Environmental Management is not, as the phrase could suggest, the management of theenvironment as such, but rather the management of interaction by the modern humansocieties with, and impact upon the environment. The three main issues that affectmanagers are those involving politics (networking), programs (projects), and resources(i.e. money, facilities, etc). The need for environmental management can be viewed froma variety of perspectives. A more common philosophy and impetus behind environmentalmanagement is the concept of carrying capacity. Simply put, carrying capacity refers tothe maximum number of organisms a particular resource can sustain. The concept ofcarrying capacity, whilst understood by many cultures over history, has its roots inMalthusian theory. Environmental management is therefore not the conservation of theenvironment solely for the environments sake, but rather the conservation of theenvironment for humankinds sake. This element of sustainable exploitation,getting the most out of natural assets, is visible in the EU Water Framework Directive.Environmental management involves the management of all components of the bio-physical environment, both living (biotic) and non-living (abiotic). This is due to theinterconnected and network of relationships amongst all living species and their habitats.The environment also involves the relationships of the human environment, such as thesocial, cultural and economic environment with the bio-physical environment.As with all management functions, effective management tools, standards and systemsare required. An environmental management standard or system or protocol attempts toreduce environmental impact as measured by some objective criteria. The ISO 14001standard is the most widely used standard for environmental risk management and isclosely aligned to the European Eco Management & Audit Scheme (EMAS). As acommon auditing standard, the ISO 19011 standard explains how to combine this withquality management. The UK has developed a phased standard (BS8555) that can helpsmaller companies move to ISO 14001 in six manageable steps.Other environmental management systems tend to be based on this standard and toextend it in various ways: • The Natural Step focuses on basic sustainability criteria and helps focus engineering on reducing use of materials or energy use that is unsustainable in the long term • Natural Capitalism advises using accounting reform and a general biomimicry and industrial ecology approach to do the same thing • US Environmental Protection Agency has many further terms and standards that it defines as appropriate to large-scale EMS. • The UN and World Bank has encouraged adopting a "natural capital" measurement and management framework. • The European Union Eco-Management and Audit Scheme (EMAS)Other strategies exist that rely on making simple distinctions rather than building top-down management "systems" using performance audits and full cost accounting. Forinstance, Ecological Intelligent Design divides products into consumables, service
products or durables and unsaleables - toxic products that no one should buy, or in manycases, do not realize they are buying. By eliminating the unsaleables from thecomprehensive outcome of any purchase, better environmental management is achievedwithout "systems".Sustainable developmentFrom Wikipedia, the free encyclopediaJump to: navigation, searchScheme of sustainable development: at the confluence of three constituent parts.[citationneeded] Environmental law
Ecotax Environmental impact assessment Intergenerational equity Polluter pays principle Precautionary principle Public trust doctrine Sustainable development Specific issues Asbestos Brownfield land Illegal logging Poaching · Unlawful fishing Mitigation of global warming International environmental law War and environmental law v•d•eSustainable development is a pattern of resource use that aims to meet human needswhile preserving the environment so that these needs can be met not only in the present,but in the indefinite future. The term was used by the Brundtland Commission whichcoined what has become the most often-quoted definition of sustainable development asdevelopment that "meets the needs of the present without compromising the ability offuture generations to meet their own needs."Sustainable development ties together concern for the carrying capacity of naturalsystems with the social challenges facing humanity. As early as the 1970s "sustainability"was employed to describe an economy "in equilibrium with basic ecological supportsystems". Ecologists have pointed to the “limits of growth” and presented thealternative of a “steady state economy” in order to address environmental concerns.The field of sustainable development can be conceptually broken into three constituentparts: environmental sustainability, economic sustainability and sociopoliticalsustainability.Sapna.firstname.lastname@example.org
