CHAPTER 11

Ethics and Sustainable Development

Sustainable development requires human beings to make environmentally and socially responsible decisions to protect the species and the earth. These decisions are made by individuals, a community, institutions, or nations. The decisions involve views and perceptions about the planet’s ecological and social environment and the impact of human activities on it. The judgments based on these perceptions are essentially ethical in nature. Here, personal beliefs, social experiences, and awareness of human–nature interactions play a critical part in the formation of ethical views. Sustainability is not merely a goal to be attained, but also a value based outlook about life on the planet.

We start our discussion by looking at alternative ethical positions on the human–nature relationship. This is followed by a discussion on approaches to attain distributive justice, which is a necessary condition for sustainability. From trying to understand ethics from an individual perspective, we then look at a particular instance of formation of a collective ethic in the context of a firm. Challenges in developing a collective ethic and social norms are discussed last.

The Human–Nature Relationship

How human beings perceive the problem of sustainable development depends to a large extent on how their relationship with nature is comprehended. There could be a multiplicity of perceptions, which would lead to alternative moral positions that could be adopted (Newman 2011). A common view of the world would be where human beings are essential and the rest of nature is perceived from this central position. This view is referred to as an anthropocentric one. An alternative view, perhaps not as prominent as the first one, looks at human beings as part of nature at par with other species. This view is referred to as a biocentric one. These two views could be sub-divided into consequentialist and deontological ethics. Sustainable development is a goal that could be attained through different paths depending on alternative ethical decisions taken at the individual or policy level. The consequentialist position focuses more on the goodness of outcomes, given a broad objective to be attained. The deontologist position, on the other hand, focuses more on the nature of the means to the end to be attained. To them, a good consequence may not be acceptable if the means adopted to attain it is not right. Hence, a variety of ethical positions are possible in the context of the human–nature relationship. These are briefly discussed as follows.

Anthropocentric ethics posit that nature is of instrumental value and is there to be used for the benefit of human beings. This ethical position is consequentialist. If, for instance, one could extract resources for human consumption, then it would be a positive consequence. On the other hand, any natural calamity that has an adverse effect on society would be termed as a negative consequence, and outcomes would be viewed exclusively in terms of the impact on human wellbeing. Most mainstream approaches to the understanding of economic development and change view nature through this ethical lens.

In some cases, the anthropocentric view might attribute an intrinsic value to nature, and hence would consider it to be part of human duty to conserve nature. Any activity that despoils or degrades nature would be considered morally wrong, even if it improves human wellbeing in the short term. This approach is deontological, in the sense that the consequence of conservation of nature is not of any special importance.

In the biocentric approach, human beings are considered as essential as all other life forms in nature. A biocentric and consequentialist ethical position would posit that nature is of instrumental value for the requirements of life for all living beings. Hence, any change in the environment would have to be evaluated in terms of its impact on all species. For instance, an environmental impact that negatively affects a particular species, say owls, but creates new opportunities for human beings would not be acceptable unless it could be demonstrated that there is a net gain in the movement toward sustainability.

Finally, a biocentric deontological ethical position would imply that nature has an intrinsic value for all living beings and should be preserved, independent of what nature’s effect is on particular living beings. For instance, if in a storm, a bird’s nest is destroyed, the deontological view maintains that nothing can be done about the situation because-both the storm and birds nest are part of nature, and this is a natural phenomenon.

Both anthropocentrism and biocentrism can be problematic in practical situations. In an anthropocentric perspective, it might be asked whether our obligation, or the value we ascribe to human beings, is more important than that ascribed to other living beings. For instance, one could argue that does anthropocentricism imply a situation where other living beings have no rights at all or some rights that are subordinate to the rights of humans. Would it be morally acceptable if we kill animals for food? Biocentrism, on the other hand, implies that all living beings are considered to be equally important in the natural order of things. However, it is well accepted in philosophy that all living beings do not possess moral agency, in the sense that they are conscious of their actions and can explain those actions in terms of why they were enacted.

