Economics 421 – Fall 2010 Strategic Environmental Management

Don Goldstein: Quigley 225 / 3340 / dgoldste Office hours: Tu, Th 3-5; Wed 4-6

Overview: In this course, we will explore a rapidly growing field of management studies: Strategic Environmental Management (SEM). SEM is the art and theory of turning environmental impact- reduction into a competitive advantage. The widespread attention to SEM reflects decades of environmental deterioration, in which pollution and resource depletion by business played (and continue to play) important parts. It was long assumed that economy and environment represent a tradeoff: what's good for one is bad for the other. In contrast, SEM is based on the idea that with changed managerial perspectives and practices, companies can contribute toward an economic development path that is environmentally sound and economically profitable – “sustainable development.” We will study the theory underlying this idea, along with real world applications, especially relating to climate change.

The semester will be divided as follows:  Basic perspectives on the environment, its relation to economic activity in the firm, and government regulation: concepts for understanding the environmental impacts of production and consumption, the possibility that lessening these impacts create corporate profit opportunities, a theory of the firm in which such opportunities make sense, and the policy context in which these relationships unfold.  Dimensions of SEM: models of how environmental impact-reducing process and product changes can become a part of a company’s core business strategy, and consideration of how broad systemic factors (market, cultural, and other institutions) can impede or facilitate these changes.  Climate change and SEM in Northwest PA: understanding the threats and opportunities that climate change creates for business managers in our area and the Great Lakes region more broadly. The section will be organized around a case study, team-based final assignment.

Expectations and grading: Students are expected to attend class and any other assigned activities, do the readings beforehand, contribute to discussion, and participate fully and collaboratively in team assignments. Assuming these expectations are met, the course grade will be an equally weighted average of three assignments (see schedule, next page).

Required reading sources: 1. Articles in E-Resources, course Sakai site. 2. Environmental Management, 2nd Ed., 2008, by Michael Russo. Los Angeles: Sage Publications. (Reader in schedule on next page) 3. Online articles (linked and underlined in schedule on next page) Week Topic Reading Basic perspectives 1ST day: Moyers, “Earth on Edge” – video Aug. 31 The environment Daily and Ellison, “Prologue: The wealth of nature” (E-Resources) Hawken et al., “The Next Industrial Revolution” (Reader 13)

Sep. 7 The firm Hart, “A Natural-Resource-Based View of the Firm” (E-Resources) Lawrence et al., “The Corporation and its Stakeholders” (E-Resources)

Sep. 14 Regulation Portney, “EPA and the Evolution of Federal Regulation” (Reader 6) Porter and van der Linde, “Toward a new conception of the environment- competitiveness relationship” (E-Resources)

Sep. 21 Climate change Intergovernmental Panel on Climate Change, “Climate Change 2007: Synthesis Report” (E-Resources) Lohr, “The Cost of an Overheated Planet,” New York Times 12/12/06

ASSIGNMENT ONE

Sep. 28 Dimensions of SEM Hart, “Beyond Greening: Strategies for a Sustainable World” (Reader 1) Process: Tools US EPA, "An Intro. To Environmental Accounting…" (Reader 23)

Oct. 5 Svoboda, “Note on Life Cycle Analysis” (Reader 24) WRI: Greenhouse Gas Protocol Initiative

Oct. 12 Fall Break Schaltegger et al., “Environ. Mgt. Systems & Eco-Control” (Reader 27)

Oct. 19 Products: Demand Reinhardt, “Environmental Product Differentiation...” (Reader 14) NMI, “Excerpts from the 2006…LOHAS Market Report” (Reader 18)

Oct. 26 Specter, “Big Foot.” The New Yorker, February 25, 2008. System: constraints Fox et al., "A Primer on the Global Reporting Initiative," (Reader 16) and opportunities Nov. 2 Rondinelli & London, "How Corporations & Environmental Groups Collaborate" (Reader 20) Farrell & Remes, “How the world should invest in energy efficiency.” McKinsey Quarterly, July 2008. (E-Resources)

ASSIGNMENT TWO

Nov. 9 NW-PA, climate Lash & Wellington, “Competitive Advantage on a Warming Planet” change, and SEM (E-Resources) Lovins, “The Business Case for Climate Protection” (Reader 2) Suozzo (Citigroup, with WRI): “Investing in Solutions to Climate Change” (E-Resources) Nov. 16 - Nov. 30 WORK ON ASSIGNMENT THREE

Dec. 7 ASSIGNMENT THREE: Team presentations