Contents[hide] • 1 Scope and definitions • 2 Environmental sustainability • 3 The Notion of Capital in Sustainable Development o 3.1 Market Failure as a Reason o 3.2 The Business Case for Sustainable Development • 4 Decade of Education for Sustainable Development • 5 Critique of the Concept of Sustainable Development o 5.1 Critique regarding consequences o 5.2 Critique regarding vagueness of the term o 5.3 Critique regarding the basis o 5.4 Critique regarding "de-growth" • 6 See also • 7 References • 8 External links  Scope and definitionsThe concept has included notions of weak sustainability, strong sustainability and deepecology. Sustainable development does not focus solely on environmental issues. TheUnited Nations 2005 World Summit Outcome Document refers to the "interdependentand mutually reinforcing pillars" of sustainable development as economic development,social development, and environmental protection.Indigenous people have argued, through various international forums such as the UnitedNations Permanent Forum on Indigenous Issues and the Convention on BiologicalDiversity, that there are four pillars of sustainable development, the fourth being cultural.The Universal Declaration on Cultural Diversity (UNESCO, 2001) further elaborates theconcept by stating that "...cultural diversity is as necessary for humankind as biodiversityis for nature”; it becomes “one of the roots of development understood not simply interms of economic growth, but also as a means to achieve a more satisfactory intellectual,emotional, moral and spiritual existence". In this vision, cultural diversity is the fourthpolicy area of sustainable development.Economic Sustainability: Agenda 21 clearly identified information, integration, andparticipation as key building blocks to help countries achieve development thatrecognises these interdependent pillars. It emphasises that in sustainable developmenteveryone is a user and provider of information. It stresses the need to change from oldsector-centred ways of doing business to new approaches that involve cross-sectoral co-ordination and the integration of environmental and social concerns into all development
processes. Furthermore, Agenda 21 emphasises that broad public participation in decisionmaking is a fundamental prerequisite for achieving sustainable development.According to Hasna, sustainability is a process which tells of a development of all aspectsof human life affecting sustenance. It means resolving the conflict between the variouscompeting goals, and involves the simultaneous pursuit of economic prosperity,environmental quality and social equity famously known as three dimensions (triplebottom line) with is the resultant vector being technology, hence it is a continuallyevolving process; the ‘journey’ (the process of achieving sustainability) is of coursevitally important, but only as a means of getting to the destination (the desired futurestate). However,the ‘destination’ of sustainability is not a fixed place in the normal sensethat we understand destination. Instead, it is a set of wishful characteristics of a futuresystem.Green development is generally differentiated from sustainable development in thatGreen development prioritizes what its proponents consider to be environmentalsustainability over economic and cultural considerations. Proponents of SustainableDevelopment argue that it provides a context in which to improve overall sustainabilitywhere cutting edge Green development is unattainable. For example, a cutting edgetreatment plant with extremely high maintenance costs may not be sustainable in regionsof the world with fewer financial resources. An environmentally ideal plant that is shutdown due to bankruptcy is obviously less sustainable than one that is maintainable by thecommunity, even if it is somewhat less effective from an environmental standpoint.Some research activities start from this definition to argue that the environment is acombination of nature and culture. The Network of Excellence "Sustainable Developmentin a Diverse World", sponsored by the European Union, integrates multidisciplinarycapacities and interprets cultural diversity as a key element of a new strategy forsustainable development.Still other researchers view environmental and social challenges as opportunities fordevelopment action. This is particularly true in the concept of sustainable enterprise thatframes these global needs as opportunities for private enterprise to provide innovativeand entrepreneurial solutions. This view is now being taught at many business schoolsincluding the Center for Sustainable Global Enterprise at Cornell University and the ErbInstitute for Global Sustainable Enterprise at the University of Michigan.The United Nations Division for Sustainable Development lists the following areas ascoming within the scope of sustainable development: • Agriculture • Education and • International • Science • Atmosphere Awareness Law • SIDS • Biodiversity • Energy • International • Sustainable • Biotechnology • Systems Cooperation tourism • Capacity- ecology for Enabling • Technology building • Finance Environment • Toxic