Another problem stems from the importance of putting a value to different kinds of outcomes that affect nature. In justifying human actions to protect and preserve the environment, some estimate of the value of protecting nature or the cost of despoiling nature has to be made. This is not easily done as already discussed in Chapter 6. In many cases, as the risks are not known with any certainty, risk aversion may be the best strategy to adopt. This is the notion of the precautionary principle, which states that the avoidance of loss is preferred to compensation after damage, when the extent of damage expected is not known beforehand. An alternative decision could be taken on the basis that because the risks are unknown, especially in the context of their magnitude and incidence, it would be best to ignore it. For instance, policies pertaining to the promotion of genetically modified organisms differ among countries depending on which stance they adopt.

Most ethical positions adopted in the literature on sustainable development take an anthropocentric view, but often incorporate nuanced positions which have biocentric implications. In other words, there is a value to biodiversity that is imputed only because in the ultimate analysis the preservation of biodiversity is essential to human survival.

Ethics and Distributive Justice

In this section, we will discuss the essential characteristic of sustainable development where issues of ethics and distributive justice come in. Sustainable development deals with both the present and the future (both short- and long-term future) in a basic yet incomplete way. Some action has to be taken to make development sustainable so that future generations of human beings can continue to live by meeting their material needs. If no action is taken at the present time, then there could be (nonzero probability) a shortage of resources in the future. This, in turn, could lead to catastrophic costly change.

Let us first consider the present generation of human beings inhabiting the earth. We have rich countries and poor countries as well as rich and poor people within each country. If we view the major environmental issues that could lead to unsustainability, then the rich countries have played a major role in the creation of those problems, such as greenhouse gases, ocean acidification, loss of biodiversity, rising toxic pollution, and the ozone hole. The poorer countries, on the other hand, have made a much smaller contribution in this regard. If large environmental problems crop up, then it is more likely that the poor countries and the poor people of the world will be most adversely affected. For instance, the overwhelming majority of poor people live in the tropical regions of the world, and the hot and arid regions are supposed to be affected the most through declining agricultural productivity. This loss of productivity could come from shortage of water, higher temperatures, and the loss of nutrients in the top soil. Food shortages would lead to higher prices, which, in turn, would cause economic hardship. This is an issue of distributive justice for the present generation. Had there been less disparity, the ability of the poor to adapt to adverse situations would be better.

If we consider the future generations, the question of distributive justice arises when our actions in the present damage the environment to such an extent that future generations are unable to live and enjoy a material standard of living that the present generation has experienced. This could only be corrected if the present generation made some changes in their lifestyles and ways of producing goods and services, so as to ensure that in the future people do not get hurt by becoming poorer. This inter-generational distributive justice gets intrinsically connected with the issue of intragenerational distributive justice. The practical issue in this matter boils down to who pays for ensuring sustainable development. It would be unjust to expect the poor countries or the poor people of the world to pay for correcting problems that they had little role in creating and are more likely to get hurt in the event of environmental disaster.

Utilitarianism

We now take a look at few important ethical positions that have been used by economists in their evaluation of distributive justice. The philosophy of utilitarianism goes back to Bentham (1907) where the subjective understanding was that economic activities were undertaken to provide satisfaction or utility (also see Mill, Bentham, and Ryan 1987). The state of affairs of a society or an individual was judged by the total utility of that state. Society would be considered to be better off if total utility increased. This total utility would be made by aggregation of the utility of each individual. If one judged a social state in terms of its total utility alone, then two important things would be missing in that calculation. The first would be that, if individuals looked at the natural environment purely from an instrumental point of view, then issues of environmental damage would not be addressed at all because utility would be dependent on the individuals’ consumption or income, which could be enhanced by a greater use of exhaustible natural resources. The calculus of individual utility could lead to improvements in utility only to the extent that it increased the measure through consumption or income. The second implication of this would be that a high level of utility for a society could be consistent with a great deal of inequality in consumption and incomes. Hence, the utilitarian ethic is oblivious to environmental damage, as well as a great deal of social and economic inequity.

There have been critiques of ethics of utilitarianism (Sen 1987, Sen and Williams (ed) 1982) in the way it has been used in economic theory.

One way of reconciling environment to the utilitarian calculus could be to assume that each individual assigns a distinct value to environmental quality over and above his or her consumption or income. Hence, utility would be defined over environmental quality and individual consumption or income. In such a situation, a rise in income concomitant with a dramatic fall in environmental quality would not necessarily lead to a rise in total utility. As far as inequalities are concerned, it is easy to see that, for a given amount of income, redistribution from the rich to the poor would necessarily increase total utility. The reason is that it is generally considered that incremental utility from additional income diminishes. Hence, taking one unit of income from the rich would reduce total utility by a smaller amount than the increase in utility when that unit was transferred to a poor person. Hence, utilitarianism may not be inconsistent with having a more even distribution of income, though mechanically summing up individual utilities could hide this important characteristic.

