Archive for the ‘pollution’ Category

Is Fare by Weight Fair?

Is it fair to charge airline passengers based in part on weight? That’s the plan recently announced by Samoa Air, and it’s a plan that is raising a few eyebrows.

Yes, it’s an ethical issue. But no, there’s no clear answer.

Interestingly, the mainstream media stories I’ve read about this thus far have made little mention of the obvious moral worry, namely discrimination. On the face of it, this looks like systemic discrimination against overweight and obese flyers. You and I could be in adjacent seats, booked seconds apart, but if you happen to be 20 pounds chubbier than me, you’ll pay more.

Whether being fat is sufficiently under personal control to make it a permissible basis for discrimination is hotly debated. But it’s worth noting that a weight-based policy also discriminates against those whose extra pounds are pure muscle. A heavyweight boxing champ would be about fifty pounds heavier than me, and would therefore pay more. The same goes for someone with the same build as me, who happens to be 4 inches taller. So if this is discrimination, it’s discrimination against those who are heavy, not those who are fat.

The other factor not mentioned in the few stories I’ve read about this is the environment. In aviation terms, weight translates into fuel, and more fuel burned means more environmental impact. So in charging by weight, an airline is basically levying a kind of carbon tax. And while how much you weigh isn’t fully within your control, the amount of luggage you bring with you is, and Samoa Air charges based on the total weight of you plus your luggage. Charging more on that total encourages people to carry less, and in principle might nudge frequent flyers, at least, to lose a few pounds. Such reductions eventually mean reductions in carbon emissions, and that’s a good thing. So even if there is a problematic form of discrimination going on here, there’s at least one factor on the other side of the moral equation.

Finally, it’s worth noting that to the extent that we’re worried about discrimination against bigger people (regardless of why they are big), being charged extra for their weight is far from the only price bigger people pay. Sufficiently large people also “pay,” for example, in the form of pain suffered by squeezing into airline seats not designed for people their size. That’s one of innumerable ways in which people who are outside the norm suffer in a world of products and services that are mass produced. But then, if the unusually large person pays a price for being squeezed into a seat designed for smaller folk, the person next to them pays a part of that price, too.

Of course, Samoa Air is a tiny airline, based in a tiny country. And commentators suggest that the company’s example is unlikely to be copied by major airlines. Indeed, it’s probably next to impossible: Samoa Air not only charges more to heavier passengers, it gives them more space — something likely impossible on standardly-configured passenger jets. But it is precisely for this reason that Samoa Air makes for a good case to use in ethics training and education. Before coming down on one side or the other, it’s important to tease out not just that there’s an ethical issue at all, but that there are in fact a range of ethical questions here.

Ethics Lessons from Toronto Mayor’s Ouster from Office

Toronto Mayor Rob Ford has been found guilty of violating the Municipal Conflict of Interest Act, and will be removed from office. The much-anticipated court decision was handed down this morning.

Regrettably, this is unlikely the end of the story. Ford had announced, prior to the decision, his intention to run again should the judge remove him from office. The judge had the option to include, as part of Ford’s sentence, a prohibition on running again, but opted not to do so.

Ford has plenty of detractors. Some don’t like his politics. Some question his aptitude for the job of mayor of Canada’s largest city. Others worry about his being implicated not just in one but in a string of conflict of interest violations. But he also has plenty of defenders — after all, there are an awful lot of people out there who voted for him, and many of them are sticking to their guns on that choice. So the debate will rage. Plenty of ink is sure to be spilled in by both camps in the wake of this decision. I’ll limit myself here to just two quick points. One is about leadership, and the other is about governance.

First, leadership. Whatever your views of Ford, and whatever your views about the severity of his breach of the Conflict of Interest Act, you pretty much have to agree that Ford demonstrated a disappointing lack of leadership ethics, here. Yes (as his lawyer pointed out) people do make mistakes, and even a mayor can be forgiven for an incidental breach of a rule now and then. But what’s particularly worrisome here is that Ford, who by all rights ought to be the guy who leads Council in understanding its ethical obligations, seems to be utterly clueless about them. And he doesn’t seem terribly worried about that, either. According to a report of the court proceedings, Ford “testified he never read the Conflict of Interest Act or the councillor orientation handbook. Nor did he attend councillor training sessions that covered conflicts of interest.”

