Business and the Environment

During the 1980’s, the industrialised countries became more conscious of the degradation of the environment. By the 1990’s, in almost every sphere of environmental protection the key criterion for policy was the idea of sustainability, i.e. the reduction of all forms of environmental degradation to levels that do not cause lasting damage or permanent loss.

We have to take into consideration not only the costs of a business but the externalities as well. For example, if a factory producing cement which is located in a small town the firm may dispose of some of its waste in a local river or discharge dust into the atmosphere. Lorries making deliveries to the factory may disturb the local residents. The factory may be sited close to a local beauty spot, ruining the view. These are examples of spill-over effects or EXTERNALITIES. The costs to the whole of the society, the SOCIAL COSTS are made up of private costs of the businesses plus NEGATIVE EXTERNALITIES

The new kinds of technologies used in our modern age can disrupt the balance of nature. All different plants and animals in a natural community are in a state of balance. This balance is achieved by the plants and animals interacting with each other and with their non-living surroundings. The plants of the community are the producers, they use carbon dioxide, water an nitrogen to build up their tissues using energy in the form of sunlight. The food relationship between the different members of the community (plant-eating animals, flesh-eating animals) are known as food chains or food webs. If we intervene into this, we can disrupt the balance of nature and cause global environmental damage.

1. Deforestation

It has been estimated that tropical rainforests are being cut down and burned at the rate of 11 million hectares a year – about 20 hectares a minute. At this rate all tropical rainforests will have disappeared within 85 years. As a result of the spread of environmental destruction some 2500 plant species and more than 1.100 species and subspecies of mammals, birds, amphibians, reptiles and fish are threatened with extinction. Untouched tropical forest could contribute to the balance of nature. If we cut down most of the trees, we can cause soil erosion: rain can wash away the fertile layer of the soil. After this no plants can grow there. So we can disturb the balance of food chain.

2. Pollution

Manufacturing and other business activities pollute the air, the water and the soil. Chemicals and pollutants get into the air. Because of this acid rain may fall, which can damage plants and through plants animals, too. Oceans and seas cover 70% of the world. They are heavily damaged by pollution, habitat destruction and overfishing.

3. The depletion of the ozone layer.

The ozone layer shields the earth from excessive ultraviolet radiation. It becomes even thinner because of the frenon gas, which can be found, for example, in deodorants. Recently companies and firms make environment-friendly, ozone-friendly products. We can find a sign, e.g. a globe sign on these.

4. The Greenhouse Effect

The greenhouse effect is caused by an increase in the amount of carbon dioxide  in the atmosphere. It leads to changes in the Earth’s climate. The amount of carbon dioxide in the atmosphere will double in the next 50 years and the temperature worldwide will rise by 2 Celsius. Although a temperature rise of 2 Celsius may not seem significant, the local effects may be much greater: In polar regions a rise of 10 C by 2025 is expected and in Northern Europe a rise of 4 C. The southern states of the USA can expect hotter summers and less rainfall, leading to worse conditions in agriculture, and the Mediterranean region will be much drier and hotter than now. As a consequence of a temperature rise, the polar icecaps will start to melt and the oceans will expand as more snow as ice melt. It is predicted that the level of the sea will have risen by 0.5 to 1.5 metres by 2025 and this will affect many low-lying areas of the world. Millions of people today live less than one meter above the sea level. Perhaps the first effects are already being felt.

5. Nuclear power

We use nuclear energy to produce electricity. But power stations make a lot of nuclear waste too, and people have been afraid of the possible disasters since the Chernobyl disaster. Besides, there is the problem of the safe disposal of radioactive waste.

6. The ‘Greens’ as a  political power

The Green Party’s share of the vote went up from zero to 15% in the recent European elections. They are a radical political force and unlike other parties they are against nuclear power and nuclear weapons. The Green Party attempts to exert pressure on public policy and to influence industry.

7. Environmental pressure groups

The three main non political environmental pressure groups are the Friends of Earth, Greenpeace, and the Worldwide Fund for Nature (WWF; Természetvédelmi Világalap). These organisations have been working for many years, raising funds and raising public awareness of the need to protect the environment. Their activity is to propose specific solutions to specific problems. If a power station is planned or a new motorway is to be built, they want to make sure it is done with the least possible damage to the environment. Recently we can choose environment-friendly, ozone-friendly products. Companies that are not `green’ will lose business to those who have a green image.


Peaceful direct action by Greenpeace has invoked the power of public opinion which, in turn, has forced changes in the law to protect wildlife and to stop the pollution of the environment.

Recent results:

  • Protest voyage into a nuclear test zone – the test was disrupted
  • Protection of the whales – commercial whaling is banned
  • Protest against dropping barrels of radioactive waste – dumping nuclear waste and chemicals at a sea has been stopped.