We had argued that inequality was ethically unjustifiable in the context of distributive justice. However, modern economies in the recent past have been judging economic performance to a large extent by the growth rate of GDP alone. This has resulted in sharply increasing inequalities, which many economists have commented on (Stiglitz 2012, Piketty 2014, 2015). The persistence of inequality make it difficult to use utilitarian calculus to move toward sustainable development.

Nozick and the Importance of Non-Coercion

Another philosopher whose ideas have had a significant influence in the ethical justification of a market economic system was Robert Nozick (1974). Nozick argued that the means to an end were as important as the end itself. Thus, if the end is to reduce the extent of carbon accumulation to minimize the impact of climate change, the means to do so must not be coercive like the state using command and control policies. If the right to life is the most important right a human being possesses, then the right not to be coerced gets precedence over all other rights because without this guarantee life itself would be jeopardized.

In the context of the political economy, this position has a number of implications. One implication is that any economic outcome that was the result of voluntary (non-coercive) transactions would be deemed to be fair and just, provided two conditions were satisfied. First, the transaction of exchange took place where the things exchanged were obtained through previous non coercive actions. The second condition would be that all individuals are deemed to be self-owners, in the sense that they not only own their own bodies, mind, and labor, but also own things (material goods) as private property. Another implication is that natural objects freely available in the environment, for instance, trees, land, and water bodies, can be acquired as private property. In this philosophical position, nature becomes a thing to be acquired and used for human benefits. There is no concern with respect to coercion of nature. Yet another implication is that, if the outcome of a set of market transactions is deemed to be fair and just, then any attempt to redistribute resources and goods would be deemed as coercion of some people who would have to give up their entitlements. Hence, any taxation by any authority would be considered as an act of coercion. It may be noted that Nozick was not in favor of a stateless anarchy, but in favor of an ultra-minimal state, which could raise taxes as a special case to provide essential services: a service (police, army) to protect private property and a retributive justice system to punish those who coerce others.

Rawls and the Provision of Basic Goods

John Rawls’ theory of justice (1971) is another philosophical position, which has been extensively used in the economics literature to understand the fairness or otherwise of a state of affairs. Rawls argument is that market economies are quite efficient in terms of allocation of resources among alternative uses and the production of goods and services. However, the distributional outcome of this could well be terribly unequal and this would be unjustifiable. Unlike Nozick, Rawls argues for an interventionist state, which would redistribute resources according to a particular criterion.

Rawls’ theory is premised on two basic principles, the principle of maximin and the difference principle. The maximin principle emerges from an abstract situation referred to as the original position where economic agents who will comprise a society are handicapped by a veil of ignorance. Each agent knows that, in playing the market game, some will end up rich and others will end up poor. The ignorance is about not knowing who will end up becoming rich or poor. Hence, Rawls argued that it is in everyone’s interest to agree that the worst-off individual is made as well-off as possible through an effective redistributive mechanism, which does not go so far as to take away resources from the rich in a way that reverses the ranking. This is maximizing the position of the minimally placed individual. Here, Rawls made an elaborate case for the provision of a set of basic goods for this purpose. His understanding of basic goods was quite broad. Liberty and freedom were included as basic goods and services. The second principle, referred to as the difference principle, argues that inequalities in wealth and power are justified only to the extent that they reside in positions that are accessible to all, and this inequality is necessary to ensure the effective implementation of the maximin principle. For instance, the head of a democratic state is more powerful than other citizens, but the position is open to all citizens. It is also evident that a representative government is required to undertake the redistribution to achieve a socially optimal outcome.

In the context of sustainable development, the Rawlsian position is important because it leads to more equal distributions of income and wealth. The position can be further augmented by including environmental goods along with liberty, freedom, and other goods and services as a part of the basket of basic goods. If this is not done, then there could be outcomes that are contradictory in nature. Environmental pollution for instance, or damaging nature in any way would be justified if it enhanced the incomes of the poorest people or in an international situation of the poorest countries through a redistributive mechanism.

