. "Environmental Constraints and the Evolution of the Private Firm." The Industrial Green Game: Implications for Environmental Design and Management. Washington, DC: The National Academies Press, 1997.
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The Industrial Green Game: Implications for Environmental Design and Management
environmental impacts, and their sources; possibly properly designed product take-back and producer-responsibility requirements; and price adjustments to internalize externalities. In a broader sense, we need much more information and knowledge to do this. For example, it is arguable, if not apparent, that complex systems such as the economy tend to self-organize and exhibit distributed, not centralized, control, feedback, and internal regulatory systems (Allenby and Cooper, 1994). How can such distributed self-organizational behavior be stimulated, given that price structures, which might perform such a function, are unlikely to include all relevant environmental externalities for the foreseeable future? How can we get there as a practical matter, when most existing environmental regulation, at least in the United States, is predicated on precisely the opposite assumption—the need for specific, mandated, central micromanagement of all behavior bearing on the environment?
The details are daunting, but we may come under more stringent selective pressures than we expect or desire as environmental perturbations become manifest, which may result in far more rapid change than we anticipate. Nonetheless, it seems at least defensible that it is desirable to maintain the current fundamental structure of private corporations while not interfering in the adjustments they are already making (as discussed above) and placing far greater emphasis on understanding industrial ecosystems so as to be able to define and implement appropriate public policy. Such policy, in turn, may be defined as the development and implementation of boundary conditions that create selective pressures, by acting upon private corporations, for the evolution of technologies that support the achievement of sustainability.
If this is the case, we have reached an important understanding. Corporations may indeed be evolving in response to changes in the boundary conditions affecting them. The changes result from increased anthropogenic environmental perturbations and concomitant regulatory developments. We should not expect otherwise. However, private firms should not be fundamentally redefined and, to the extent public policies have created trends to do so, must be carefully evaluated and monitored. Meanwhile, the public policy challenge lies not in traditional environmental regulation or increasingly stringent end-of-pipe regulation, but in the establishment of boundary conditions that encourage private firms and the economy as a whole to self-organize in a sustainable structure.
The terms "corporation" and "firm" as used in this paper refer to private, for-profit entities established under various state and national general incorporation statutes, as opposed to non-profit organizations and governmental entities.
There is a large literature on whether corporations should be redefined to include public-interest factors explicitly among their goals or whether they are assuming responsibilities—such as the provision of health care and support for older citizens or the conduct of international trade and control of global financial structures—formerly provided directly or indirectly by the nation-