Environmental and ethical issues
External costs and benefits
- external costs are paid by others/society, not the business — pollution, noise, traffic.
- external benefits are gains for others — new jobs, better roads.
- Sustainable development meets today's needs without harming future generations.
Practice
An external cost of a factory is:
External costs fall on others/society (pollution, noise), not on the business itself.
Practice
Sustainable development means meeting today's needs without:
Sustainability balances current needs against the needs of future generations.
Pressure groups and ethics
- A pressure group tries to influence businesses (e.g. to cut pollution) using the media, protests and boycotts.
- Ethical behaviour = doing what is morally right (fair pay, safe products, no child labour) even when no law forces it.
- Ethics can cost more short-term (a conflict with profit) but win loyal customers long-term.
Practice
Acting ethically can cost more in the short term but win loyal customers in the long term.
Ethical choices (fair pay, safe products) may raise costs now but build a good reputation that boosts profit later.
You've got it
Key idea
- external costs (pollution) hit others; external benefits (jobs) help others
- sustainable development = meet today's needs without harming the future
- pressure groups push for change; ethical behaviour may cost more but builds loyalty