Who Is

Responsible for

the C-N-T

Equation?Shyam Sunder, Yale School of ManagementConference on Managing Responsibly with ConfidenceGreat Lakes Institute of ManagementChennai, Dec. 20, 2009

An Overview

C-N-T equation is the mathematical relationship among how much resources each person consumes (C), how many persons consume (N), and the length of time for which they can continue to do so (T) before running out

If all consumed resources were infinite in supply, or completely renewed or substituted indefinitely, T would be infinite, and we would have sustainability

Anything short of that is unsustainable

Should sustainability be our goal? For how many generations? For how large a part of the world?

If so, how do we get to sustainability? Balance CNT eq.

What are the lessons of Copenhagen?

What is responsible management? At what level?

Two Fundamental Human Values

Two fundamental values appear to have been shared by most if not all societies through history: consumption and reproduction

These two are built into our moral codes: we seek and look up to higher consumption (standard of living)

We seek to perpetuate ourselves, and prolong life, supported by both biology as well society and religion

This values worked well over the millions of years of human evolution where they helped hominids survive hostile environment

In the recent centuries, technologies have changed that

We need to look at the aggregate level consequences of values defined for individual behavior

                                                                                                                                                                                                                                                                              

[Add to My Atlas]

                                                                                                                                                                                                                                                                                                         

                                           

[Add to My Atlas]

[next]

                                                                                                                                                                                                                                                                                                         

                                                         

[Add to My Atlas]

[next]

Figure 5: Death Rates per 1000 over Time

Figure 6: The Demographic Transition

Figure 1: Human Population Growth over Time

Figure 7: Projected World Population Growth

The concept of Water Stress

                                                                                                                                                                                         

    

Source: WaterGAP 2.0 - December 1999

Back to the C-N-T Equation

Let us settle for (an optimistic) estimate that if we do nothing new, the world population will stabilize at about 8 billion

Let us also assume that this population will not increase its per capital consumption beyond current levels (unlikely given China and India’s current levels and growth)

How many years (generations) to go before we run out of resources? What is T?

But there are objections.

Objections

New technologies will save us May be, but how confident are we that enough new technologies

will come along in good time? What are we doing to make that happen? For how long will these technologies extend T?

Nuclear energy did come along in mid-20th century, held promise of unlimited cheap energy, but only for a while. What do you think about it today?

We shall discover more resources We almost surely will. How much, when, and how much will they

extend T?

As resources grow scarcer, prices rise, increase incentives to develop and discover more True (Economics 101), but remember higher prices is a pre-

requisite; will it force reduction in consumption, population, create conflict?

So, How Much Time Do We Have?

Let us think about T, the time we have to increase, or even maintain, our C and N

Count in generations

What is our responsibility?

Think, devise ways of dealing with it, and implement and manage them

If we don’t, who will?

Some Things to Think About

Should sustainability be our goal?

For how many generations?

For how large a part of the world?

For how many people?

At what level of consumption per capita? Don’t forget those 16 billion plastic water bottles

discarded into trash each year

How do we get to sustainability?

Does it requires balancing the C-N-T equation

Who will do the balancing?

Isn’t Copenhagen Conference Going to Take Care of That?

What are the lessons of Copenhagen? Politicians cannot lead the way on this They will follow the values of their

populations We hold dear the values of consumption

and reproduction (increasing C and N) No politician or even dictators have the

power to go beyond that? Does it require a change in our moral

code? Who will lead the way?

Responsible Management

What is responsible management?

At what level do we think about responsibility? Individual, family, company, country, or global level

What does responsible management cover? Employment, products, profits, environment,

governance, society, future of human race?

How much of your talents are going to devote at each of these levels of management?

That is the ultimate determinant of T. Its in your hands.

What Do You Think?I would like to know your thoughts.

Thank You!www.som.yale.edu/faculty/sunder