Globalization and Global Warming - Essay Example

? How Globalization has strengthened the Hands of Businesses over Industries in Developing Nations to the Failure of Environmental Policies on GlobalWarming Name Professor Institution Class Date Submitted How Globalization has strengthened the Hands of Businesses over Industries in Developing Nations to the Failure of Environmental Policies on Global Warming In the past century, business undertakings have taken a global perspective. Unlike the ages before when business activities of particular enterprises and corporations took place within the confines of specific economic boundaries, commerce has taken a complete net turn. Globalization has set in and there is a worldwide movement towards financial, economic, communication and trade integration. There is a universal opening of local and nationalistic outlooks to broader perspectives of an interdependent and interconnected world. This has enabled free transfer of goods, capital and services across all national frontiers. Despite the immense advantages that globalization of business operations across the world has caused, there are a number of negative externalities if exercised indiscriminately. Other than having worrying impacts on economic development of some economies, globalization has created implicit, negative pressure on environmental sustainability. This work looks at the intricate relationship that globalization has in strengthening the hands of businesses over industries in developing nations to the failure of environmental policies to keep up with the challenges of global warming. Due to globalization, small firms in the developing world have broken free from the bounds of industries they fall under in their countries of origin. The neo-liberal idealism that business premises have embraced since its proposal by classical liberals like David Ricardo and Adam Smith has changed the business perspectives both in the developed and developing economies in a mega way. Since the 18th Century, long before the current state of globalization of economy, neo-liberal ideal has created a self-regulating market (Sliwa, et al., 2000). The difference between the times in the 18th Century and the 21st century is that the degree of embracing neo liberal economy by enterprise and individuals. The laissez faire markets that have been created by the aspect of economic globalization has created freelance of firms. The extent to which the industry has control over the activities of businesses under it is curtailed and limited. In the long run, there are challenges in regulation and implementation of policies intended to create sanity in the businesses’ operations. Before globalization took root to the extent it has presently, industries acted the same position monarchs performed in the earliest economic developments. Industries have for a long time presided over the mercantilism duty of monarchs who exercised close to complete control over the earliest economies. Whereas monarchs did this control of economies and all governance factors by amassing large quantities of gold for bellicose purposes, industries perform market regulation by instituting and implementing laws and regulations. The regulations and legal guidelines are geared towards keeping the firms operating in a particular industry in check. In the contemporary world, there is greater need for businesses to portray responsibility in the face of numerous environmental challenges. Developing countries have suffered most due to cases of global warming although they have contributed the least in creating the global menace. Economic growth in developing countries has incessantly become faster and the amounts of emissions make it necessary for the nations to strategize on the means of reducing emission of greenhouse gases. Using the current projections, the developing countries will contribute to over half of the greenhouse gases produced in the world if not controlled (Bergita, 2012). Despite the bleak projections, the developing countries have several strategic alternatives where benefits outweigh costs. These include use of energy sources that are efficient, promoting the use of renewable energy, adoption of measures on air quality and recovering methane from sources such as waste. The strategies of developing countries to reduce emission of green house gases by 2020 in absolute terms relies on the cooperation of individual firms with their respective industries. Many countries in the developing world are already making great strides in reducing the greenhouse gases emitted. This has been possible through institutionalization and implementation of policies addressing economy, local and global environmental concerns and security. Industries in the developing countries have elements that should be part of the process to set up actions for reducing global warming. The policies that industries can formulate and implement in all the firms concerned include expanding ad streamlining the clean development mechanism as expressed in the Kyoto Protocol to cover all national sectors (Harvey, 1998). In addition, industries can improve access to finance through a combination of mechanisms available in order for developing countries to build facilities that generate the cleanest energy sources possible. Furthermore, industries in the developing world have the capacity to introduce emission-trading schemes for various industrial sectors with sufficient capacity to monitor greenhouse gas emissions. Additionally, developing countries that develop to the state of “developed nations” should make quantified and appropriate commitments to ensure environmental conservation. Further, industries in the developing nations need to be engaged in international agreements that address issues of further researches and technological advancements to save the environment from global warming. Collaboration between individual firms and the industry is limited given the influence of globalization. With globalization, all firms are part of global industry. Firms that are part of the global market are free to interact with all corporations in the world (Bergita, 2012). Globalization has created a free market scenario. Trade blocs and market segmentations play little role in discerning the extent of a firm’s market. Likewise, industries under which firms fall have little influence on the boundaries of firms’ actions. In the event where the industry has little influence in controlling the operations of firms under its jurisdiction, it equally exercises little influence in determining how much the firms adhere to regulations and policies it formulates. Globalization has, therefore, reduced the rates at which industries have the enterprises under them implement the policies and environmental regulations. In the words of Barack Obama, solving the challenges of global warming has flopped due to failure of people and organizations to make hard choices. Humanity has failed to prepare itself for the new age (Sliwa, et al., 2000). In the face of globalization, many firms have welcomed the prospect of economic globalization half-heartedly. They reap the benefits that come with globalization, but are not ready to take responsibility for the quandaries that face the globe. Like people, individual firms are akin to isolated individuals whose actions mostly reflect their self-interests. The relationship between individual firms and industries is like the relationship between economic matters and political issues. In Smith’s view, economic and political matters are highly separable. Economic matters claim superior status since it can operate without interference of the government under natural law (Bergita, 2012). The state is to refrain from interfering with economic activities of its self-interested citizens