External control and LCAs (13-11)

Life Cycle Analysis is a technique that integrates resource use, energy input and waste production from all processes related to the production of goods and services, ‘from the cradle to the grave’ ( (Boersema & Reijnders, 2009). The result of this analysis is a method to assess the environmental impact of products and services.

External control is a system outside society, regulating that society. The most common example of an externally controlling system is the government setting rules. Those rules are setting boundary conditions for the self-organisation of the specific goal the government had in mind when creating and implementing that rule.

The goal of this blog is to come up with four ways for a government to increase use of LCAs by setting boundary conditions and external control, according to the framework of Sabatier (1980), presented below.

Figure 1: Sabatiers Framework (Sabatier, P., & Mazmanian, D.  1980)

Sabatier’s framework presents the stages of the implementation process of a policy and 3 main variables influencing that process: the tractability of the problem, the ability of statute to structure implementation and the non-statuary variables affecting implementation.

I feel that external control is enforcing a ‘top down’ increase of use, while I feel that providing boundary conditions is creating a ‘bottom up’ development. Therefore I have come up with two examples for external control and two examples of setting boundary conditions, because my hypothesis is that this difference in development might give different results. My explanation for this possible outcome is that enforcing rules might rule out potential innovators (sidenote: I am aware that this hypothesis is influenced by my own liberal view, therefore I feel it is even more interesting to investigate it).

Shortly, the four ways the government can increase the use of LCAs through external control and setting boundary conditions are:

-          making LCA theory part of the course materials in high schools (external control)

-          the requirement of using an LCA when implementing a governmental policy (external control)

-          providing subsidy to companies that make use of LCAs in their operations (setting boundary conditions)

-          investing in research that is aiming to improve the LCA method (setting boundary conditions)

Based to the Sabatier framework, for both measures that make use of external control analysed by the traceability variable, some problems might occur regarding the extend of behaviour change and the percentage of the target group regarding the population. Policy makers in implementing agencies have to extend their procedures if they have not been using LCAs and teachers have to learn about the theory, if they have not done so far, to be able to teach it to students. Assuming that around 1 million people work for the Dutch government (Rijksoverheid, 2013), the target group is around 6% of the entire population. Depending whether one considers this a large part or not, it might give difficulties in implementing or not. The theory and technology about LCAs is available so that might facilitate the use of those measures.

Compared to the two measures that set boundary conditions, it might be more difficult to access the available theory and technology. The target group and the behavioural change required for those measures are larger compared to the external controlling regulations, because not only policy makers are involved and changing behaviour, but the private sector too. But the behavioural change is voluntarily and therefore the behavioural change might be less.

                Therefore the effectiveness of external control, regarding the traceability variable, is larger compared to the other option of setting boundary conditions.

When analysing the two kinds of measures, external control and setting boundary conditions, based on the statutory variable, the unambiguousness of policy directives might be less effective in the case of boundary conditions due to the sensitivity of lobbying. Also the financial resources required might be larger for the boundary conditions, because of new subsidies and investments. The decision rules for implementing agencies have less money at stake in the external control measures, I believe.

But the formal access by outsiders is easier for the boundaries measure, because of the communication that is facilitated in this case. The incorporation of adequate causal theory might be more efficient for the boundary measures, due to the incentive of financial support.

Therefore the effectiveness of external control, regarding the statutory variable might be larger compared to the setting boundaries measures.

The effectiveness of the non-statutory variable is in favour of the setting boundaries measures, during the stages of implementation.

The media attention might be larger for the external control because more people will learn about LCAs.

The attitudes and resources of the groups might be better in the setting boundaries measures, because of the free choice. The same holds for the socio-economic conditions and technology, because of the incentive to receive support. Because of the free choice, the public support might also be larger.

                Overall, the potential effectiveness of external control is larger than I had expected in the first place. This is based on the analysis of the measures using the framework of Sabatier.

References

Boersema, J. & Reijnders, L., 2009. Principles of Environmental Science. Amsterdam: Springer Science; Business Media B.V.

Rijksoverheid, 2013. www.rijksoverheid.nl. [Online]
Available at: http://www.rijksoverheid.nl/nieuws/2013/06/05/cijfers-overheid-steeds-kleiner.html
[Geopend 12 11 2014].

Harvest game

In the previous class, a game called “the Harvest Game” was played. In this game, the class was divided into 6 groups of students. Every group represented a boat on a fictive ocean, containing 50 fish. Each boat was fishing in this ocean, trying to maximize its profits. The element of time in this game was represented by a ‘round’ where every team had to determine how much they were going to fish, not knowing about the yields of other groups. Every round the remaining fish in the ocean could miraculously reproduce themselves on their own, restoring the number of fish in the ocean up to 50 maximum. Each round, the number of fish caught are randomly assigned to the boats, making it possible for a boat to have caught less than demanded or even have empty fishing nets, if the stock of fish is respectively approaching or reaching 0.

