Case: Exporting Pollution As an assistant to the vice president of environmental
ID: 399080 • Letter: C
Question
Case: Exporting Pollution As an assistant to the vice president of environmental affairs at Americhem, Rebecca Wright relished the opportunity to apply her training in public policy analysis to the complex and emotion-laden issues that her company faces.39 Rebecca was convinced that cost–benefit analysis, her specialty, provides a rational decision-making tool that cuts through personal feelings and lays bare the hard economic realities. Still, she was startled by the draft of a memo that her boss, Jim Donnelly, shared with her. The logic of Jim’s argument seemed impeccable, but the conclusions were troubling—and Rebecca was sure that the document would create a furor if it were ever made public. Jim was preparing the memo for an upcoming decision on the location for a new chemical plant. The main problem was that atmospheric pollutants from the plant, although mostly harmless, would produce a persistent haze, and one of the particles that would be released into the atmosphere is also known to cause liver cancer in a very small portion of the people exposed. Sitting down at her desk to write a response, Rebecca read again the section of the memo that she had circled with her pen. From an environmental point of view, the case for locating the new plant in a Third World country is overwhelming. These reasons are especially compelling in my estimation:
1. The harm of pollution, and hence its cost, increases in proportion to the amount of already existing pollution. Adding pollutants to a highly polluted environment does more harm than the same amount added to a relatively unpolluted environment. For this reason, much of the Third World is not efficiently utilized as a depository of industrial wastes, and only the high cost of transporting wastes prevents a more efficient utilization of this resource.
2. The cost of health-impairing pollution is a function of the forgone earnings of those who are disabled or who die as a result. The cost of pollution will be least, therefore, in the country with the lowest wages. Any transfer of pollution from a high-wage, First World country to a low-wage, Third World country will produce a net benefit.
3. The risk of liver cancer from this plant’s emissions has been estimated at one-in-a-million in the United States, and the resulting cancer deaths would occur mostly among the elderly. The risk posed by the new plant will obviously be much less in a country where people die young from other causes and where few will live long enough to incur liver cancer from any source. Overall, the people of any Third World country might prefer the jobs that our plant will provide if the only drawback is a form of cancer that they are very unlikely to incur.
4. The cost of visibility-impairing pollution will be greater in a country where people are willing to spend more for good visibility. The demand for clear skies— which affects the aesthetics of the environment and not people’s health—has very high-income elasticity, and so the wealthy will pay more than the poor to live away from factory smoke, for example. Because the cost of anything is determined by how much people are willing to pay in a market, the cost of visibilityimpairing pollution in a First World country will be higher than the same amount of pollution in a Third World country. Thus, people in the United States might prefer clear skies over the benefits of our plant, but people elsewhere might choose differently.
Boatright, John R; Smith, Jeffery D.. Ethics and the Conduct of Business (Page 61). Pearson Education. Kindle Edition.
Q: In the case “Exporting Pollution,” what points could be considered morally objectionable? Please explain. In addition, please explain how cost-benefit analysis COULD be acceptable in this case.
Explanation / Answer
Answer:1.It is mentioned in the case that risk posed by the new plant will obviously be much less in a country where people die young from other causes and where few will live long enough to incur liver cancer from any source. Overall, the people of any Third World country might prefer the jobs that our plant will provide if the only drawback is a form of cancer.This point could be considered morally objectionable on humanitarian ground.Because if people of third world country are poor and need job more than anything it doesn't mean that they don't deserve the clean air to breath and clear sky.
2.Other point is that if they export pollution to LDC's, It will ultimately increase the global pollution.As we know that Developed countries have every kind of resources and capacity so that they can enforce pollution controls but on the other hand LDC's does not have enough resources and administrative capacity to control the pollution, so, they cannot enforce pollution controls easily. as we know consequences of pollution are not limited to one region but these are global.So, finally they choose LDC's to locate anew plant, the consequences of this decision will not be good.
3.Even if the people in LDC's might prefer jobs that plant will provide them and they might be happy happy and feel that shift pollution to their country is a fair compensation, then also this decision is not justifiable.In this case if both parties are rational and well-informed But Developed country can not exploit the LDC's people. So, it will be injustice for them to set a plant and export pollutants in LDC's, The benefits of these industries cannot compensate for the harmful consequences due to pollution.
Cost -Benefit analysis could not be acceptable in this case:
As we have mentioned above that if the pollution is being exported to LDC's it will lead to increase the global pollution.so it proves that the consequences of pollution will not only affect the LDC but also affect globally.so, net benefits of dumping pollution to LDC is not appropriately justified.do not go through. We can say that if the whole world will bear the consequences of this exchange (effects of pollution) and (economic benefits that LDC is going to receive in return) .so, this exchange has no benefits socially.thats why cost -benefit in this case is not acceptable.
In this case, they did not consider the cost -benefit analysis in terms of degree of exploitation/ injustice and degree of welfare. Before this decision the true cost-benefit analysis will be done if they consider how big are the welfare benefits and how much injustice it will lead to.
In this case we case see that economic benefits that developed countries is going to get with this decision is greater than the economic costs of the consequences of pollution that LDC is going to face. But it will not lead to increase human well-being.
so, economic costs and benefits is not reliable and acceptable guide to understand what will be harmful and what will be beneficial. morally we can raise a question on this costs and benefits analysis.