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Business Models for Sustainability  

Nancy Bocken

Human activity is increasingly impacting the environment negatively on all scales. There is an urgent need to transform human activity toward sustainable development. Business has a key role to play in this sustainability transition through technological, product and service, and process innovations, as well as innovative business models. Business models can enable new technologies, and vice versa. These models are therefore important in the transition to sustainability. Business models for sustainability, or synonymously, sustainable business models, take holistic views on how business is operated in relation to its stakeholders, including the society and the natural environment. They incorporate economic, environmental, and social aspects in an organization’s purpose and performance measures; consider the needs of all stakeholders rather than giving priority to owner and shareholder expectations; treat “nature” as a stakeholder; and take a system as well as a firm-level perspective on the way business is conducted. The research field of sustainable business models emerged from fields such as service business models, green and social business models, and concepts such as sharing and circular economy. Academics have argued that the most service-oriented business models can achieve a “factor 10” environmental impact improvement if designed the right way. Researchers have developed various conceptualizations, typologies, tools, and methods and reviews on sustainable business models. However, sustainable business models are not yet mainstream. Important research areas include the following: (a) tools, methods, and experimentation; (b) the assessment of sustainability impact and rebounds for different stakeholders; (c) sufficiency and degrowth; and (d) the twin revolution of sustainability and digital transition. First, a plethora of tools and approaches are available for inspiration and for creation of sustainable business model designs. Second, in the field of assessment, methods have been based on life cycle thinking considering the supply chain and how a product is (re)used and eventually disposed of. In the field of sufficiency, authors have recognized the importance of moderating consumption through innovative business models to reduce the total need for products, reducing the impact on the environment. Finally, researchers have started to investigate the important interplay between sustainability and digitalization. Because of the potential to achieve a factor 10 environmental impact improvement, sustainable business models are an important source of inspiration for further work, including the upscaling of sustainable business models in established businesses and in new ventures. Understanding how to design better business models and preempting their usage in practice are essential to achieve a desired positive impact. In the field of sufficiency, the macro-impacts of individual and business behavior would need to be better understood. In the area of digital innovation, environmental, societal, and economic values need scrutinization. Researchers and practitioners can leverage the popularity of this field by addressing these important areas to support the development and roll-out of sustainable business models with significantly improved economic, environmental, and societal impact.


Deforestation: Drivers, Implications, and Policy Responses  

Christiane W. Runyan and Jeff Stehm

Over the last 8,000 years, cumulative forest loss amounted to approximately 2.2 billion hectares, reducing forest cover from about 47% of Earth’s land surface to roughly 30% in 2015. These losses mostly occurred in tropical forests (58%), followed by boreal (27%) and temperate forests (8%). The rate of loss has slowed from 7.3 Mha/year between 1990–2000 to 3.3 Mha/year between 2010–2015. Globally since the 1980s, the net loss in the tropics has been outweighed by a net gain in the subtropical, temperate, and boreal climate zones. Deforestation is driven by a number of complex direct and indirect factors. Agricultural expansion (both commercial and subsistence) is the primary driver, followed by mining, infrastructure extension, and urban expansion. In turn, population and economic growth drive the demand for agricultural, mining, and timber products as well as supporting infrastructure. Population growth and changing consumer preferences, for instance, will increase global food demand 50% by 2050, possibly requiring a net increase of approximately 70 million ha of arable land under cultivation. This increase is unlikely to be offset entirely by agricultural intensification due to limits on yield increases and land quality. Deforestation is also affected by other factors such as land tenure uncertainties, poor governance, low capacity of public forestry agencies, and inadequate planning and monitoring. Forest loss has a number of environmental, economic, and social implications. Forests provide an expansive range of environmental benefits across local, regional, and global scales, including: hydrological benefits (e.g., regulating water supply and river discharge), climate benefits (e.g., precipitation recycling, regulating local and global temperature, and carbon sequestration), biogeochemical benefits (e.g., enhancing nutrient availability and reducing nutrient losses), biodiversity benefits, and the support of ecosystem stability and resiliency. The long-term loss of forest resources also negatively affects societies and economies. The forest sector in 2011 contributed roughly 0.9% of global GDP or USD 600 billion. About 850 million people globally live in forest ecosystems, with an estimated 350 million people entirely dependent on forest ecosystems for their livelihoods. Understanding how to best manage remaining forest resources in order to preserve their unique qualities will be a challenge that requires an integrated set of policy responses. Developing and implementing effective policies will require a better understanding of the socio-ecological dynamics of forests, a more accurate and timely ability to measure and monitor forest resources, sound methodologies to assess the effectiveness of policies, and more efficacious methodologies for valuing trade-offs between competing objectives.


