System Thinking in Sustainable Management - Essay Example

Introduction Sustainability carries two perspectives, either a set of goals or practices and behaviours that support the goals. As a set of targets, sustainability is a description of desired environmental conditions and the direct or indirect benefit to human beings. As a practice and behaviour sustainability are actions that enhance and support the well-being of persons through environmental interactions. The importance of sustainability lies in its future impact of actions and decisions made today. Sound decisions will prevent dire consequences in future. The future depends on sustainability activities and actions. A sustainable future depends on fossil fuel depletion, increasing the cost of water and energy and lastly climate change due to carbon emissions. Fossil fuels are Non- renewable and the growth in demand for the product will lead to depletion. Countries as India and China are increasing their industries; this means that global demand for fossil fuels will increase; this is accompanied by an increase in carbon emissions. The prices of energy and fresh water are similarly increasing. The increase in prices puts burden on economies and middle-income households. A move towards sustainability is critical for future survival. It is important to design approaches that minimize the negative impact on environments. Increasing sustainability will save the environment in addition to reducing the economic impact of plummeting energy prices. This paper looks at systems thinking in developing solutions to sustainability challenges and uses placing a price on carbon as the wicked problem. The paper approaches the topic by analysing system thinking, its relationship to sustainable management, looks at the future of sustainability, analyses the wicked problem, looks at approaches and difficulty associated with pricing carbon. Systems Thinking A systems thinking approach applies in the context of economic, social, business and environment. The changing business environment brings the need to use system thinking in solving and coming up with operational decisions. It is challenging to attach a price to carbon, however, the method assumes formulation of economic policies for business and governments. A new concept in sustainable management, the system-thinking approach needs further research (Irawan and McIntyre-Mills 2014). The critical state in the social, economic, and environmental system is due to increasing rapidity, complexity and uncertainty a transdisciplinary systems thinking framework is essential in seeing interrelationship and patterns. System thinking approaches situations by relating to its pattern and behaviour, its sees beyond the details that embed a relationship; a critical approach to addressing sustainability. However, despite its usefulness in solving problems the systems face some criticism (Lewis 2013). Systems thinking is fundamental as it emphasizes a technocratic view of business problems. The major factors transcending climate policy and environmental policy are political responses in different countries, since most propose a market based approach. Iceberg model in addressing sustainability Iceberg model is an important system of thinking and understanding the importance of attaching a price to carbon. The model has four levels. The event level deals with the typical perception of the world. Problems at this level are addressed by simple readjustments. The model implies that not all issues can be addressed by treating its symptoms (Martin 2015). On the other hand, the pattern level argues that events take place over time, by observing patterns, it is easy to forecast and forestall events more so when dealing with sustainability. By estimating occurrences of phenomenon and disasters governments are in a better position to plan adequately if they are to remain sustainable. The structure level of the iceberg model argues that structure causes pattern, structure can be physical things, policies, organizations, or rituals. Thus if an emphasis is put on determining pricing of carbon, pollution won’t happen from time to time. Thus, a catastrophe will be prevented in the process Additionally, the Mental model level brings about the beliefs, morals and expectations that drive a structure. They are leant subconsciously in the society, thus with a collective measure and social responsibility carbon could be regulated to avoid the endangerment of the universe. However, in most cases individual needs overcome sustainability concept as this model advocates. System thinking in sustainable management Pricing carbon will impact different economies, proposal for policies receive a lot of opposition in current difficult economic situations. Coming up with solutions and facing the environment requires a systematic approach to aligning behaviour and thought with natural laws of sustainability (Gregory and Miller 2014). A critical system enables practitioners to conceptualize and take actions towards the integrating environment, social, and economic dimensions of sustainability, it supports the community in addressing challenges and improving ecosystems. Compared to other approaches, the systems-thinking approach helps in leveraging management complexity (Moldavska and Welo 2015). Sustainability challenges are dynamic as this makes the development of effective mental models important in supporting the transition to sustainability. Mental models affect human understanding and influence actions they take. The Three Pillars model of Sustainability