From an economics and business perspective, global warming, climate change, and other sustainability concerns raise questions about the way our systems function. On the microeconomic level, many individual commercial and financial transactions affect—and are affected by—global phenomena, including global warming and climate change. On a global scale, decisions and actions by large corporations and nations have profound impacts on global warming and climate change. Some industries have direct impacts on GHG emissions, such as those involved in fossil fuel extraction, processing, and distribution, industrial agriculture, or vehicle manufacturing. Renewable energy providers, holistic organic agriculture, and developers of mass transit systems have significant impacts on reducing GHG emissions.
The following are a few example questions that might help initiate or deepen student discussion and exploration –
- How does global warming impact the economy and business?
- What are the economic impacts of changing temperatures and increased flooding and drought?
- What are the economic impacts of extreme weather events such as storms, drought, flooding, heatwaves, wildfires, etc.?
- How do the production and distribution of goods and services influence global warming?
- Since continual growth on a finite planet seems by definition to be unsustainable, what other ways can you and students develop to explore the idea of steady-state economies and qualitative growth and its compatibility with systems thinking?
- How do market forces, regulatory agencies, taxes, and tax credits help mitigate climate and emissions problems?
Investment – Related Questions
- How long does it take to recover/recoup an investment in energy-saving measures or devices?
- If you replace an incandescent light bulb with an LED light bulb, how long will it take for the savings in electricity to repay the cost of the new light bulb? (Assume the LED bulb costs $5, that it uses 85% less electricity, and that the price of electricity is $0.15/kWh.)
- Suppose it costs $500 to rewire the lights to make it easier to switch off them off. What do we need to know to calculate how long will it take to recover this cost through reduced electric bills?
- What is the relationship between ‘return on investment’ and ‘payback period’?
Subsidy and Tax – Related Questions
- How do subsidies and accounting practices affect global warming?
- What are the impacts of subsidies and incentives? Can you and students develop some testable hypotheses on these subjects? How would these actions affect corporate decision-making and consumer demand?
- Moving subsidies from fossil fuels to renewable energy?
- Establishing a carbon tax?
- Moving subsidies from industrialized farming to sustainable methods? (For example, organic growing sequesters carbon into the soil, reducing net GHG emissions)
Externality – Related Questions
- How do externalities encourage companies to ignore global warming and to increase greenhouse gas emissions?
- How do subsidies for oil and other fossil-fuel industries tend to increase fossil fuel use?
- Do subsidies encourage large-scale farming and chemical- and machine-intensive farming at the expense of small farms?
- To what extent is it desirable to explore possible unforeseen effects/unintended consequences that a proposed or planned project or action may produce?
- To what extent should the Precautionary Principle be applied?
- What is our responsibility if the possibility of harmful consequences is discovered after an action or product is introduced?
- “Our” could be defined as either the company who committed the action, the government that allowed the action to be committed, or the general public.
- Economic decisions affect global warming and climate change; these, in turn, affect individual businesses and the economy as a whole.
- Decisions by governments and multinational corporations affect global warming and climate change; these, in turn, affect individual businesses and the economy as a whole.
- Alternative approaches, such as involving the public and community, can help shift the primary goals of business to sustainability, instead of just profitability.
Additional Resources for Economics & Business
- Center for the Study of the Steady-State Economy
- Climate Accountability Scorecard Union of Concerned Scientists, 2016. Climate deception, disclosure, and action by major fossil-fuel companies.
- Climate Change and the Global Green New Deal by Noam Chomsky, Robert Pollin
- Economics, Steady State [PDF] by Mark. W. Anderson, University of Maine. Berkshire Publishing Group, 2012.
- Economics of Climate Change ClimateCost website.
- Global Warming’s Terrifying New Math by Bill McKibben. Rolling Stone, 2012.
- Going Local: Creating Self-Reliant Communities in a Global Age by Michael Shuman. Routledge, 2000.
- The Precautionary Principle
- Precautionary Principle, the Wingspread Statement Science and Environmental Health Network, 1998.
- Renewable Infrastructure Investment Handbook: A Guide for Institutional Investors World Economic Forum, 2016.