• Climate Change • Forests • Institutional Chemicals • Consumption • Fresh Water Arrangements • Trade and and Production • Health • Land Environmen Patterns • Human management t • Demographics Settlements • Major Groups • Transport • Desertification • Indicators • Mountains • Waste and Drought • Industry • National (Hazardous) • Disaster • Information Sustainable • Waste Reduction and for Decision Development (Radioactive Management Making and Strategies ) Participation • Oceans and • Waste • Integrated Seas (Solid) Decision • Poverty Making • Sanitation • WaterSustainable development is an eclectic concept, as a wide array of views fall under itsumbrella. The concept has included notions of weak sustainability, strong sustainabilityand deep ecology. Different conceptions also reveal a strong tension between ecocentrismand anthropocentrism. The concept remains weakly defined and contains a large amountof debate as to its precise definition.During the last ten years, different organizations have tried to measure and monitor theproximity to what they consider sustainability by implementing what has been calledsustainability metrics and indices.Sustainable development is said to set limits on the developing world. While current firstworld countries polluted significantly during their development, the same countriesencourage third world countries to reduce pollution, which sometimes impedes growth.Some consider that the implementation of sustainable development would mean areversion to pre-modern lifestyles.Others have criticized the overuse of the term: "[The] word sustainable has been used in too many situations today, and ecological sustainability is one of those terms that confuse a lot of people. You hear about sustainable development, sustainable growth, sustainable economies, sustainable societies, sustainable agriculture. Everything is sustainable (Temple, 1992)." Environmental sustainability
Environmental sustainability is the process of making sure current processes ofinteraction with the environment are pursued with the idea of keeping the environment aspristine as naturally possible based on ideal-seeking behavior.An "unsustainable situation" occurs when natural capital (the sum total of naturesresources) is used up faster than it can be replenished. Sustainability requires that humanactivity only uses natures resources at a rate at which they can be replenished naturally.Inherently the concept of sustainable development is intertwined with the concept ofcarrying capacity. Theoretically, the long-term result of environmental degradation is theinability to sustain human life. Such degradation on a global scale could imply extinctionfor humanity. Consumption of renewable State of environment Sustainability resources EnvironmentalMore than natures ability to replenish Not sustainable degradation EnvironmentalEqual to natures ability to replenish Steady-state economy equilibrium SustainableLess than natures ability to replenish Environmental renewal development The Notion of Capital in Sustainable DevelopmentThe sustainable development debate is based on the assumption that societies need tomanage three types of capital (economic, social, and natural), which may be non-substitutable and whose consumption might be irreversible.  Daly (1991), forexample, points to the fact that natural capital can not necessarily be substituted byeconomic capital. While it is possible that we can find ways to replace some naturalresources, it is much more unlikely that they will ever be able to replace eco-systemservices, such as the protection provided by the ozone layer, or the climate stabilizingfunction of the Amazonian forest. In fact natural capital, social capital and economiccapital are often complementarities. A further obstacle to substitutability lies also in themulti-functionality of many natural resources. Forests, for example, do not only providethe raw material for paper (which can be substituted quite easily), but they also maintainbiodiversity, regulate water flow, and absorb CO2. Another problem of natural and socialcapital deterioration lies in their partial irreversibility. The loss in biodiversity, forexample, is often definite. The same can be true for cultural diversity. For example withglobalisation advancing quickly the number of indigenous languages is dropping atalarming rates. Moreover, the depletion of natural and social capital may have non-linearconsequences. Consumption of natural and social capital may have no observable impactuntil a certain threshold is reached. A lake can, for example, absorb nutrients for a longtime while actually increasing its productivity. However, once a certain level of algae isreached lack of oxygen causes the lake’s ecosystem to break down all of a sudden. Market Failure as a Reason
If the degradation of natural and social capital has such important consequence thequestion arises why action is not taken more systematically to alleviate it. Cohen andWinn (2007) point to four types of market failure as possible explanations: Firstly,while the benefits of natural or social capital depletion can usually be privatized the costsare often externalized (i.e. they are born not by the party responsible but by society ingeneral). They add that many times natural capital is also undervalued by society sincewe are not fully aware of the real cost caused by the depletion of natural capital.Information asymmetry is a third reason identified to cause natural and social capitaldepletion. Often the link between cause and effect is obscured, thus making it difficult foractors