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    Home > Special Topics > Economology > Ecology is long-term economy (1)  

Economology - Ecology is long-term economy (1)

 

We should steer to a sustainable course, because that is not only ecologically wise but also economic. Ecology is long-term economy!

Not all believe in this and therefore we live in a world where companies try to achieve short-term successes without any consideration of the environment.
The CEOs of theses companies might see this as the right way and it is the right way when you only think about the share-holder’s values. However, sooner or later this will turn out to be a false strategy. The CEO doesn’t care about this, because he may have retired by then, but the shareholders may still own the stock. So we should not criticize the CEOs but the shareholders. It is in their responsibility to change business ethics.
The biggest environmental problem today might be global warming (the greenhouse effect).

 

2.1 The greenhouse effect

2.1.1 Explanation

The amount of carbon dioxide (CO2) in the atmosphere is in-creasing and the temperature of the earth's surface is rising rapidly - the average temperature is 0.6°C warmer than 100 years ago. The balance of informed opinion is that these two phenomena are linked, and therefore mankind is having a discernible effect on the climate by emitting CO2 when burning fossil fuels.
The earth is kept naturally warm by the greenhouse effect, in which a number of gases absorb the infra-red radiation reflecting off the earth's surface, and without which the world's average temperature would be -18°C, rather than 15°C. Greenhouse gases include water vapour, carbon dioxide, methane and nitrous oxide. When the concentration of one or more of these increases, the greenhouse effect is enhanced and the earth's temperature is rising (global warming).
Global warming leads to climate changes. According to the Intergovernmental Panel on Climate Change (IPCC), among the likely effects of increased global temperatures there is a greater frequency of extreme weather conditions, such as droughts, heat-waves and floods caused by rising sea levels - a sea level rise of about 0.9 metres is projected for 1990 to 2100.
CO2 is the most significant greenhouse gas emitted by man. Burning fossil fuels is releasing it into the atmosphere, while at the same time deforestation is reducing the amount that is absorbed by trees. The concentration of CO2 in the atmosphere has doubled since the Industrial Revolution.
The link between man-made emissions of greenhouse gases and the increasing atmospheric concentration is firmly established. A correlation between the rising concentration of greenhouse gases in the atmosphere and the global mean temperature over the last century is evident. However, there is no proved cause-and-effect relationship.

This does not mean that there is no link between these two developments. Weather is very difficult to understand. Think only of how often the weather forecast is wrong.

 

2.1.2 Causes

The causes for global warming and especially the increase of CO2 are
 

  • the rapid increase of the world-population in developing countries,
  • the growing need of energy due to the increasing industrialization in the third world,
  • the use of CO2-intensive primary energy.

The following graph depicts the development of energy use and population. As you can see energy use has increased significantly more than the population growth and is still skyrocketing. Not even crises could stop this development, there was only a stagnation. Since about 1950 energy use has shot up. An end of this development does not come in sight and population is still growing rapidly.


(Graph not available in online-edition)

In the developed countries CO2-emissions have remained nearly stable since 1980, but emissions in developing countries have increased considerably.


(Graph not available in online-edition)
 

It is to fear that the developing countries use up more and more fossil energy, which would lead to even higher temperatures.

However, or fortunately, we do not have fossil raw materials forever.


(Graph not available in online-edition)

As egotists we could calm down, because we will be able to drive our cars still about 50 years more, with gas and with fuels even about 60 years. Then the best time of our life is over and we do not need a car any more. The next generation will have to drive with a stagecoach, but this does not have to worry us.
Seriously: We have to rethink our ways of consuming or even spoiling energy.

 

 

2.1.3 A Greenpeace research

A great step toward a better future was the Kyoto Protocol, which is one, note: only one step in the right direction. Many countries signed this commitment, but the largest producer of carbon dioxide emissions did not: the USA. Till 2012 the countries want to cut CO2-emissions by 5 per cent in comparison to the basis year 1990. 52 per cent of the CO2-emissions in the OECD-countries were results of the consumption of mineral oil products.
In my opinion mineral oil companies should follow Kyoto as well. A research on behalf of Greenpeace shows the consequences of such a voluntary commitment analog to the Kyoto-Protocol for the four biggest mineral companies in the world: ExxonMobil, BP, Shell and TotalFinaElf.
According to the latest estimations the oil reserves, which are - at the current price level - economical to convey, reach up 40 to 45 years. Therefore investments in renewable power sources are not only strategically, but also ecologically favourable. In other words, mineral oil companies which invest in renewable power sources have better future prospects and save the planet. The era after the fossil-oil-age will be the age beyond petrol. This is a superb example that ecology is long-term economy.
Those companies which recognize this will be more powerful after the easy to foresee crisis.
Some companies have realized the signs of the time like Shell and BP (which the expression “Beyond Petrol” derives from). They invest in renewable power sources. Others however, above all the largest oil multi, ExxonMobil, are not thus far. The current state of findings would not allow imposing unworkable short-term agreements like the Kyoto Protocol, said ExxonMobil CEO Lee R. Raymond. It should be a question of time when Exxon’s shareholders will recognize that this strategy is false.
According to the Greenpeace study the four multis have to in-vest together around 70 billion Euros in ten years, that means 7 billions a year. That sounds like a lot of money, but this new strategy calls for only between 1 and 2.9 billion Euros in additional expenses in comparison to oil-conveying. These are peanuts for such big companies, which had together a turn-over of 659.3 billion US-dollars in 2001. A little price for such a huge strategic advantage. Direct public supports are not included in this calculation and neither are indirect tax effects. Assuming a tax rate of 40 per cent (referring to the pre-tax profit), the profit is reduced by just 0.7 to 1.7 billion Euros. That means that the state subsidizes the additional expenses with 0.3 to 1.2 billion Euros. It would be better for both the company and mankind if these companies took this step.


 

Further with chapter 2: Ecology is long-term economy (2)

 

The paper can also be ordered as pdf-file for just 5€, just contact me.


 

 
 

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