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Management article
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Reference no. R1204B
Published by: Harvard Business Publishing
Published in: "Harvard Business Review", 2012

Abstract

Business is the engine of the developed economies that devour a disproportionate share of the world's nonrenewable resources and produce a disproportionate share of its emissions. We see it, therefore, as both a cause of and a solution to environmental degradation. But how, exactly, can business contribute? To answer this question, the authors explore two schools of thought. According to one, consumers and companies should do more with the resources they consume, become savvier about recycling and processing their waste, and dampen their appetite for consumption in general. This worldview achieved perhaps its clearest expression in the works of the 19th-century economist Thomas Malthus. Although the Malthusian view exercises a powerful influence, it is by no means uncontested. An alternative philosophy, which flows from the work of the 20th-century economist and Nobel Prize winner Robert Solow, appeals to our natural optimism by arguing that environmental and other problems can always be resolved through the exercise of human ingenuity. It's not hard to see that these two philosophies make uneasy bedfellows. The Malthusian view encourages a tendency toward regulation and restraint, while the Solovian view underlies much of the advocacy for deregulation and the promotion of growth. But if we are to make real progress in solving the world's environmental problems, the authors write, we will have to apply both philosophies.

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Abstract

Business is the engine of the developed economies that devour a disproportionate share of the world's nonrenewable resources and produce a disproportionate share of its emissions. We see it, therefore, as both a cause of and a solution to environmental degradation. But how, exactly, can business contribute? To answer this question, the authors explore two schools of thought. According to one, consumers and companies should do more with the resources they consume, become savvier about recycling and processing their waste, and dampen their appetite for consumption in general. This worldview achieved perhaps its clearest expression in the works of the 19th-century economist Thomas Malthus. Although the Malthusian view exercises a powerful influence, it is by no means uncontested. An alternative philosophy, which flows from the work of the 20th-century economist and Nobel Prize winner Robert Solow, appeals to our natural optimism by arguing that environmental and other problems can always be resolved through the exercise of human ingenuity. It's not hard to see that these two philosophies make uneasy bedfellows. The Malthusian view encourages a tendency toward regulation and restraint, while the Solovian view underlies much of the advocacy for deregulation and the promotion of growth. But if we are to make real progress in solving the world's environmental problems, the authors write, we will have to apply both philosophies.

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