Corporate Citizenship: The Societal Impact of Law. Gwen Alexis, Ph.D. , J.D. Associate Professor Leon Hess Business School firstname.lastname@example.org. Leadership and Ethics Track LeBow Business Professors Teaching Summit, Drexel University Philadelphia, PA - May 18, 2012.
Gwen Alexis, Ph.D. , J.D.
Leon Hess Business School
Leadership and Ethics Track
LeBow Business Professors Teaching Summit, Drexel University
Philadelphia, PA - May 18, 2012
EPA administers the Clean Air Act (CAA), but had failed to enact rules to regulate the emission of greenhouse gasses.
In April 2007, U.S. Supreme Court held that EPA has authority to regulate greenhouse gasses under the CAA. (CSAP Rule adopted under this authority.)
Twelve Coastal States, 3 Cities, and 3 NGOs sued EPA to force it to regulate carbon dioxide emissions as contributors to global warming. Indication of diminished clout of nation-state to alone establish national agenda. P’s and Amicus Briefs evidence of Transnational formation of coalitions for causes (shared values becoming a reason for “community” formation)
“Global Civil Society”
“Tragedy of the Commons”
Constraints must be placed on the use of the commons (i.e., our environment) because in the absence of constraints, self-interest is likely to lead individuals and organizations to behave in ways that will not sustain our shared resources.
Which of the following three choices is the best modus operandi for getting U.S. auto manufacturers to produce more environmentally friendly vehicles (both from the standpoint of emissions control and fuel efficiency):
INSTRUCTIONS: In accordance with your assigned group role below, prepare to argue for one of the three choices above (and against the other 2):
Group 1 - You are academics, Classical economists, descendants of Adam Smith. You will view the problem only in the abstract and talk in terms of general principles, having nothing to do with reality and everything to do with the science of economics. Remember; base your arguments only on tried and true economics, the general principles of capitalism and democratic (not autocratic) societies. The market is God; the invisible hand watches over us. You may draw on historical accounts to establish the soundness of your argument. Under no circumstances are you to allow yourself to be drawn into an argument about actual cases, real life situations, non-textbook data.
Group 2 - You are consumer advocates, descendants of John Fitzgerald Kennedy (JFK). You will argue in favor of the alternative that you, as a group, conclude will best guarantee low prices, good quality, consumer choice, AND consumer safety. Your bible is the Consumer's Magna Carta; however, you have also read Ralph Nader’s Unsafe at Any Speed. Hence, you suspect that the auto industry will only do what is good for society when forced by government, public pressure, or competitive forces (like foreign automakers stealing away customers).
Nice Summary of Issues
Negative Externalities - Side Effects or By-products of operations not included in standard cost accounting systems (not paid by for business or the consumer)
Illustrative examples of the 2 uses of NIMBY terminology:
NIMBY is the human denial of responsibility or accountability for misuse of the environment
An example of this use of NIMBY is the community that uses ever-increasing amounts of electricity but fights against having an electric power plant in its vicinity.
NIMBY also encompasses the problem of entities that cause environmental pollution being unwilling to accept responsibility for being the sources of the problem.
An example of this use of NIMBY is a company generating waste such as old motor oil, but unwilling to pay the cost of proper disposal
Perpetuation of the NIMBY mindset is facilitated by the absence of government intervention to make business pay for Negative Externalities such as air pollution.
The following statements are from the Texas "Motion to Stay":
"We have made substantial capital investments in state-of-the-art air pollution control devices. Any efforts to delay or derail CSAPR would undermine the reasonable, investment-backed expectations of Dynegy … Of course, it goes without saying that control of interstate air pollution serves important public policy objectives, including protection of human health and the environment as well as the preservation of opportunities for economic development in downwind communities.”
The “Ineluctable Elusiveness” of Profit Maximization, which “frees us from the moral tyranny of Friedman and other economists.”
“Prompter” Notes to be Handed In:
At the end of the debate on February 21, each Group is to hand in a set of “prompter” notes -- one set per group. This may be handwritten as you may think of new points that you want to add by hand as you hear various arguments made during the debate.
Question 1: Does the fact that the EPA is still tinkering with the CSAPR represent irrefutable evidence that the Court’s decision to postpone the effectiveness of CSAPR is an excellent idea? (Be prepared to state in excruciating detail why or why not.)
Question 2:(a) Should the EPA avoid adopting regulations that will potentially have a negative impact on the economy? (b) What if a costs/benefits analysis definitely shows that the economic costs in terms of loss of jobs far outweigh the benefits in terms of lowered health risks that will be reaped from adoption of particular environmental regulations -- should the EPA then just abandon the regulations? (c) Does it constitute moral bankruptcy to take economic factors such as the present perilous state of the economy into account when it is a known fact that human health is being jeopardized by environmental degradation? Consider the following in answering all parts of Question 2:
Rather than setting statewide emissions reductions and allowing the States to
determine how best to implement them, the Rule unilaterally imposes on upwind
States a federal implementation plan (“FIP”) that dictates the way States must meet
EPA’s new standards. That “FIP first” approach plainly exceeds EPA’s statutory
Authority … and upends the careful balance Congress struck between state and
federal decisionmaking. (Emphasis Added.)
Question 3: (a) Does the fact that, with the CSAPR, upwind states are being asked to decrease pollution going to downwind states justify the EPA using federal authority to “override” SIPs? In other words, can states really be relied upon to rigorously follow federal guidelines that put the onus upon them to decrease the effect of their pollution on some other state? (b) Is there anything in recent history that would justify the EPA having such blind faith in the ability of states to put their self-interest on the back burner for the betterment of mankind in general or another state in particular? (c) Is there any event in recent history or current affairs that demonstrates that such faith in state altruism would be extremely foolish on the part of the EPA? (d) In any event, do you interpret the CAA as standing for the proposition that a “FIP first” approach exceeds the EPA’s statutory authority?
N.B. All federal regulatory agencies like the EPA must follow a specific procedure in adopting new regulations. Notice of proposed regulations must be published in the Federal Register to enable citizens to comment on the pending rules prior to their adoption. The comment period varies, but from 90 days to six months is common. After the comment period has expired, the agency publishes the final rule in the Federal Register and it must address any concerns raised by the public during the comment period, stating with specificity how the public’s concerns were dealt with.
Question 4: Does the existence of this public comment period sufficiently address the concerns being expressed by EME Homer City in its Motion? (Be prepared to state in great detail why or why not.)