My second point has to do with governance. As Marcus Gee pointed out in the Globe and Mail recently, bumping Ford from office might be a case of ‘out of the frying pan, into the fire.’ Turmoil is likely to ensue. Council is now faced with the choice of having someone else — someone not elected to be mayor — serve out the rest of Ford’s term, or spending several million dollars of taxpayer money to hold another election. The result of turfing Ford seems especially troubling when we compare Ford’s ethical cluelessness with the out-and-out corruption that has brought down mayors in other major cities.

But what was the alternative? A judge has no choice but to call ‘em like he sees ‘em. Ford violated important rules, and those rules say he should be removed from office. Note that the judge in this case would have had the same range of sentencing options if the dollar amount at the heart of this case had been $3.15 rather than $3,150. A more sane system would perhaps allow for a broader range of penalties. Examples could be found in other systems and at other levels of government. A fine? Censure? Limitation of future mayoral discretion? Mandatory ethics training? I don’t know the answer. But a governance system that allows a political leader to blunder this way and then throws a city into turmoil is not a good system. Principles matter, but so does the way we implement them.

Needed: A High-Efficiency Oil Company

A Nimitz-class aircraft carrier is a hellishly complex piece of machinery. Picture a boat the length of three football fields, carrying several dozen heavily-armed aircraft into a war zone. It’s a boat with a crew of 3,200 plus an additional 2,400 involved in flying, maintaining, and launching aircraft. Oh, and it’s powered by a pair of Westinghouse A4W nuclear reactors.

As it happens, the US Navy has 10 such carriers. And on these unimaginably complex machines, errors of any significance are practically unknown. Time after time, F/A-18 Super Hornets laden with missiles are literally catapulted from the flight deck, sent out on missions, and then land again on the carrier’s super-short runway. And failure is practically unknown. This requires amazing skill on the part of pilots, but it also requires an incredible team effort, and a system built to include multiple redundant safeguards. The safety record of nuclear aircraft carriers is so good that they are now a standard example of highly-efficient, low-failure, complex systems, the kind that other complex systems should aspire to become. They are systems in which failure is simply not an option, and smart design makes sure it just doesn’t happen.

Next, let’s look at another complex system, namely an oil company and its network of pipelines. Let’s look in particular at one Canadian company, namely Enbridge. Enbridge’s pipeline system, as far as I can tell, is significantly more prone to failure than an aircraft carrier. Just under a year ago, I wrote about a leak in an Enbridge pipeline running past the tiny northern Canadian town of Wrigley. That was a small leak, but one that raised serious concerns for the local native community that eked out its living from the now-polluted land. That leak involved maybe a thousand barrels of oil. But just a year earlier, an Enbridge pipeline running through southwest Michigan spilled 20,000 barrels into a creek leading to the Kalamazoo River. And now, this past Friday, another significant leak was reported. This time, the company’s “Line 14″ spilled about a thousand barrels of crude into a field in Wisconsin. And this is just to name a few of the company’s pipelines over the last decade.

Of course, there’s no special reason to pick on Enbridge. Other companies in the oil exploration and refining industry have spotty records, too. BP is perhaps the most dramatic example that comes to mind. It was the company behind the explosion on the Deepwater Horizon, and the subsequent spill that devastated a big chunk of the Gulf coast.

There’s little doubt that, for the foreseeable future, oil companies like Enbridge and BP are a practical necessity. Like it or not, our economy depends on them. They are as necessary to our economy as an aircraft carrier is to the US’s naval supremacy. But the fact that those companies are so essential is precisely the thing that dictates that they must do better. They must seek the kind of never-fail efficiency exemplified by carriers like the USS Harry S. Truman and the USS Abraham Lincoln.

There are of course important differences between an aircraft carrier and a system of pipelines. For one thing, an aircraft carrier exists in a single place, under the watchful eye of a single Commanding Officer; a pipeline can stretch for thousands of unobserved miles, necessarily subject to only infrequent inspection. For another thing, various corporate motives summed up very imprecisely by the term “the profit motive” mean that there will always be temptations for oil companies to cut corners. But the example is there, and the body of knowledge is there. Oil companies can, and must, do better.