Sen and Capabilities

Amartya Sen has been another economist-philosopher whose work has significantly influenced economic thinking (1985, 2001). Sen’s framework builds on rights and liberties as something that gives an individual entitlement to a thing of value. From society’s point of view, if there is a severe deprivation of entitlements, then the outcome is likely to be more unequal. Sen would consider such a distributive outcome as unjust. To address this inequality, Sen argues about the importance on individual human capabilities, such as enjoying good health or being educated. As human beings, each of us tries to achieve a chosen set of capabilities. This choice is not only dependent on one’s preferences, but is also conditioned to a very large extent by the social deal available to each.

A simple example will suffice. Consider a poor person having the right to get food from the state. This would give the individual an entitlement to receive a specified quantity of subsidized food from the public distribution system. The capability obtained from consuming this food would be adequate nutrition and become part of a bigger freedom to enjoy good health. The social situation faced might be such that the person has limited access to education or health care facilities. The nutrition level attained in the long haul would be severely affected by the lack of medical attention. Similarly, the lack of education could well restrict even a person of good health and adequate nutrition to function in terms of many activities where good health and basic education complement one another to provide a set of fundamentally important capabilities.

The ultimate goal of an expanding sphere of capabilities, in Sen’s framework, is not merely about material goods and services. The goals include achieving freedom from hunger, ill health, insecurity, and homelessness, as well as self-actualization, recognition from the community, and having fulfilling relationships with other people.

This framework has important implications as far as the human–nature relationship is concerned. Take for instance the human capability of enjoying good health. This could be hampered if there is unchecked pollution in air and water or a sudden decline in agricultural productivity. A clean environment is essential for achieving many basic capabilities. Similarly, a loss of biodiversity could seriously interrupt the food chain, leading to health-related problems for human beings. This framework is not only restricted to human beings, but can be extended to all living beings if a reasonably common capability that human beings wish to enjoy could be defined in terms of existing harmoniously in the world with other living beings. Sen (2004) also argues that living in harmony with all living beings may not be restricted to a narrow view of beings that currently inhabit the planet. Living a harmonious life would require a commitment to make sure that those who inherit the earth are not left on ruins generated by the current generation.

Extending Sen’s position, one might prescribe environmental protection as a human right, which leads to the freedom to use and enjoy nature without despoiling it in any irreversible way. This, however, has some practical limitations because, to be effective, it has to be made into an international law. Apart from arriving at a global consensus on the details of such a law, there are legal complications of allowing proceedings on behalf of people who are yet unborn. (Finkmoore 2010)

Business Ethics

Businesses are an important set of institutions that determine the human–nature relationship and its impact on the planet. As they are responsible, both for driving consumption and for production activities, their role is crucial in bringing about sustainable practices and influencing social values. Ethics usually considers how an individual moral agent views a situation and arrives at a reason for action. It is essentially individualistic. When discussing business actions, a fundamental problem arises in ascribing an ethical position to a set of individuals who comprise the organization or the firm. Within the firm, different individuals who take decisions can well have different moral positions on a particular issue. How then is the firm’s ethical position arrived at? Is it always determined through a consensus based on debate and discussion, or is it ultimately determined by the head of the organization? Finally, is it possible to treat the firm as a moral individual on whose action we can pass judgment about right and wrong? It is a problem of collective or social ethic, which is often determined by the culture or values that are well regarded and promoted by the organization. Very often, the process of arriving at the firm’s ethical position is not available in the public domain. For instance, the debate that can take place in a committee meeting might be reflected in the minutes of the meeting, but would hardly be available for public consumption.

Despite this, much can be inferred from the actions of firms on various issues that bear upon the contribution made toward sustainable development. It is expected that all firms that come under the purview of different kinds of environmental regulations would comply with the requirements. This would be the minimal ethical responsibility of the firm. Many firms can be observed to go beyond the regulatory compliance and voluntarily adopt a new technology or new processes, products, or raw materials (see Chapter 8). Obviously, these firms make a greater contribution toward sustainable development. If firms adopt such actions, it is consistent with their business strategy to grow and sustain themselves. This is an outcome of the business environment that the firm operates in coupled with a self-enlightened leadership at the helm of the firm. Any business firm’s relationship with its customers, vendors, and employees reflects the ethics and culture of the organization. For instance, in dealing with its internal processes or with purchases made from vendors, the firm may insist on certain sustainable practices that are environmentally friendly. The firm’s relationship with its customers is more nuanced. Customers’ tastes and preferences along with their price sensitivity of demand determine which goods and services are sold and at what prices. Would a firm agree to educate its customers into becoming more sustainable in their consumption? Would it be transparent about the long-term sustainability implications of production and consumption of different goods and services?