to make informed choices. Cohen and Winn close with the realization that contraryto economic theory many firms are not perfect optimizers. They postulate that firms oftento do not optimize resource allocation because they are caught in a business as usualmentality. The Business Case for Sustainable DevelopmentThe most broadly accepted criterion for corporate sustainability constitutes a firm’sefficient use of natural capital. This eco-efficiency is usually calculated as the economicvalue added by a firm in relation to its aggregated ecological impact. This idea hasbeen popularised by the World Business Council for Sustainable Development (WBCSD)under the following definition: “Eco-efficiency is achieved by the delivery ofcompetitively-priced goods and services that satisfy human needs and bring quality oflife, while progressively reducing ecological impacts and resource intensity throughoutthe life-cycle to a level at least in line with the earth’s carrying capacity.” (DeSimone andPopoff, 1997: 47)Similar to the eco-efficiency concept but so far less explored is the second criterion forcorporate sustainability. Socio-efficiency describes the relation between a firm’s valueadded and its social impact. Whereas, it can be assumed that most corporate impacts onthe environment are negative (apart from rare exceptions such as the planting of trees)this is not true for social impacts. These can be either positive (e.g. corporate giving,creation of employment) or negative (e.g. work accidents, mobbing of employees, humanrights abuses). Depending on the type of impact socio-efficiency thus either tries tominimize negative social impacts (i.e. accidents per value added) or maximise positivesocial impacts (i.e. donations per value added) in relation to the value added.Both eco-efficiency and socio-efficiency are concerned primarily with increasingeconomic sustainability. In this process they instrumentalize both natural and socialcapital aiming to benefit from win-win situations. However, as Dyllick and Hockertspoint out the business case alone will not be sufficient to realise sustainable development.They point towards eco-effectiveness, socio-effectiveness, sufficiency, and eco-equity asfour criteria that need to be met if sustianable development is to be reached. Decade of Education for Sustainable Development
The United Nations has declared a Decade of Education for Sustainable Developmentstarting in January 2005. A non-partisan multi-sector response to the decade has formedwithin the U.S. via the U.S. Partnership for the Decade of Education for SustainableDevelopment. Active sectors teams have formed for youth, higher education, business,religion, the arts, and more. Organizations and individuals can join in sharing resourcesand success stories, and creating a sustainable future. Sustainable development is not justabout business perspective but should be understood in such way to benefit the world as awhole. Critique of the Concept of SustainableDevelopmentThe concept of “ Sustainable Development ” raises several critiques at different levels. Critique regarding consequencesJohn Baden reckons that the notion of sustainable development is dangerous becausethe consequences are proceedings with unknown effects or potentially dangerous. Hewrites: "In economy like in ecology, the interdependence rules applies. Isolated actionsare impossible. A policy which is not enough carefully thought will carry along variousperverse and adverse effects for the ecology as much as for the economy. Manysuggestions to save our environment and to promote a model of sustainable developmentrisk indeed leading to reverse effects." Moreover, he evokes the bounds of the publicaction which are underlined by the public choice theory: quest by the politics of their owninterests, lobby pressure, partial disclosure etc. He develops his critic by notifying thevagueness of the expression, which can hide anything : It is a gateway to interventionistproceedings which can be again the principle of freedom and without a proved efficacy.Against this notion, he is a proponent of the private property to impel the producers andthe consumers to save the natural resources. According to Baden, “the improvement ofenvironment quality depends on the market economy and the existence of legitimate andprotected property rights.” They enable the effective practice of his personalresponsibility and the development of mechanisms to protect the environment. The Statecan in this context “create conditions which encourage the people to save theenvironment.”Critique regarding vagueness of the termThe term of “sustainable development” is criticized because of its vagueness. Forexample, Jean-Marc Jancovici or the philosopher Luc Ferry express this view. Thelatter writes about sustainaible development: "I know that this term is obligatory, but Ifind it also absurd, or rather so vague that it says nothing." Luc Ferry adds that the term istrivial by a proof by contradiction: "who would like to be a proponent of an “untenabledevelopment! Of course no one! [..] The term is more charming than meaningful. [..]Everything must be done so that it does not turn into a Russian-type administrativeplanning with ill effects."