The three pillars are powerful at proving the importance of attaching a price to carbon. The model consists of social economic and environmental pillars. The system works as a whole and any weakness in one of the pillars renders the system unsustainable (Nguyen and Bosch 2012). Under the social pillar, it focuses on the ability of a system or organization to function according to social wellbeing expectations and harmony. Factors as endemic poverty, war and injustices are signs that that a system is socially unsustainable (Faezipour and Ferreira, 2011). Similarly, the environmental pillar emphasizes on the ability of an environment to support a given level of quality and balance of natural resources. The environmental pillar aspect is the major problem affecting countries in regards to systems thinking on sustainability. The consequences of not solving environmental issues are delayed and receive low priority when it comes to solving it. Thus, carbon pricing and taxing needs to be given priorities if governments are to save the planet from extermination. The economic pillar also focuses on the ability of an economy to sustain a defined level of production. Indefinite support of economic production is the world’s biggest nightmare and compromises the progress of environmental sustainability (Nguyen et al. 2011). The major problem affecting pricing of carbon is information that will lead to correct pricing. Futuristic perspective Despite the challenge associated with carbon pricing, it is important to develop adaptive and resilient decision-making tools that easily cope with uncertainty or risks. The future approach entails acknowledging our current position and projecting trends in near future. However, many trends are unsustainable, alternatively backcasting that takes 20 to 30 years’ perspective becomes a better approach. Businesses needs to think imaginatively about their operations and come up with a range of fundamental approaches that fit with future sustainability framework (Porter 2008). When it approaches to issues concerning sustainability, it is critical to differentiate between backcasting and forecasting. Forecasting offers, short-term solutions whereas backcasting takes into account anticipated destination and comes up with a model to achieve it (Banson, Nguyen and Bosch 2015). Governments formulates strategies like carbon pricing as a measure that will encourage households and companies to reduce the rate of carbon emissions. It increases the use of clean energy and adoption of green practices. The carbon tax is fees attached to greenhouse gas pollution from burning fossil fuels. Reduction in carbon emission needs to start with reduction of carbon fuels that industrial processes consume. An environment is a system and understanding the connection between many variables in the system aid decisions that will guarantee a sustainable future (Smith 2010). A holistic view looks at variables and their essence for the survival of others. A Systems thinking approach emphasizes on integrative decisions as it focuses on a system and it relation with other systems. Due to globalization, it is a dominant approach that is reducing problems related to energy, water, and housing (Martin 2008). The success of Australia in carbon pricing is exaggerated and this will replicate problems in Europe. Importance of placing a price on carbon It is common to come across this phrase put a price in carbon in government and corporate discussions. Business groups and financial institutions like World Bank are advocating for companies and stakeholders to support the carbon pricing as a measure aimed at reducing emissions and driving the adoption of clear sources of energy (Tejeda and Ferreira 2014). The global approach towards assigning a price to carbon emission represents a shift in the economics of climate trends. Businesses needs to focus their operations to ongoing climate changes since the cost of restructuring the environment in unbearable. The damage to atmosphere equates to the neglect of personal belongings. Although countries can use different avenues to attach a cost to carbon, the result is equal (Uphoff 2014). Countries need to capture external cost due to carbon emissions; this includes health care cost, crops damage costs, and drought-related expenses and loss of property due to flooding. After which they can now tie them to their source by fixing a price on carbon. Australia became the first counrty to appeal pricing of green house gas emissions. Attaching a price on carbon shifts back, the burden associated with carbon emissions to the source. Reduction of pollution cannot take place by incorporating hard rule or regulations; however, the price attached to carbon is an economic signal that triggers approach to minimize emissions from companies by stakeholders. Businesess reacts to changes in profit margins, and they react by reducing operational cost(Van Dyk and Pretorius 2014). By the end of the day, the result of assigning a cost on carbon is that the overall environmental goal comes to play. Methods of Pricing Carbon The price attached to carbon brings out the self-drive to reduce pollution, stop pollution or pay for pollution. The aspect of pricing does not dictate against any party since they are at liberty to pay, stop, or minimize emissions. The main forms of carbon pricing are carbon taxes and emission trading systems (ETS). The ETS method also called “cap and trade system” caps the levels of greenhouse gasses and allows industries with low levels of emissions to sell extras