Friday, April 22, 2016

Insights on Earth Day from Top MBA Colleges in Delhi NCR: The Economics of Global Climate Change

The top MBA Colleges in Delhi NCR are business schools with a difference. While it may be fashionable for MBA students to aim for placements, CEOs to aim for ESOPs and corporations to aim for shareholder value maximization and for business school academicians to engage in academic research, the authentic truth is that the habitat that shelters each of these stakeholder groups has been at the receiving end of things. On April22, 2016 Ishan Institute of Management & Technology takes a deep insightful look at the economics of climate change and the rationale behind this negligence of gargantuan proportions. On Earth Day the academicians, staff and students of the first business school of Greater Noida come together to present you this insight on the economics of global climate change.

The Free Rider Problem, Tragedy of Commons and Treating Environment as a Waste Sink

A vast majority of the literature available on the issue of environmental management and environmental economics is driven by the exclusive focus on private goods and invisible hand of the market. It makes enormous great sense to suggest that the environment on local, national and even the global levels falls into the domain of public goods and therefore cannot be streamlined by relying on the invisible hand of the market unless it is strengthened by the visible hand of the government. Public finance as an academic discipline is rarely ever taught or discussed by business schools. Most MBA Colleges in the world and India do not integrate this paper into the academic curriculum and academicians of the highest stature who have the intellectual capabilities to break open the shackles leave much to be desired in terms of serious academic efforts to bring the subject into mainstream business education. It is worthwhile to recall the famous essay of the legendary MIT academician Naom Chomsky –“The Responsibility of Intellectuals” and thus seriously demand an explanation from academicians of business schools on the colossal torpidity shown by them on something as important as climate change.
Coming back to the core issue of environment and its stature as a public good, we bring into focus the properties of public goods. These are as follows:
·        Non-rivalry
·        Non-excludability

  These two characteristics features are applicable to the global environment. Being characterized by non-rivalry implies that the consumption of the environment by few does not leave any less of it for consumption by other consumers. Being characterized by non-exclusivity implies that consumers who do not pay the price in lieu of consumption cannot be stopped from consumption. These two properties combine to give rise to the free rider problem and the tragedy of commonsIn the context of welfare economics these two phenomena can be viewed as negative externalities that motivate business leaders, corporations, micro, small and medium enterprises and governments to dump pollutants into the environment without having to bother about paying the price. Of course this issue has been tackled by some governments in the form of imposition of carbon credits and mandatory disclosure of carbon emissions, water negativity and other forms of quantitative reporting in social audit reports. Some corporations have also embraced green accounting. The truth is that micro, small and medium enterprises that are the lesser mortals in the world of climate change bear the brunt of these government policies and bleed financially while the big fish are just too big to be caught in the net of regulators.

     Corporate Actions and International Inactions: Data on the Robber Barons and Knights in Shining Armour

    A research done by the Climate Accountability Institute shows conclusive evidence that half of the quantum of carbon emissions have taken place in the last 25 years and that more than 2/3rd of the same has been a direct outcome of the carbon emissions by just 90 companies worldwide. According to the leading English daily from United Kingdom, The Guardian this list of 90 companies includes 50 investor owned companies, 31 of them being public sector companies from Saudi Arabia, Russia and Norway. There are 9 government-run industries producing coal in countries like China, the former Soviet Union, North Korea and Poland. There are also comments coming from Harvard academia like Prof. Naomi Oreskes, who assert that Mexico, Venezuela and other Latin American countries that are not uttered and hence get the benefits of doubt. Contrary to this statement, one is baffled at the silence of these esteemed institutions on the fact that Mexico, Venezuela and a host of other Latin American and African nations were enslaved and colonized by west European nations for mining and resource expropriation as suggested in the documentary The End of Poverty featuring economists Joseph Stiglitz, Amartya Sen and Raghuram Rajan. The consequence is that the robber barons play knights in shining armour while deploring the emerging economies.

     International Community and Climate Change

   All has not been lost and the paradise can be regained. Given that there has been international action on deliberations at the highest level within the framework of the United Nations Climate Change Conference suggests that there is light at the end of the tunnel. The sad part is that despite the existence of evidence and empirical data on corporate actions and colonial regimes of governments, there is no consensus on achieving inter-temporal equilibrium with regard to climate change. Despite the fact that most top MBA Colleges, business schools, governments, corporations and business leaders knowing the history of science and the inverted U-Hypothesis of Simon Kuznets, there is a lack of organizational will to turn the clock back and set the record straight. Here is the complete list of meetings that have taken place under the auspices of the United Nations Climate Change Conference.

     What Have We Done as a Top MBA College in Delhi NCR?

    At Ishan Institute of Management & Technology, we have undertaken efforts to be a part of the climate change campaign in letter and spirit. As an MBA College in Greater Noida, we have included 3 case studies into the academic curriculum of the paper of strategic management and discussed the solutions to the cases on climate change and social audit report preparation. We have integrated 2 case studies on free rider problem and tragedy of commons in the paper of business environment. We have also streamlined and added 3 case studies on carbon emissions in the paper of business ethics and corporate governance. Beside this Ishan Institute of Management & Technology hosted the first Global Value and Ethics Convention that saw participation from150 delegates from more than 25 countries in the year 2014. As an education enterprise of the 21st century we have made disciplined efforts towards reducing the usage of plastics and non-recyclable materials, reusing stationary items and recycling processes for higher energy efficiency and a lower carbon footprint. We have also taken up the cause of animal activism and expressed our support for the ethical treatment of animals.

   On a concluding note, as a top MBA College in Delhi NCR and the first graduate business school of Greater Noida, we would like to acknowledge the efforts of our students Himanshu Gurjar (Department of Arhcitecture), Sagar Singh Solanki and Bhim Prakash (Department of Management), Mansi Verma, Praveen Kashyap and Aril Wadia (Department of Commerce) for contributing their collage collections themed on climate change in Delhi NCR during Kshitiz 2016-the annual fest of Ishan.