Interesting was to see how the boats would fish in absence of information on how the other boats were fishing and the stock of the fish in the ocean.

This is a good example of Game Theory on the Tragedy of the Commons, two important concepts in Economic Science (which is part of my BSc degree). The behaviour of actors is analysed according to some assumptions: the actor choses to behave a certain way that is, to them, at least equal beneficial compared to the alternatives (Varian, 1987). When property rights of a good are not clearly defined, shared among a large number of actors or no harvest information is shared between actors, the emerging behavioural trend is not in favour of a sustainable use in time of the common good (is  I define a non-sustainable use of a common good as a yield that results in complete exploitation of the good, so nothing is left after some time)  (Varian, 1987). In cases like this, users tend to maximize profits on the short term, leaving nothing of the good for exploitation on the long term. This because the uncertainty of the behaviour of other actors, that information is not shared among users, and no strong incentive to prevent cheating (like a fine above the profit of cheating), it is tempting to ‘cheat’ one round and fish more than the sustainable yield would allow, in this case 25/6 = 4.17 fish each round. This would result in a higher profit for the boat in the ‘cheating round’ and a lower stock of fish in the coming rounds.

The result of the game in class was a non-sustainable yield, because after the 5^th round, the ocean was completely empty.

Having this said, it is interesting to analyse how to prevent the boats from ‘cheating’, meaning an incentive for the boats not to exceed the sustainable yield of 4.17 fish each round.

One measure can be the openness of information about the catch of each boat every round. This will take away some of the uncertainty of the actors in this socio-economic system, because knowing other users are complying to the moral of not increasing a yield of 4.17 fish will pressure actors to behave the same.

But cheating can still be rewarding if the profits gained from cheating are higher on the short term than the punishment of cheating. So another measure has to prevent this from happening. The largest yield possible is 50 fish if the boat is requesting 50 fish and all the remaining fish, with a maximum of 50, “are assigned by the ocean” to that particular boat. To overcome this incentive, a financial punishment higher than the profit of 50 fish should be implemented. This has to be done by an overarching organisation that has the power to assign a fine to a boat, that has to be paid. In this case, the teams should create such a governmental body.

To conclude, common goods are sensitive to be exploited to a stock of 0 by individual actors. Two measures have been presented: one is to make information available about the behaviour of other actors and the remaining stock, leaving users subjective to the moral pressure not to increase their catch about the sustainable yield. The other measure is to create an overarching body that has the power to fine cheating actors.

References

Varian, H., 1987. Intermediate Microeconomics, a modern approach. New York & London: W. W. Norton & Company.

NOKIA video

This week's blog is about the documentary on Nokia and its supplying factory in China. The main setting in the movie is two of Nokia's representatives checking the conditions workers have to live and work in.

Legitimacy is defined as the activities of a firm striving to be considered as ‘desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions’ (Suchman 1995).

Nokia is being legitimate by sending investigators to check the conditions the workers have to live and work in and by allowing the film crew to record the interviews, arousing the impression to be a transparent company.
Actively striving to be concerned about the wellbeing of workers and transparency are very important norms and values within the western society, improving the brand's image to a proper, desirable kind.

The supplying factory is striving for legitimacy, recognised by Nokia's representatives, by answering their questions as extensive as possible, showing them around and comparing themselfs to competing factories. This way the factory is giving the impression of being appropriate,  using important values and norms for Nokia and its customers.
 

The statement that Nokia is diffusing the sustainability criteria in an effective way, is giving me mixed feelings. In one way, watching the documentary gives me a very unsustainable idea about how Nokia products are produced. The way women are treated during pregnancies for example, or the rooms where the workers have to sleep in, need a lot of improvement to measure up to my idea an sustainable working environment. In that case, if Nokia is really willing to produce in a sustainable way, the main idea a viewer would have after watching the documentary would be very different because Nokia would not have chosen this supplier.

In the other way, the supplier is not meeting my ideas of sustainability and therefore so isn’t Nokia. But the fact that Nokia is hiring people to actually check what is going on in the factories of suppliers, trying to comply to international standards on working environments. Because consumers demand for the cheapest products, it can be a dilemma for a company to be competitive on one hand and have a sustainable organization and management on the other.

                A coordination mechanism better than the current controls would be, according to me, a system where the supplying factory would be rewarded for certain sustainable policy on the workers or the production. In this way, the supplying factory would not try to decrease its costs at the expense of the workers but maybe even increase its costs a little, when improving the worker’s facilities, to gain a certain bonus from Nokia.

                Of course, this system is not in favor of Nokia, that would only consider to implement this if it could somehow increase their profits. One way possible is creating goodwill from customers that will prefer higher prices from a sustainable company like Nokia, compared to lower prices from less sustainable competitors. 

Week 3 - Q2

The second subject for this week is about whether or not the proposition of Friedman ("the business of business is to increase its profits") might be put to constructive use in the sustainable management of the coral in Nha Trang, Vietnam.