The Right Amount of Waste

A recent story in the NY Times provides some encouraging anecdotes about companies that are moving to take greater responsibility for recycling. Companies like Starbucks and Coca-Cola, for instance, are finding new — and in some cases profitable — ways to take responsibility for the waste that their product packaging generally becomes. More recycling generally means less waste, less energy used, and less pollution.

Waste and pollution are business-ethics topics about which there is some room for agreement between the moralist and the economist. The moralist points out that it’s unfair to make innocent bystanders suffer the ill effects of your factory’s pollution. The economist points out that market inefficiency can result when costs, financial or otherwise, are not internalized (i.e., when costs are instead imposed on innocent third parties).

But an economically-savvy point of view must also recognize that there is in fact a socially-efficient level of waste and pollution, and that that level is not zero. Waste and pollution could only be driven to zero by shutting down industry (of all kinds) altogether, and that would have disastrous effects. In other words, we would have to sacrifice things we care about, like the ability to raise world-wide standards of living, in order to reduce pollution and waste to zero.

Consider this analogy: economists likewise sometimes argue, rightly I think, that there is an efficient level of crime. The methods by which crime could be driven to zero are both enormously invasive and enormously costly. It is not efficient — not a good use of resources — to drive crime to zero, even if we think it technically possible.

So waste and pollution, we might say, are always bad, but not always wrong. They are features of a system the overall productivity of which is an enormous boon to humankind. It would be crazy to say that gains in productivity must be sought at any cost, but it is likewise crazy to value anything else (e.g., the environment) so highly that it drowns out all considerations of efficiency.

Now none of this tells us about whether particular efforts at waste reduction or pollution abatement are good or bad. But it helps frame the issue. What we’re looking for is the right level of pollution and waste, and that level is not zero. It is also likely to shift over time, as affluence grows and technology evolves, and as companies like Coke and Starbucks and a thousand anonymous start-ups find new ways to make environmental protection efficient, in the broadest, most ethically-significant sense of the word.

Environmental Profit-and-Loss

It’s attractive, but very dangerous, to try to calculate a ‘bottom line’ for a firm’s social or environmental performance. Attractive, because key stakeholders are increasingly interested in knowing those kinds of details. But the main danger should be obvious: there’s just no way to add up the disparate factors that make up a firm’s social or environmental performance. How do you add together litres-of-water-used plus hectares-of-habitat-destroyed? On the social performance side, how do you sum up number-of-women-in-senior-management plus fair-trade-contracts signed?

The answer of course is that you cannot. You can’t add up things that are represented in different units of measure. That’s not to say that you can’t or shouldn’t track and report these various numbers; but it casts a dim light on the prospects of arriving at a global assessment of a firm’s social or economic performance.

Unless, of course, you simply put a dollar figure on everything, in which case the math becomes quite easy.

That’s what shoemaker Puma has done, with its new Environmental Profit & Loss Account (E P&L). They’ve attached a dollar value to their greenhouse gas Emissions and their water consumption, and compared that to the dollar value of the shoes they produce. And, interestingly, they’re publicizing the fact that, environmentally, they’re in the red. They extract more from the environment than they provide to consumers. Environmentally, they’re operating at a loss.

Now, in standard terms, any firm that uses more (in dollars) than it puts out (in dollars) is going to go out of business pretty quickly. But as Puma’s Jochen Zeitz points out, that’s not the case for many environmental inputs because so many environmental inputs are unpriced — that is, they cost a company nothing. Pollution, for example, when unregulated, costs a company nothing, and when under-regulated costs the company less than the cost such pollution imposes on others. So what Puma has done is put a dollar value on these things so that they can figure out what their environmental bottom line would be, if they actually had to pay for all they consume and all they emit.

There are two key problems with such attempts to calculate an environmental bottom line this way. One is practical: there just aren’t uncontroversial ways to put a dollar figure on every unpriced environmental input. Certainly there are people who can provide methods for doing so; but that doesn’t mean there’s a clear right way to do it.

