23/11/15
Lesson 3: Sustainability
Learning Objective: I can explain and illustrate the threat to sustainability posed by the use of fossil fuels in developed countries and over-exploitation of agricultural land in developing countries.
DA: Listen to the Marketplace podcast and identify what type of market failure exists.
DA: Listen to the Marketplace podcast and identify what type of market failure exists.
Common access resources: Natural resources over which no private ownership has been established.
The tragedy of the commons: Private individuals will exploit common resources unsustainability out of self-interest, ultimately leading to the depletion of the resource. Benefits to the individual outweigh the external cost and give the individual the incentive to keep using the resource. So, market failure will take place because over-consumption.
Threats to sustainability:
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Government responses to threats to sustainability:
Cap and trade systems- |
Clean technologies-Because of the negative externalities, much attention is paid to the use of renewable sources of energy as a solution.
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Activity: Market forces exert a positive force on firms to be committed to sustainable business practices. Create a short PP presentation including the following:
- Identify two firms which include a commitment to sustainability as part of their corporate social responsibility code. 2pts
- Summarize the firms' sustainability mission. 6pts
- Evaluate to what extent does the firm create a positive externality for society (third parties). 8pts