allowances to large emitters. The creation of demand and supply for emission allowances establishes a market price for carbon emissions (Martin 2008). The cap ensures reductions in emissions takes place while keeping emitters within an allocated carbon budget. Likewise, a carbon tax sets prices on carbon through the definition of tax rates on greenhouse gasses or fossil fuels carbon content. The variance between a carbon tax and ETS is emission reduction outcome is not predefined, but the price is defined. The choice of price on carbon depends on individual country policies regarding pollution and their economic aspects. Other indirect ways to price carbon are fuel tax, removal of fossil fuel subsidies, and regulations that incorporate social cost of coal (Porter 2008). Emission reduction is another way to price greenhouse gas emission. Also, private entities are in a position to purchase emission reductions to compensate for their emissions or support mitigation activities (Banson, Nguyen and Bosch 2015). According to The Egan Review a country like England, that runs a carbon emission trading system that obliges businesses to cut carbon footprint by paying permits for excess emissions. Likewise, US oil companies boosted production of natural gas to counter coal that was the twice amount of carbon that gas produces. Attaining sustainability To achieve sustainability objectives, an analytical understanding of systems is important. Systems enable the understanding of occurrence in the world. Events trigger the interest of how to control and change occurrences. The focus on events brings about short-term solutions. However, this solution might not bring desired required impact on the environment. Canada is a fossil fuel reliant economy; in 2011 the country withdrew from Kyoto protocol. The country views climate change as common world problems. Events arise due to given patterns that change events over time. Patterns arise from system structure and interconnection of systems. According to Martin, realizing structure leverages answer on the creation of a better environment and a sustainable future (Irawan and McIntyre-Mills 2014). The global focus on carbon pricing is commendable; it demonstrates business and economic realities that take place in an attempt to attain a low carbon economy. Despite the energy and climate policy, many businesses find it hard to restructure their operations for minimal carbon emissions. The adoption of price on carbon is a direct and obvious way to force the industry to adopt carbon emission in their budgets and cultivate the art in customer purchase. Many countries cannot accept carbon pricing due to myths that it will result to high-energy bills and crippled economies. The survival of humanity depends on a lot on the development of systems thinking. Learning about these systems in addition to living with it is cumbersome. The system thinking becomes realistic when viewed from above; it is challenging to find processes and tools that aids in understanding complexity, come up with better policies and guide organization and societies towards sustainable development. The implementation of a systems thinking approach leads to the view on carbon pricing as part of sustainability rather than emission alone (Gregory and Miller 2014). The focus is cyclical rather than linear cause-effect approaches that human finds easier and more intuitive. Understanding environment components and their interactions enable influence of environment behaviour and come up with policies that lead to desired outcomes. Successful implementation of sustainability through systems thinking approach will change the view of the complex world resulting in a sustainable earth. European Union reduced emissions by 3% since they put a price on carbon. Conclusion Human beings are known to emphasize their needs over needs of other species; this makes it hard for them to price carbon. However, People cannot fully understand their requirements, they have a greater dependency on their surrounding environment, and this makes it essential to ensure the resources are sustainable. For sustainability to happen, it is important to get a clear understanding of system dynamics that play in the environment. Pricing carbon is a challenge for many industries; it requires critical thinking mental models that support sustainability transition. The ability to come up with efficient models depends on the approaches to thinking. A deficiency in thinking is common in leaders, private sector leaders, and the general population. A set of skills technologies and visual language increases the ability to learn systems thinking. Educational initiatives need to get underway to ensure the development of sustainable systems and implementation of sustainability in business operations. From the discussion, it is clear that systems thinking improves sustainability in businesses. Wicked problems due to sustainability in conjunction with complex system feedback and dynamics bring a clear insight into the complex issue of sustainability leading to better planning to ensure sustainable future. Bibliography Banson, K., Nguyen, N. and Bosch, O. 2015. A systems thinking approach: 'the greater push model' for growth and sustainability in Africa - evidence from Ghana. IJMABS, 14, p.289. Faezipour, M. and Ferreira, S. 2011. Applying systems thinking to assess sustainability in healthcare system of systems. International Journal of System of Systems Engineering, 24, p.290. Gregory, A. and Miller, S. 2014. 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