The other problem is, well, philosophical. It’s not at all clear that everything we want to say about environmental ethics can be summed up in terms of economic impact. What’s the dollar value of the loss of a species? Is the value of beautiful scenery really captured by summing up how much each of us would be willing to pay to preserve it?

Still, Puma deserves credit for this rather striking bit of transparency. Even though the “E P&L” is a pretty incomplete picture, it nonetheless does tell us something about the company’s overall environmental impact, and its commitment to doing better.

(Thanks to Andrew Crane for pointing me to the Puma story.)

Oil Poll: Human Rights or Environment?

A few days ago, I blogged about the notion of “ethical oil”. That’s the label one advocacy group is applying to oil from Canada’s oilsands, to distinguish it from oil from Saudi Arabia, a country with a less-than-admirable human rights record. That, of course, is a gross oversimplification.

But it’s still an interesting ethical issue. I said,

In principle, we could look at this as a matter of “choose your poison.” Do you want the oil that’s associated with human rights violations, or the oil that’s associated with environmental destruction?

It’s important to point out that there are two reasons this is a false dilemma. One is that consumers don’t actually get to choose: oil isn’t labeled by country of origin. The other reason is that neither of the nations named above is perfect, from a social and human rights point of view; nor is either country perfect from the point of view of environmental protection.

But it’s a philosophical thought-experiment worth conducting. So, let’s imagine: you’re driving your car, and your tank is near empty. You’re at an intersection with two gas stations. One is the Saudi brand and the other is the oilsands brand. Which one would you choose?


(Again, I do realize this is a gross oversimplification. It’s not a real choice. It’s a thought-experiment to get you to think about the relative value of the environment and human rights. Let’s all be thankful it’s not a choice we actually have to make.)

Ethical Oil: Choose Your Poison

There’s oil, and then there’s oil. Right? Or is there only, you know, oil? Does it matter, ethically, where the oil we consume comes from?

That issue has arisen very recently and caused a minor diplomatic dust-storm: a Canadian ad offering a moral critique of Saudi Arabian oil specifically has apparently offended the Saudis, who have asked that the ads be taken off the air.

See this summary, by John Terauds for the Toronto Star: Canadian ethical oil ad stirs Saudi ire

A Canadian-made television ad that speaks out against oil imported from Saudi Arabia has raised the ire of the Middle Eastern nation, prompting it to send a threatening legal notice to broadcaster CTV.

The 30-second ad, produced by Toronto-based ethicaloil.org, focuses on discrimination against women in the conservative Muslim country….

But the ad in question isn’t just anti-Saudi oil; it’s a defence, by means of contrast, of good ol’ Canadian oil, derived primarily from the oilands (a.k.a. tarsands) of Alberta. Yes, the same oilsands that have themselves generated so much criticism on environmental grounds. Now it’s certainly not the first time someone has been accused of greenwashing the tarsands. But to slam Saudi oil as unethical in order to proclaim tarsands the ‘ethical alternative’ really does strain credulity.

Now the critique of Saudi oil isn’t entirely without merit. Saudi cultural standards for the status and treatment of women are ethically indefensible. But the “ethical oil” claim for the oilsands is a serious stretch, at least if it’s supposed to point to a bright and clear difference not just in particular ethically-salient characteristics, but in overall ethical goodness.

In principle, we could look at this as a matter of “choose your poison.” Do you want the oil that’s associated with human rights violations, or the oil that’s associated with environmental destruction? Interesting dilemma, in principle. But for most of us, it’s a moot point: oil (and the gas that comes from it) is an undifferentiated commodity, and we don’t get to choose based on nation-of-origin. So it’s not like the ad in question is really intended to help consumers make more ethical consumption choices.

More likely, what the group behind the ad is doing is the rhetorical equivalent of fracking, injecting the novel term “ethical oil” into existing debates over the oilsands, not because the term actually makes any sense, but simply in the hopes of stirring something up.

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Update: Take a hew poll on this topic, here: Oil Poll: Human Rights or Environment?

Pipeline Leaks and Stakeholder Theory

When oil spills in a forest, does everybody matter? That’s the question posed by the events recounted in this recent CBC story: Wrigley residents voice pipeline spill concerns.

