Term
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Definition
| when business strategy incorporates social, economic, and environmental interests into business practices while still maintaining profitability |
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Term
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Definition
| when firms incorporate sustainable business ventures in an effort to increase profit |
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Term
| Profit drivers of sustainability (5) |
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Definition
1 Improve internal efficiencies
2 Manage regulatory risks (preempt, stall, or shape future regulations/ take advantage of government subsidies)
3 Manage growing social risks and opportunities
4 Manage growing social risks and opportunities
5 enhance brand equity and corporate reputation (differentiate from competitors/tap into new customer markets/ employee retention/recruiting converns/attract green/socially minded investors) |
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Term
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Definition
| a firm production imposes costs on a third party without their consent |
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Term
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Definition
1 supply under estimates the true production cost
2 from the view of efficiency, too many units are produced. |
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Term
| Incentive mechanisms to go green |
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Definition
1 government taxation
2 tradable pollution permits
3 assign accountability for waste
4 subsidize green technology
5 green NGO incentives and pressure |
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Term
| External damages and taxation |
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Definition
1 government will tax to decrease supply and increase consumer price
2 set the tax = MEC @ efficient quantity |
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Term
| Tradable Pollution Permits |
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Definition
| government issued pollution permits that pertain to a permissable level of pollution and then government lets the firms trade these permits |
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Term
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Definition
| measured as lost profit from decreasing output to reduce pollutiohn |
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Term
| Pollution permit model assumtions |
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Definition
1 one unit of ouput produces one unit in pollution
2 MAC |
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Term
| What do pollution permits contain |
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Definition
1 specifies the type of pollution, amount of pollution, and time period of use.
2 can be given out to firms for free, or they be initially auctioned, or sold, to the firms in the industry |
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Term
| Nice features of tradable pollution permits (4) |
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Definition
1 the overall level of pollution will be gradually reduced as the number of permits is usually decreased over time
2 more permits go to those firms who value them the most
3 low abatement cost firms can gain profits by selling un used pollution firms
4 environmental groups can buy the permits and effectively reduce pollution more |
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Term
| Criticism of tradable permits |
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Definition
| the initial allocation of permits may go to the most politically connected firms way for gov't to create money for firms |
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Term
| Assigning accountability for a firm's waste can alleviate |
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Definition
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Term
| Secondary markets for waste products... |
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Definition
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Term
| Governments can offer subsidies to firms to... |
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Definition
| encourage more investments in green technology. examples (tax credits, grant money, government-industry partnerships) |
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Term
| Green NGO's strategically target companies to... |
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Definition
| evoke industry wide movements toward green technology. |
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Term
| Two methods of green NGOs |
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Definition
- some partner with industry to collaborate on green tech and certifications
- other green NGOs attack industry to force green technology adoption |
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