Paradoxes of Corporate Sustainability.

Julio F. Campos

Corporations are based on three pillars when presenting their solutions aiming at achieving sustainability:

• Increase efficiency and use of new technologies;
• Recycling of waste for reuse and;
• Change in the production process for the use of renewable and clean sources.

Although corporations depend on these approaches to maintain their financial health in the face of an increasing demand for sustainability, we will see that from the environmental and social point of view, these solutions can often be mere palliatives and can not be sustainable if there is, in fact, no reduction in exploitation resources.

Increase Efficiency Paradox

William Stanley Jevons, in 1865, as postulated in "The Question of Coal," observed that as less coal was used to produce a single product, due to the increase in the efficiency of its use, the surplus coal allowed the expansion the production of that particular product, or other products, with lower production costs. As postulated:

"Whatever the action that may lead to increased coal efficiency and lowering the cost of its use, it directly tends to increase the value of the steam engine and expand the scope of its operations."

As a result, no matter how much coal could be used to produce a particular product, the total amount of coal used by the company would increase.

The reason is based on the fact that reducing production costs leads to more attractive prices to the consumer followed by market share expansion. As a consequence, we have an increased demand for the product, now accessible to new potential consumers due to the reduction in its final price. Therefore, the more products are sold, the more resources are consumed, no matter how efficient the production process may become.

Many examples can be put forward to demonstrate the paradox, for example: while the automotive industry, particularly in recent decades, has greatly increased fuel-efficient car use, the number of cars produced per year has increased from about 39 million in 1999 to 89 Million in 2014 (with a consequent increase in the consumption of resources for its production), while the car's fuel efficiency in the same period went from 25mpg to only 27mpg (miles per gallon).

But one must always consider the question in a global way. The increase in efficiency does not only reduce the price of a given product but of an increasing quantity of products. With the reduction of prices, consumer purchasing power increases, and consequently, this tends to consume more products, resulting in an increase in environmental impacts, either by increased consumption of resources or production waste.

Therefore, it should always be reminded that the reduction in the consumption of a given natural resource will be unsustainable if followed by the increase in sales of the final product. As a result, the Jevons' Paradox is the fundamental reason why increasing efficiency at corporate proposals of use of environment resources and sustainable development, through the search for new technological solutions is not the response to the exhaustion of natural resources.

The Recycling Paradox

The question of recycling has been placed as one of the great objectives to be sought to reduce both the amount of waste disposed of, allowing its reinsertion into the productive system as raw material and that of natural resources consumed.

Although at first glance recycling may be an interesting solution, it only holds in a scenario where the Jevons' Paradox does not apply.

The reason for this is in the second law of thermodynamics, which states that the entropy of any isolated system always increases. Entropy is originally defined as the amount of unusable energy, in the form of dissipated heat, from any activity that involves the use of energy. A simple example is the residual heat of friction between two hands. Although it can be felt, the amount of energy available can not fuel any kind of activity. Therefore, the more energy-consuming components are included in a production system, the greater the entropy generated.

However, the concept of entropy also applies to matter in the specific case of pollution. Whenever a particular resource is fragmented into smaller fractions, its usefulness is reduced to the point where it can no longer be used. A classic example is the burning of waste. While in the form of residues, it can be managed to a useful purpose or stored to prevent damage, however by burning these residues, they are converted into microscopic and dispersed fractions, i.e., smoke, thereby becoming impossible to manage.

The implication is the ever cumulative conversion of something useful into something unusable.

Two current examples can be given for this problem:

• It is a well-known fact that plastic waste is accumulating in the bodies of water and oceans. How does entropy apply to this problem? Plastic waste alone is not a significant problem because it is made up of manageable large structures that can be collected and given a suitable destination. The problem of plastic actually occurs after some time of exposure to solar radiation which causes the plastic to degrade in micro and nano particles that are impossible to be collected or managed. 

• Another problem where the entropy applies are the projects of recycling that gives an end use to waste using it as fuel in thermoelectric power plants. Again the problems apply as manageable waste is being converted into gases and micro particles. Although these residues can be partially contained before being released into the atmosphere, the cost of doing so is the addition of more energy and matter to the process, also resulting in a waste that can not be used. 

This is the case for production systems, including recycling. Whenever a new component is added to a production chain, more energy and resources are consumed. Consequently, for each complete cycle of the process, the entropy and amount of unusable resources will be cumulatively increased, while the availability of energy and resources for the process will be cumulatively reduced. 

In this way, recycling within the constantly increasing production scenario does not offer a solution to the problem of exhaustion of natural resources, but only a palliative.

The Paradox of Renewable and Clean Sources

Renewability and cleanliness of the natural resources are the great current calls for corporate sustainability in energy

Renewable Sources 

Only planetary sources, the sun, waves, tides, and winds can actually be considered renewable. All other sources have a relative renewability which depends exclusively on the capacity of the system where it is produced in providing the basic elements of its production. Renewability of the river's energy is limited the climatic conditions that define the availability of water. 

Sources of biomass are dependent on the existing demand since its production requires uniformity of raw material, which can only be obtained through large scale monocultures. If there is a great demand for biomass, renewability is affected by soil exhaustion, which traditionally results in erosion and desertification. 

Therefore the consumption of a given resource by a population must respect the capacity of the system to produce it. Thus it should be clear that, regardless of the use of biomass, the intensity of its production is the determining factor in determining whether it is renewable and therefore sustainable or not. 

Clean sources 

Regarding clean sources there is a common misunderstanding that must be undone. When talking about clean source it is necessary to keep in mind that we are referring exclusively to the source of the resource in question. By definition, all planetary and renewable sources are clean. 

The point of confusion occurs from the lack of distinction between clean sources and clean process. Even if we use a clean source, how that usage is done will determine whether the process is cleaned or not. A classic example is hydroelectric power plants. Although based on a clean and renewable source, numerous environmental impacts are produced during its construction and operation, among them: 

• Altering the river flow and blocking the migration of fish; 

•  High level of methane emission; 

• Change in fishing activities. 

Another example is the production of biomass. Although it may be renewable, the constant addition of chemical additives results in contamination of soil and water bodies, causing problems such as:

• Contamination of drinking water or;

• Eutrophication of water bodies, resulting in mortality of fauna due to lack of oxygen. 

The use of planetary sources is also not necessarily clean. Photovoltaic panels demand the consumption of large quantities of resources for their production and area for installation. Wind turbines, in addition to the demand for resources in their construction, cause great mortality of birds and bats, as well as noise pollution. 

So it is important to keep in mind that when dealing with clean sources, it is mandatory to evaluate how it is obtained and as it is used because it is in these stages that the environmental damages present themselves.

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