The Economics of Watershed Management  

Brent M. Haddad

Watersheds are physical regions from which all arriving water flows to a single exit point. The shared hydrology means that other biophysical systems are linked, typically with upper-gradient regions influencing lower-gradient ones. This situation frames the challenge of managing economic and other uses of watersheds both in terms of individual activities and their influence on other connected processes and activities. Economics provides concepts and methods that help managers with decision making in the complex physical, biological, and institutional environment of a watershed. Among the important concepts and methods that help characterize watershed processes are externalities, impacts of economic activity that fall upon individuals not party to the activity, and third parties, individuals impacted without consent. Public goods and common pool resources describe categories of things or processes that by their nature are not amenable to regular market transactions. Their regulation requires special consideration and alternative approaches to markets. Benefit-cost analysis and valuation are related methods that provide a means to compare alternative uses of the same system. Each is based on the normative argument that the best use provides the greatest net benefits to society. And intergenerational equity is a value orientation that argues for preservation of watershed processes for the benefit of future generations. The need for effective watershed management methods pushed 20th-century economists to adapt their discipline to the complexity of watersheds, from which emerged subdisciplines of natural resource economics, environmental economics, and ecological economics. The field is still evolving with a growing interest in data gathering through land-based low-cost data collection systems and remote sensing, and in emerging data analysis techniques to improve management decisions.


Ecosystem Management of the Boreal Forest  

Timo Kuuluvainen

Boreal countries are rich in forest resources, and for their area, they produce a disproportionally large share of the lumber, pulp, and paper bound for the global market. These countries have long-standing strong traditions in forestry education and institutions, as well as in timber-oriented forest management. However, global change, together with evolving societal values and demands, are challenging traditional forest management approaches. In particular, plantation-type management, where wood is harvested with short cutting cycles relative to the natural time span of stand development, has been criticized. Such management practices create landscapes composed of mosaics of young, even-aged, and structurally homogeneous stands, with scarcity of old trees and deadwood. In contrast, natural forest landscapes are characterized by the presence of old large trees, uneven-aged stand structures, abundant deadwood, and high overall structural diversity. The differences between managed and unmanaged forests result from the fundamental differences in the disturbance regimes of managed versus unmanaged forests. Declines in managed forest biodiversity and structural complexity, combined with rapidly changing climatic conditions, pose a risk to forest health, and hence, to the long-term maintenance of biodiversity and provisioning of important ecosystem goods and services. The application of ecosystem management in boreal forestry calls for a transition from plantation-type forestry toward more diversified management inspired by natural forest structure and dynamics.



Giles Jackson

Ecotourism is responsible travel to natural areas that educates and inspires through interpretation—increasingly paired with practical action—that helps conserve the environment and sustain the well-being of local people. Ecotourism is the fastest-growing segment of the travel and tourism industry, and its economic value is projected to exceed USD$100 billion by 2027. Ecotourism emerged in the 1960s as a response to the destructive effects of mass tourism and has been embraced by an increasing number of governments, especially in the developing world, as a vehicle for achieving the UN Sustainable Development Goals. As an emerging, interdisciplinary field of study, ecotourism has reached a critical inflection point, as scholars reflect on the achievements and shortcomings of several decades of research and set out the research agenda for decades to come. The field has yet to achieve consensus on the most basic questions, such as how ecotourism is, or should be, defined; what makes it different from nature-based and related forms of tourism; and what factors ultimately determine the success or failure of ecotourism as a vehicle for sustainable development. This lack of consensus stems in part from the different perspectives and agendas within and between the academic, policy, and industry communities. Because it is based on measured and observed phenomena, empirical research has a critical role to play in advancing the theory and practice of ecotourism. However, scholars also recognize that to fulfill this role, methodologies must evolve to become more longitudinal, scalable, inclusive, integrative, and actionable.


