0,1), g(a,x)=a*g(1,x)+(1-a)*g+(0,x);
density of pollution at abatement activity a, cumulative distribution function G0>0 first order
stochastic dominance, i.e. increasing a reduces the probability of pollution in excess of any
level x. Assumption: full insurance against x<x' not possible; X,Y are random variables,
with cumulative distribution functions F(f(x), x) and g. then: x is called stochasitc ally larger
than y iff. G(x)>F(x),
c) results:
case1: standard (x') given, voluntary or not, decision – operational – abatement, min
C=c(a) + (1-G(a,x'))f, c(a)=cost of abatement, 2. term= probability of exceeding standard,
f=fine, G=aG1+(1-a)G0, C'(a)=f ⌠[g1(x)-g0(x)dx, result: f rises, a rises, i.e. higher fines
increase abatement, relaxing environmental standards increases abatement efforts and is
thus beneficial for the environment # strategic level: how green to paint the company?
K(a,x')=c(a)+(1-G(a,x')f+β(x'-y), β=gain from greenery, y=industry std., assume first: a
fixed: β rises x'falls, y rises x' rises, a rises: 1. x'<^x dann x'rises, 2. x'>^x dann x' falls#
Managerial reason for puzzling outcome: higher fines lower abatement + increase pollution

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Conceptualization II: Trade Offs: the company uses x (polluting input, ie chemicals). the
higher q (env. quality with costs V(q), V'>0 and V''>0) is, the more efficient (Ф= Ф(q), Ф'>0,
Ф''<0). z=x/ Ф abatement, pollution. x will be implemented in the production. Induced
damage will lead to liabilities (without regulation at costs C) with ρ probability.
1. the higher the expected liability ( ρ + C) the higher levels of quality should be maintained
by the env. management.
2. the more env. quality affects demand and costs of capital the better the env.
management should be.
3. the degree of industrial organization (number of competitors, parameter n) has no clear-
cut effect on the quality of the env. management.

Information based env. management1: iso 14001 vs emas:
aim: both stress a voluntary commitment to env. developed by different bodies at different
times. din en iso 14001 is worldwide acknowledged and is thus used by firms operating
also outside europe. emas is considered as more demanding but is limited to Europe.
since 2001 iso 14001 is part of emas.
differences in certification: iso by private certification companies. emas by the state or
organizations and professional authorized by the state.
further differences: iso is less complex, major advantage of iso is its compatibility with
known quality management systems globally, emas stresses continuous improvements,
iso is more flexible with respect to concentrate measures, env. reports: mandatory under
emas, voluntary for iso.
Incentives for Certification: continuous improvements of env. protection, motivation of
employees, recognizing weaknesses in resource and energy use, increased legal security,
image, minimize env. and other liability risks, cost reduction.

Energy Conservation Programs: s=e*y, u(s)-pe-dK(y) → max. e, y, max (y) [max(e) u(s)-
pe]-dK(y), at t=0 = K(y) time arrow goes to L, short run max (e) u(s)-pe, u'=p/y, longrun: w'-
dK'=u'e-dK'=0, Jevons: every improvement of the engine accelerates a new consumption
of coal. Rebound Effect: higher efficiency increases service demand up to the possibility
of increasing energy demand. u(s)=√(s), effect is different across services: rebound low at
low demands (Pc, CD, Tv), rebound high at central heating, warm water, air condition,
driving, high=technology improvement
Energy Cons. Programs by activity: first, energy markets do not operate properly,
utilities are ideal to intervene. Market failures: p<c' regulated price is below the marg.
costs of supply (include social costs), d>ρ: consumer discount too much, social optimal
opportunity factor

Least cost planning: Lovins: gigabucks from megawatts. equivalence megawatts are
kilowatts → conservation up to the point where the cost of megawatt = marg. costs.
Can utilities profit from conservation programs?
Assumption: 1. p fix, regulated price, 2. forced to supply. Π=pE(y0+sy,p)-e(E(x.+sy,p))- ρ
Z(sy), Z=cost of program, E=energy demand, p*dE/dy-c'dE/dy- ρZ'=0, (c'-p)=- ρZ'/Ey 2.
term= cost of 1 megawatt.
Remarks: yes, conservation can be profitable but only if p<c', Lovins criterion wrong. the
reason is: no revenue for megawatt but insufficient coverage of kW, c'=20c, p=10c, cost of
MW=15c, conservation=-15, supply=10-20—10.

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Why conservation? forced to supply, the utility can not get rid of unprofitable market
segments. conservation is the only mean to reduce unprofitable supplies. this problem is
further aggregated by private information:
adverse selection (On the most abstract level, it refers to a market process in which bad
results occur due to information asymmetries between buyers and sellers: the "bad"
products or customers are more likely to be selected.),
morale hazard (an increase in the hazards presented by a risk arising from the insurer's
indifference to loss because of the existence of insurance. This differs from a moral hazard
because in this case, there is no conscious or malicious intent to cause a loss...) Utilities
do invest: prefer services with high rebound + little conservation, cost inefficient
programs. Voters → parliament → regulatory commissions → utility management → voter
= consumer; despite this critique billions were and are spent. No conservation effect
attributable to programs.

Green consumers: green electricity, fair prices, catalytic converter, british airways, ban on
tropical timber, nondiscriminatory prices for sustainable agriculture, timer, coffee in the rain
forest (no clearing), certifications, eco labels, offsets (co2).
Green is of a credence good (over or under supplied) but countered by green
organizations, third party labeling, greenwash. Env. protection is at odds with agriculture,
because regions with coffee or cacao cultivation are overlapping with regions of high
Advantages: normally the conservation of a countries' ecological diversity means losses
for developing countries that can be balanced using such methods. Problems: Nearly all
the products from accredited cultivation are exported to the Us+Europe (small
percentage). Potentially adverse effects of eco-labels: eco-product need not reduce
pollution if it removes guilt rebound. greening a product can increase pollution.

Global warming:
greenhouse effect: uv-light comes in, gets reflected, becomes ir-light, is warm, uv can go
out, ir is trapped in the atmosphere. what men are doing is small but the environment is
taking up what it produces. the amount of men is accumulated. target is to make h out of c.
temperature anomalies: but until 20th century moderate ice age.
1. Nordhaus: calculated which costs when temperature is +3° --> gdp in 100 years is –
3%, no proper discounting means that the present generation should always sacrifice its
needs for many still coming, although the future generations are probability richer.
2. different studies found out different temperatures: most say costs of 0 to 25 $
EU emissions trading scheme (ets): firms could use the permit or sell it, permits were
free so companies raised prices. 1. firms thought price will be higher than 40, so
conservation measures (coal to gas), 2. realized that no shortage will be= price is zero,
didn't save energy.
Joint implementation (JI) is an arrangement under the Kyoto Protocol allowing
industrialised countries with a greenhouse gas reduction commitment to invest in emission
reducing projects in another industrialised country as an alternative to emission reductions
in their own countries. But strategic behavior helps both parties.

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