The Copenhagen climate change conference will convene in December to discuss the future of the planet and all that. At the centre of the table will be those messy issues that economists prefer to avoid — things resembling market failure, ethics and so on.
Moellendorf (2009) has argued, like many others, that the industrialized developed countries — read rich people — need to take the pain. If there’s no agreement at Copenhagen, then the worst effects of climate change will fall on the poorest people. Moellendorf reckons the poor countries will endure the worst effects of climate change.
And there’s the catch — rich people need to take the pain which would otherwise fall on the poor as climate change gets worse. Sounds like an unlikely scenario, unfortunately. The governments of the world may fail to reach a genuine climate change agreement at Copenhagen.
Yet there may still be options if there’s no genuine agreement. If government can’t regulate, maybe shareholders can influence the way our economies responds to climate change? According to Reid and Michael (2009), “shareholder actions and regulatory threats are likely to prime firms to adopt practices consistent with the aims of a broader social movement.” There’s a serious argument hidden behind the managerial clichés. Companies need to develop strategies which fit with either new government regulations or their green-minded shareholders. In other words, if government failure results in no new climate change rules, maybe the market will.
Click MORE for references
Moellendorf, Darrel (2009). ‘Treaty Norms and Climate Change Mitigation.’ Ethics & International Affairs 23(3): 247-65.
Reid, Erin M., and W Toffel Michael (2009). ‘Responding to Public and Private Politics: Corporate Disclosure of Climate Change Strategies.’ Strategic Management Journal 30(11): 1157-78.