Rethinking Conflict over Water  

Scott M. Moore

It has long been accepted that non-renewable natural resources like oil and gas are often the subject of conflict between both nation-states and social groups. But since the end of the Cold War, the idea that renewable resources like water and timber might also be a cause of conflict has steadily gained credence. This is particularly true in the case of water: in the early 1990s, a senior World Bank official famously predicted that “the wars of the next century will be fought over water,” while two years ago Indian strategist Brahma Chellaney made a splash in North America by claiming that water would be “Asia’s New Battleground.” But it has not quite turned out that way. The world has, so far, avoided inter-state conflict over water in the 21st century, but it has witnessed many localized conflicts, some involving considerable violence. As population growth, economic development, and climate change place growing strains on the world’s fresh water supplies, the relationship between resource scarcity, institutions, and conflict has become a topic of vocal debate among social and environmental scientists. The idea that water scarcity leads to conflict is rooted in three common assertions. The first of these arguments is that, around the world, once-plentiful renewable resources like fresh water, timber, and even soils are under increasing pressure, and are therefore likely to stoke conflict among increasing numbers of people who seek to utilize dwindling supplies. A second, and often corollary, argument holds that water’s unique value to human life and well-being—namely that there are no substitutes for water, as there are for most other critical natural resources—makes it uniquely conductive to conflict. Finally, a third presumption behind the water wars hypothesis stems from the fact that many water bodies, and nearly all large river basins, are shared between multiple countries. When an upstream country can harm its downstream neighbor by diverting or controlling flows of water, the argument goes, conflict is likely to ensue. But each of these assertions depends on making assumptions about how people react to water scarcity, the means they have at their disposal to adapt to it, and the circumstances under which they are apt to cooperate rather than to engage in conflict. Untangling these complex relationships promises a more refined understanding of whether and how water scarcity might lead to conflict in the 21st century—and how cooperation can be encouraged instead.


Sea Level Rise and Coastal Management  

James B. London

Coastal zone management (CZM) has evolved since the enactment of the U.S. Coastal Zone Management Act of 1972, which was the first comprehensive program of its type. The newer iteration of Integrated Coastal Zone Management (ICZM), as applied to the European Union (2000, 2002), establishes priorities and a comprehensive strategy framework. While coastal management was established in large part to address issues of both development and resource protection in the coastal zone, conditions have changed. Accelerated rates of sea level rise (SLR) as well as continued rapid development along the coasts have increased vulnerability. The article examines changing conditions over time and the role of CZM and ICZM in addressing increased climate related vulnerabilities along the coast. The article argues that effective adaptation strategies will require a sound information base and an institutional framework that appropriately addresses the risk of development in the coastal zone. The information base has improved through recent advances in technology and geospatial data quality. Critical for decision-makers will be sound information to identify vulnerabilities, formulate options, and assess the viability of a set of adaptation alternatives. The institutional framework must include the political will to act decisively and send the right signals to encourage responsible development patterns. At the same time, as communities are likely to bear higher costs for adaptation, it is important that they are given appropriate tools to effectively weigh alternatives, including the cost avoidance associated with corrective action. Adaptation strategies must be pro-active and anticipatory. Failure to act strategically will be fiscally irresponsible.


Environmental and Cultural Flows in Aotearoa and Australia  

Erin O'Donnell and Elizabeth Macpherson

In settler colonial states like Australia and Aotearoa New Zealand, water for the environment and the water rights of Indigenous Peoples often share the common experience of being too little and too late. Water pathways have been constrained and defined by settler colonialism, and as a result, settler state water law has both a legitimacy problem, in failing to acknowledge or implement the rights of Indigenous Peoples, and a sustainability problem, as the health of water systems continues to decline. In both Australia and Aotearoa New Zealand, the focus of water law has historically been to facilitate use of the water resource to support economic development, excluding the rights of Indigenous Peoples and poorly protecting water ecosystems. However, in the early 21st century, both countries made significant advances in recognizing the needs of the environment and the rights of Indigenous Peoples. In Aotearoa New Zealand, Te Tiriti o Waitangi (the Treaty of Waitangi) provides an important bicultural and bijural framework that is beginning to influence water management. In 2017, as part of a Treaty dispute settlement, Aotearoa New Zealand passed legislation to recognize Te Awa Tupua (the Whanganui River) as a legal person and created a new collaborative governance regime for the river, embedding the interests and values of Māori at the heart of river management. In Australia, water recovery processes to increase environmental flows have been under way since the 1990s, using a combination of water buybacks and water savings through increased efficiency. There has been growing awareness of Indigenous water rights in Australia, although progress to formally return water rights to Indigenous Peoples remains glacially slow. Like Aotearoa New Zealand, in 2017, Australia also passed its first legislation that recognized a river (the Birrarung/Yarra River) as a living entity and, in doing so, formally recognized the responsibilities of the Wurundjeri Woi Wurrung people as Traditional Owners of the river. This trend toward more holistic river management under a relational paradigm, in which the relationships between peoples and places are centered and celebrated, creates a genuine opportunity for water governance in settler states that begins to address both the legitimacy and sustainability flaws in settler state water law. However, these symbolic shifts must be underpinned by relationships of genuine trust between Indigenous Peoples and the state, and they require significant investment from the state in their implementation.