There could be an ethical dilemma if the firm finds itself in a situation where, by reducing a social cost they are creating, they will incur a large private cost internal to the firm. Alternatively, going beyond regulatory compliance and contributing to sustainable development may not align well with the firm’s core business strategy. Should the firm relook and revamp its business strategy, or should it continue with business as usual, while being a good corporate citizen by complying? It may be noted that the corporate citizen in question is not an individual, but a set of individuals whose collective decision is observed. This makes it more complex than individual ethics. However, we do observe ethical decisions that are agreed upon by a collective. We also often witness similar patterns on ethical behavior in a community, which are often referred to as social norms. It is to these issues that we now turn.

Collective Ethic and Social Norms

We have discussed in earlier chapters that any policy that would facilitate sustainable development would necessarily have to be a collective (national) decision and would reflect a particular ethical position regarding the changes that would be brought about. For example, the choice of a social discount rate would be determined by the social planner or policymaker, but it would be reflective of the choices of society. To arrive at a consensual social ethic requires constant engagement with society at large, where public debates and discussions should be used to inform the final social choice. This is more challenging than it sounds because of the plurality in individual ethics and power relationships among individuals and collectives.

Individual ethical positions can vary for a number of reasons, which lead to a heterogeneity of judgments of right and wrong, or good and bad. The first reason is that individuals are different and their own imbibed values from society and family could vary widely. The individual’s economic position, educational attainment, life experiences all contribute to the making of a particular ethic that he or she possesses. The individual’s ethical position might change over time too. The position adopted may also be quite contextual, where the individual’s assessment of the consequences of a decision or action may change. An individual may have a moral position where telling lies is unethical. Nevertheless, in a specific situation, the individual may find it acceptable to lie when the consequence is directly beneficial to him or her.

Another reason why ethical norms might differ is due to cultural differences. More often than not, culture-specific ethics often play an important role in forming our opinion of social change. While it is true that there could be a lot of common norms across cultures, such as those regarding telling lies or physically hurting people, there are also a lot of differences across cultures, particularly when it comes to issues of individual advantage versus benefits accruing to a larger group. For instance, in many Asian cultures, the family, community, and the larger groups are given due importance in the ethics of redistributing resources. Western cultures are supposedly more individualistic, and hence, the individual’s gain or loss is given a much larger weight than the concern for others. While these statements may be quite general and there are bound to be variations from this stylized version, it is important to note that there is some basis for such generalizations. Over generations, a gradual collective ethic regarding social behavior emerges in every society, which gets transformed into a social norm guiding actual practice and influencing individual ethics.

Finally, there could be noticeable differences in the ethical stance adopted by different generations of people even within the same culture. One reason for this is that the younger generation often grows up in a substantially different social environment compared to its elders. The younger generation also learns to critique the senior generation in terms of what they did right or wrong for society at large. To take an example, in many countries, the current generation accepts priced bottled water as being a fair outcome in the context of failure of public supply of adequate and safe drinking water. Yet, a few decades ago, this would have been considered to be unethical, as it was amounting to gaining private benefit from a freely available public good.

The social consensus on the ethics of trying to attain sustainable development is not easy to arrive at. Education, sensitization about the importance of nature, trying to understand other peoples’ positions, and tolerating some differences all contribute to the building of a consensus. In this context, the beginning of a social debate should focus around the crucial importance of caring about and sharing with other people. It should also harp on the importance of doing good wherever possible and refraining from doing harm.

We have discussed the difficulties in arriving at a collective ethic. It can be enormously challenging even within a small family to resolve ethical differences confronting the group. These difficulties become more and more challenging when we look at larger groups like a community or a society or a nation, as the extent of heterogeneity within these groups increase. In larger groups, what is often done to facilitate collective action is to empower a group, or even an individual (a parliament or a president of a nation), to take decisions on behalf of the larger group. When it comes to transnational collective action, the difficulties become well-nigh insurmountable.