and use its power to guarantee open economic exchange. Likewise, firms claim superior status over industries since they can operate without the interference of industries in the globalized world. In a globalized economy, a firm has access to production materials from all over the globe (Europe Legislation, 2012). Globalization has created a win-win situation for all trading partners involved. The prospect of industries in the developing countries pinning down firms to perform global warming regulatory practices has not been easy given the industries’ inability to provide reasons against global partnerships that overlook their importance. For instance, if Kenya produces coffee more cheaply than India, and India produces textile more cheaply than Kenya, the two countries can specialize in the production of the products they produce cheaply. This leads to comparative advantage. Firms in textile industry in Kenya are more likely to be controlled by market forces affecting Indian market than the textile industry in Kenya. Similarly, the market forces in the Kenyan coffee industry more probably influence firms in the coffee production industry in India than the coffee industry in India. Comparative advantage is evidently a source of struggle between firms and industry in their efforts to create environmental sustainability. The industry may formulate policies that control the modes of production or ban certain kinds of raw materials for the benefit of the environment. If the industry lacks the full grip of the firms under its jurisdiction, its effort to use the policies and regulations become futile. It is left helpless and insufficient to take formidable actions against individual firms that refuse to adhere to the set laws. Even if the industry decides to shut down a firm that refuses to stick to such environmental conservation rules, it becomes hard to ensure lasting regulatory stance against firms that remain in operation. Neo liberalism that has affected the way industries and firms relate rose into economic prominence in 1980s (Sliwa, et al., 2000). The paradigm is built upon classical liberal idealism of self-regulating market and comes in different variations and strands. The best way to perceive neo liberalism is to view it in three perspectives; mode of governance, as an ideology and as a policy package. Ideologically, neo liberalization gives firms and industries in the developing world patterns of belief and shared ideas that are accepted as truth by a majority of significant groups within a particular economic field. These ideologies have served as indispensable maps as they guide the firms and industries through the complexities of global economic world (Sliwa, et al., 2000). Further, the ideologies offer the firms and industries the coherent pictures of the economic world both as it is and as it ought to be. Ideologies of neo liberalization help industries and the firms under them in the developing world to organize the core ideas of global environmental policies into simple truths and claims that aid them to act in particular ways towards environmental sustain ability. The second dimension of neo liberalization is what Michael Foucoult refers to as “governmentalities” (Harvey, 1998). It offers industries with a set of premises, logistics and power relations upon which to base its governance of the firms under it. Neo-liberal governantality has its foundation on entrepreneurial values such as decentralization, self-interest and competitiveness. This dimension gives industries a leeway to exercise some power of regulation on firms by laying emphases on devolving central industry power to smaller localized units. By so doing, the industry induces a self-regulating free market (Harvey, 1998). It is, thus able to exercise powers on the firms and ensure the firms adhere to the policies concerning environmental conservation despite the effects of globalization and neo liberalization. Instead of the traditional bureaucratic mentalities of most industries, proper management of firms in the globalized, free markets calls for a paradigm mind shift to entrepreneurial identities. Firms that are more inclined to reaping off comparative advantages are more likely to understand the need for environmental conservation through encouragement of safer entrepreneurship than bureaucratic environmental regulations by the industry (Bergita, 2012). This transforms industry managements into self-interested actors that are responsible to the market and that contribute to the monetary success of slimmed-down industry structures. Events that preceded the formation of a worldwide market for any product tradable define the contemporary position of global warming and other environmental challenges in the developing countries. Trade Organizations such as the World Trade Organization (WTO) concentrates its efforts on liberalizing trade (Sliwa, et al., 2000). Trade liberalization by the World Trade Organization is the organization’s driven force irrespective of the economic status of the countries involved in the trade. It believes that trade between rich nations and poor countries may lead the developing states to develop and accelerated pace. However, empirical data show that free trade does not necessarily lead to economic growth. In particular, there is an argument by critics of the World Trade Organization that free trade has not benefitted developing countries. An example cited for this claim is the case of maize trade in Mexico and America (Bergita, 2012). The price paid per kilo to Mexican farmers had to be halved when the country opened its doors to cheap maize imports from the United States. The more Mexico opens its doors to imports from America, the more the American government keeps subsidizing its agricultural processes (Bergita, 2012). Mexican administration lacks the resources to subsidize production to its citizens as much as the United States. Its farmers, therefore, keep languishing in poverty with half prices paid due to American invasion of the market. Whereas economic growth is desired by all nations, it might not be necessarily the best option for all nations. Some nations are better off without the much sought-after economic growth given the environments in which they derive their livelihoods. Improving economic standing of any country requires that the nation utilizes its natural resources in a bid to increase its Gross Domestic Product (GDP) (Europe Legislation, 2012). Resulting depletion of resources leads to destruction of natural habitats of species, global warming and increasing levels of environmental pollution. It is, therefore, imperative that governments, industries and firms work together in discerning the net benefit of depleting some natural resources. It is significant that stakeholders in the developing countries stay focused to realize a global goal of carbon dioxide level of not more than 450 parts per million. With a proper cooperation between the firms and industries, there is an assurance that there can be a limit to global average temperature level of 2 degrees Celsius compared with the temperatures of pre-industrial times (Europe Legislation, 2012). These targets cannot be met unless measures are put in place to curb firms and keep them answerable to the industries they operate under in their countries of operation. Bibliography Bergita, Leonardo. 2012. What's "Neo" about Liberalism? New York : PrenticeHall, 2012. Europe Legislation. 2012. Strategy on climate change for 2020 and beyond. [Online] Dec 3, 2012. [Cited: Dec 5, 2013.] europa.eu/legislation_summaries/energy/european_energy_policy/l28188_en.htm. Harvey, David. 1998. A Brief History of Globalization. Chicago : Sage, 1998. Sliwa, Martyna and Caersn, George. 2000. International Business. Chicago : Sage, 2000. Read More