The story is about an Enbridge pipeline that sprung a leak in a tiny, remote town in Canada’s Northwest Territories. Not surprisingly, residents of tiny Wrigley are unhappy about the spill, and so Enbridge has to figure out not just what to do about the spill (i.e., how to clean it up) but what to do about the people of Wrigley. More generally, managers at Enbridge have got to figure out, on an ongoing basis, what their obligations are, and to whom those obligations are owed.

There’s an older school of thought (or more likely a caricature of an older school of thought) according to which shareholders are the only ones whose interests really need to be taken seriously. According to this view, an oil company’s managers’ only real obligations are owed to shareholders. After all, says this view, shareholders own the company, and they’re the ones who (indirectly) hired these managers to make money on their behalf. If anyone else matters, they matter in a strictly instrumental way. Don’t treat your customers badly, for example, because they’re the key to making a profit. Or, in the present case, don’t irritate the people of Wrigley, because if you do they might do something inconvenient, like protesting.

A leading modern alternative to the only-shareholders-matter view is sometimes called the “stakeholder” view (or sometimes, in academic circles, “stakeholder theory.”) The core of the stakeholder view is the idea that the real ethical task of corporate managers is to balance the interests of various stakeholders — various individuals and groups whose interests intersect with those of the corporation. After all, many people contribute to the success of a firm, from customers to suppliers to members of local communities. And if they all contribute, they all have the right to ask for something in return. (You can read a summary of my review of a recent book on the topic, here: Managing for Stakeholders.)

The pipeline story is an excellent example of both the strengths and the limits of the stakeholder perspective. It’s surely useful for executives at Enbridge (or any other company, in the midst of an environmental crisis) to survey the situation and ask, “Who do we need to talk to? Who has a stake in this?” So, are the people of Wrigley stakeholders in Enbridge? Pretty clearly, yes. But after that, things get complicated. Does the environment itself automatically count as a stakeholder of some sort, or does it only count if the well-being of the people of Wrigley is jeopardized? What about the residents of Zama, Alberta? That’s the little town, 850 km away from Wrigley, to which Enbridge is planning to ship the contaminated soil. What about me? Like most people, I’m a consumer of oil. I clearly have a stake, here, don’t I? Pretty clearly, there are stakeholders and then there are stakeholders.

But anyway, once you’ve figured out who the stakeholders are, then what? Let’s take the easy one, a group that’s directly affected, namely the people of Wrigley. What are they owed? Are they owed the cleanup? Are they owed a speedy one? At what cost? Do they have a right to participate in the decision-making, or just to be kept informed? Or are they owed, as one resident of Enbridge suggested, a “swimming pool or a hockey arena or something for the kids”?

As you can see, one problem with the stakeholder view is that the word “stakeholder”, itself, doesn’t actually clarify much. Yet some people tend to sprinkle it on like fairy dust, as if simply anointing someone a Stakeholder™ clarifies what is owed to them, ethically. Life in the little town of Wrigley should be so simple.

Greenpeace, Tar Sands and “Fighting Fire With Fire”

Do higher standards apply to advertising by industry than apply to advertising by nonprofits? Is it fair to fight fire with fire? Do two wrongs make a right?

See this item, by Kevin Libin, writing for National Post: Yogourt fuels oil-sands war.

Here’s what is apparently intolerable to certain environmental groups opposed to Alberta’s oil sands industry: an advertisement that compares the consistency of tailings ponds to yogourt.

Here’s what is evidently acceptable to certain environmental groups opposed to Alberta’s oil sands industry: an advertisement warning that a young biologist working for Devon Energy named Megan Blampin will “probably die from cancer” from her work, and that her family will be paid hush money to keep silent about it….

It’s worth reading the rest of the story to get the details. Basically, the question is about the standards that apply to advertising by nonprofit or activist groups like the Sierra Club and Greenpeace. But it’s also more specifically about whether it’s OK for such groups to get personal by including in their ads individual employees of the companies they are targeting.