    For solving the case of the tragedy of the commons, the proposition of Friedman, the business of business is to increase its profits, is not supportive I believe. Because when businesses exploiting resources without clearly defined property rights, and businesses trying to achieve profit maximization resulting from the increase of production and capacity combined with spread out fixed costs, the possibility for overexploitation increases.

    In the case of Nha Trang Beach, if too many tourists visit the area of the coral, it may result in the earlier mentioned deterioration of the reef. Resulting in a situation that is not Social Responsible because the profit gained is not sustainable business.

Week 3 - Q1

The subject for this week was to chose a Socio-Ecological System (SES) where in I have (had) an active part. The goal is to analyse this SES according to the framework that Elinor Ostrom has constructed in her paper 'A general framework for analyzing sustainability of Socio-Ecological Systems' (2009). The framework is presented in the figure below.

The Socio-Ecological System that I have chosen are coral coasts near the city of Nha Trang, Vietnam, that I have visited during a snorkeling trip last summer.  

The resource units in this example are the corals growing in this area. 

The resource system contains the warm salt water pools and rocks on which the corals are growing.

The users are the fish that live and eat in the corals, as well as tourists like me that make snorkeling trips around the area. Private organizations that take tourists on their boats to the area and supply them with snorkels are users as well. The small travel agencies in the city center that make bookings on the boats for tourists. The norm that visiting a coral is ‘cool’ can also be seen as a user.

The governance system contains rules that tourists are not allowed to touch the corals but a strong sanctioning system is lacking. No property rights have been established, as far as I know. The taxation system is part of the governance system too. The Lonely Planet can be considered to be an actor too, because the coral is promoted in the book, expanding the network of visitors to the area.

All those subsystems and variables/actors in this system interact with one another. Resulting in high numbers of visits to the coral every day, partly due to the sharing of information between travelers in Vietnam recommending each other to visit the coral. But also an increasing number of corporations that invest in boats to host tourists because of the relatively large profits that can be made.

Lobbying activities take place too, because all the locals try to create an enjoying experience for visitors, trying to obtain more awareness for the area, attracting more visitors.

A conflict occurs when tourists that cannot communicate in a language the guides speak (English, Frensh, Vietnamese) do not understand the explanation of the rules for visiting by the guides.

The outcomes of those interactions is mainly a conflict between the resource unit coral and the users, tourists, in a way that more and more visitors snorkel in the area and not all respect those rules once in the water. This results in deterioration of the reef.  
The ecological unsustainable situation may result in a decrease of private companies in the area transporting tourists, because after some time not much will be there to see for tourists. This will have a negative effect on the social performance measures.

Externalities to other SESs can be that captains or crew on the boats become unemployed if this complete system is not changing. Unemployment may increase the safety of the country by rising criminal rates, therefore reducing the attractiveness of the country, resulting in even less visitors to other beautiful nature parks.

The detoriation of the coral decreases the biodiversity of the ecosystem, possibly influencing climate change or the threshold of the area to maintain under those conditions. 

References

Ostrom, E., 2009. A General Framework for Analysing Sustainability of Socio-Ecological Systems. Science, Issue 325, pp. 419-422.

Friedman-proposition

     I concluded my blog about the Friedman proposition by agreeing with the statement “the business of business is to increase its profits”. But amusingly, I did not agree when I started writing my own thoughts about it.

     I began with arguing that businesses have the freedom to produce whatever they want and how they want. But during my own reasoning, I realised that if a sustainable business is not able to sell its products or services, it will not be able to maintain. So therefore I changed the point that I planned on to make when I was writing my thoughts about the business of business, from not agreeing to agreeing on it.

     But I do not agree on the way he builds his arguments for the statement. I have built my own argument on the believe that consumers can change the supply, which is something that I learned in my bachelors Earth Science and Economics. So I am not sure what literature helped me to develop that opinion in what way.

     The actual reasoning I made was not collected from any material, I tried to build up an argument on why I did not agree, but in the end only our reasonings were very different but I agreed on the Friedman proposition.

Rational decisionmaking

The news item I have chosen to discuss is the decision of the president of the US to bomb Islamic State (IS). The main actor representing the US is Barack Obama, the president.

The first step in the Rational Actor Model (RAM) is that the actor has an optimal believe about the world. In the beginning, Obama had a believe that IS had to be eradicated because the organization is dangerous for, especially American, citizens.

                The second step in the RAM is that the actor’s belief is supported by evidence. In the case of Barack Obama, the evidence supporting his belief are the video’s posted by IS where American hostages have been decapitated and threats have been addressed to the whole nation and its citizens.

The third and last step in the RAM model is that the evidence must result from optimal investment in information gathering. National and foreign informative agencies have checked the video’s and its content, containing the threats to the US, for authenticity. When those agencies concluded the videos were real and the threats for terroristic attacks in the nation were real, Obama decided his army should start the bombing of IS.