RESOURCE ISSUES

BA 447

Day 11 & 12

RESOURCE ISSUES: Note to Students

Scan links provided. Consider the lecture for next two sessions along with links as a survey to get you

started.

Exercise: Step 1

• Is there a relationship between changes in the price of crude oil and deaths in a large city like San Francisco?

Selected Topics

• Global warming• Sustainable energy use• Ecological issues

– Conserving natural resources– Protection of plant and animal life

• Role of NGOs (sometimes referred to as activists)

• Impact on global business

Global Warming

• Increase in earth’s temperature• Greenhouse effect - increase in carbon

dioxide and other emissions and effect on atmosphere

• Most of the warming seems to have occurred in last 50 years, therefore due to human activity

• Carbon stabilization_wedges.pdf

Global Warming - sources

• International Panel for Climate Change

• EPA - info on climate change

• http://en.wikipedia.org/wiki/Global_warming

• http://www.realclimate.org/index.php?p=121

Efforts to Reduce Emissions

• Alternatives to reducing emissions– Government mandates– Free market

• Existing systems– US: Clean Air Act places a cap on emissions– EU Greenhouse Gas Emission Trading

Schemes– UN Framework Convention on Climate Change

Kyoto Protocol

• Kyoto Protocol• Agreement to reduce emissions 5% below 1990

levels by 2008-2012. • If they can not do so, country can buy Green

House Gas (GHG) emission reductions.– Certified Emissions Reductions

• Exemptions – developing countries, including China

• US objections

Emissions Trading

• World Bank facility:– http://carbonfinance.org/

• European Bank for Reconstruction and Development– http://www.ebrd.com/country/sector/energyef/c

arbon/

A note on sites on global warming

• Most sites are supportive, a few raise doubts– http://www.lickglobalwarming.org/

– http://www.globalwarming.org/about.htm

– http://www.globalclimate.org/

• Pay attention to who is behind the site– A good number of sites raising doubts are industry

funded, primarily “fossil fuel sources”

– Key issue is fear of regulation

– Politics tend to cloud the issue also

Sustainable Energy Use

• Nominal prices of crude oil over time– http://www.eia.doe.gov/cabs/chron.html

• Real price comparison– http://www.forbes.com/static_html/oil/2004/oil.shtml

• US Gas prices (components and history)– http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis

_publications/primer_on_gasoline_prices/html/petbro.html

– http://www.randomuseless.info/gasprice/gasprice.html

Some myths about energy

• Are gas prices really that expensive?

• Some myths about energy– http://dieoff.com/page132.htm

About Oil Prices

• BBC- Oil Markets Explained

Long term prospects

• Hubbert's peak

• Example of debate/discussion– BBC article on long term oil prospects

Addressing alternative sources

• Amount of crude oil currently consumed• Infrastructure dependent on crude oil• Capacity to produce key raw material• Net change in conversion to alternative

– Amount of crude oil consumed in production of alternative, e.g. as energy, as raw material

– Amount of energy gained– Compare apples to apples?

Addressing alternative sources

• Net change in conversion to alternative– Amount of crude oil consumed in production of

alternative, e.g. as energy, as raw material

– Amount of energy gained

– Compare apples to apples?

• OSU study on Biofuels• National Geographic - biofuels compared• Comment on biofuels and land use - NYTimes

Ecological Issues - examples

• Forest cover • Spotted owl• Dolphins• Sea Turtles• Chilean sea bass

Resource Issues

• Natural resources such as trees and minerals

• Water– For consumption: human and production– For transport

• Food production

Discussion

• Environmental concerns/issues, additional information, etc. based on articles?

• Name an opportunity and/or threat to a global company given the discussions on global warming, energy, etc.?

Genetically Modified Crops and the Environment

• Examples:– Seeds genetically modified to be pesticide resistant

– Seeds modified to produce organisms that kill other organisms

• Issues:– How to increase food production?

– What are impacts on environment?

– Is it a shortage issue or a distribution issue?

Understanding Dissent

• Appreciate that issues are complex

• Different sides will use information technology to disseminate their message

• Look into science if possible

• Ask questions, investigate

• Check background of sources of information

Role of Activists

• In general call attention to an environmental issue.• Use political strategy to call attention. For

example, against genetically modified seeds - – In Brazil, filed or caused law suit to be filed to ban the

introduction of modified seeds– In Europe, lobbied parliament– In other countries, lobby congress or executive branch– Target key players as a way of attacking industry– Good use of the press – public relations– Need “good publicity” to survive

Other Examples of Political Strategy

• Anti-Global Warming Campaign/– Intention was to illustrate how an industry lobby group

conducted an effective “political strategy”

– Note complex political process into which a political strategy can become an important tool

• Campaign to raise awareness on unfair labor practices: NIKE

• Campaign against Measure 50• Procurement and Tax Reform Legislation

Components of Political Strategy

• Objectives: pre-empt, create or attack legislation or regulation• Proponents range from interest groups to NGOs, etc.

– Can draw from a coalition of supportive individuals and organizations• Craft clear set of messages to be disseminated

– Spin has to be effective, e.g. doubt on science of climate change• Attract attention to the message

– Sometimes targets entities large or popular enough to attract press– Use or create events – Drama

• Advertising• Effective use of the press

– Talking heads, e.g. think tanks, prominent individuals– Press releases

Components of Political Strategy: More direct methods

• Demonstrations, rallies, etc.

• Door to door in the executive and legislative branches

• Use the court system

Conclusions – implications on global businesses

• Reality of world-wide movements– Climate change is supported by both public and private

entities globally– Response to genetically modified seeds– Other environment-related movements

• These have spawned “targetting”/legislation• Direct and indirect costs to global firms including

legal costs, energy costs, etc.• Indirect costs in terms of negative publicity, etc.