A few quick points:

  • Many people think companies deserve few or no protections against attacks. Some people, for example, think companies should not even be able to sue for slander or libel. Likewise, corporations (and other organizations) do not enjoy the same regulatory protections and ethical standards that protect individual humans when they are the subjects of university-based research. Corporations may have, of necessity, certain legal rights, but not the same list (and not as extensive a list) as the list of rights enjoyed by human persons. So people are bound to react differently when activist groups attack (or at least name) individual human persons, as opposed to “merely” attacking corporations.
  • Complicating matters is the fact that the original ads (by Canadian Association of Petroleum Producers, or CAPP) themselves featured those same individual employees. So the employees had presumably already volunteered to be put in the spotlight. But of course, they volunteered to be put in the spotlight in a particular way.
  • For many people, the goals of the organizations in question will matter. So the fact that Greenpeace and the Sierra Club are trying literally to save the world (rather than aiming at something more base, like filthy lucre) might be taken as earning them a little slack. In other words, some will say that the ends justify the means. On the other hand, the particular near-term goals of those organizations are not shared by everyone. And not everyone thinks that alternative goals (like making a profit, or like keeping Canadians from freezing to death in winter) are all that bad.
  • Others might say that, being organizations explicitly committed to doing good, Greenpeace and the Sierra Club ought to be entirely squeaky-clean. If they can’t be expected to keep their noses clean, who can? On the other hand, some might find that just a bit precious. Getting the job done is what matters, and it’s not clear that an organization with noble goals wins many extra points for conducting itself in a saintly manner along the way.

(I’ve blogged about the tar sands and accusations of greenwashing, here: Greenwashing the Tar Sands.)

Thanks to LW for sending me this story.

Social Responsibilities of Business

The question of what a company’s social obligations are is an interesting one, and a vexed one. Unfortunately, the question is complicated by the fact that the very term “Corporate Social Responsibility” (“CSR”) has come to be associated with a particular view about the right answer to that question. As I’ve argued here before, the term “CSR” is now (regrettably) typically used to refer to the particular point of view that says that companies have an obligation to contribute socially, beyond the contribution they make by providing a valued product or service, by providing jobs, by providing investment opportunities, and by paying taxes.

That point of view was preemptively (but, to many, unconvincingly) criticized by economist Milton Friedman, in his famous 1970 article The Social Responsibility of Business is to Increase its Profits. Friedman asked whether it made sense to say that a corporation (or rather, a corporation’s management) has responsibilities to engage in such pro-social activities as:

  • keeping their prices low, in order to fight inflation;
  • spending more than required by law to reduce pollution;
  • hiring the hard-core unemployed (rather than simply focusing on hiring the most-qualified candidates).

Oversimplifying somewhat, Friedman argued that a corporation’s managers have neither skill-set, nor the obligation, nor indeed the right, to use shareholders’ money for such objectives. What they ought to do, according to Friedman, is to stick to what they know best — which also happens typically to be the job they were entrusted to do, namely to make profits for shareholders within the boundaries of law & general ethical rules.

Here are 2 modern examples of opportunities for companies to do business in a way that is explicitly aimed at positive social outcomes:

  • Pharmaceutical companies have choices about how to focus their research & development efforts. For example, they can focus their efforts at producing lifestyle drugs (for things like erectile dysfunction or hair loss), or they can aim at producing “me-too” drugs in categories that are already well supplied (e.g., ), Or they can focus on cures for so-called “orphan” diseases. Or they can search for new antibiotics in response to the growing problem of drug-resistant infections. The latter would meet a real social need. I don’t know how promising such lines of research would be, nor how lucrative. In the absence of such information, could we still say that pursing the development of new antibiotics is a social responsibility of drug companies?
  • With U.S. unemployment rates just below the double-digit mark (and Canada’s just slightly lower), governments are looking to industry (and sometimes to particular industries, such as biotech) to boost employment. And some people are liable to point to a social responsibility on the part of corporations to do some hiring. Certainly, people are prone to call it socially irresponsible when profitable companies lay off employees. But then, employment for its own sake is unlikely to be good for a company. If employees aren’t needed, then hiring them (or keeping them) is liable to reduce profits, and indeed liable to reduce the viability of the company as an entity that produces all kinds of benefits for a range of stakeholders.

Whatever you think of such purported social responsibilities, one thing is clear. If they really are responsibilities, they are at very least genuine examples of social responsibilities — responsibilities to promote the interests of something like society as a whole (as opposed to the interests of one particular stakeholder, like customers or employees).

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