Critique regarding the basisSylvie Brunel, French geographer and specialist of the Third World, develops in A quiprofite le développement durable (who take advantage of the sustainable development)(2008) a critic of the basis of the sustainable development, with its binary vision of theworld, can be compared to the Christian vision of Good and Evil, a idealized naturewhere the human being is an animal like the others or even an alien. The nature – asRousseau thought – is better than the human being. It is a parasite, harmful for the nature.But the human is the one who protects the biodiversity, where normally only the strongsurvive.Moreover, she thinks that the ideas of sustainable development can hide a will ofprotectionism from the developed country to impede the development of the othercountries. For Sylvie Brunel, the sustainable development serves as a pretext for theprotectionism and “I have the feeling about sustainable development that it is perfectlyhelping out the capitalism”.Critique regarding "de-growth"The proponents of the de-growth reckons that the term of sustainable development is anoxymoron. According to them, on a planet where 20% of the population consumes 80%of the natural resources, a sustainable development cannot be possible for this 20% :“According to the origin of the concept of sustainable development , a developmentwhich meets the needs of the present without compromising the ability of futuregenerations to meet their own needs, the right term for the developed countries should bea sustainable de-growth” See alsoEnvironmental Factors • Erosion. Intensive farming often leads to a vicious cycle of exhaustion of soil fertility and decline of agricultural yields and hence, increased poverty. • Desertification and overgrazing. Approximately 40% of the worlds agricultural land is seriously degraded. In Africa, if current trends of soil degradation continue, the continent might be able to feed just 25% of its population by 2025, according to UNUs Ghana-based Institute for Natural Resources in Africa. • Deforestation as exemplified by the widespread rural poverty in China that began in the early 20th century and is attributed to non-sustainable tree harvesting. • Natural factors such as climate change. or environment Lower income families suffer the most from climate change; yet on a per capita basis, they contribute the least to climate change  • Geographic factors, for example access to fertile land, fresh water, minerals, energy, and other natural resources, presence or absence of natural features helping or limiting communication, such as mountains, deserts, navigable rivers,
or coastline. Historically, geography has prevented or slowed the spread of new technology to areas such as the Americas and Sub-Saharan Africa. The climate also limits what crops and farm animals may be used on similarly fertile lands. • On the other hand, research on the resource curse has found that countries with an abundance of natural resources creating quick wealth from exports tend to have less long-term prosperity than countries with less of these natural resources. • Drought and water crisis.Energy management systemFrom Wikipedia, the free encyclopediaJump to: navigation, searchAn energy management system (EMS) is a system of computer-aided tools used byoperators of electric utility grids to monitor, control, and optimize the performance of thegeneration and/or transmission system. The monitor and control functions are known asSCADA; the optimization packages are often referred to as "advanced applications".The computer technology is also referred to as SCADA/EMS or EMS/SCADA. In theserespects, the terminology EMS then excludes the monitoring and control functions, butmore specifically refers to the collective suite of power network applications and to thegeneration control and scheduling applications.A dispatcher training simulator (DTS) is a related technology that makes use ofcomponents of SCADA and EMS as a training tool for control centre operators.• SuppliersThe major global suppliers of energy management systems for controlling large powertransmission and distribution grids include ETAP Real-Time, ABB, AREVA, GE, OSI,SIEMENS and SNC. In China, several large EMS have been delivered by Nanjing-basedNARI and by Yantai Dong Fang. Toshiba and Hitachi are the major EMS suppliers inJapan. A major German-based supplier is PSI-CNI. Minneapolis based OSI is a globalsupplier of open system-based EMS products. Energinet.no is an automatic web basedenergy management system which is language independent and can import automaticallyany type of formats from Grid companies, power suppliers, BMS Systems etc. It followsthe EU EN16001 standard. • ETAP Real-Time is a suite of software tools that offers a fully integrated enterprise solution used to monitor, control, and optimize the performance of generation and transmission system.
• The ABB EMS includes technology derived from the former Ferranti Ranger as well as the European Spider and SINDAC product ranges. • The AREVA EMS is based on technology acquired from the Richmond, Virginia- based ESCA. • The Melbourne, Florida-based GE XA/21 EMS is the continued development of the former Harris Controls product range. • The SIEMENS EMS includes technology derived from former Minneapolis-based Control Data Corporation (CDC) as well as the European SINAUT Spectrum product range. • The SNC-Lavalin EMS is the continued development of the former CAE product range. The SNC EMS product range is developed in Montreal, Canada.Manufacturers of EMS also commonly supply a corresponding dispatcher trainingsimulator (DTS). It is also possible to acquire an independent DTS from a non-EMSsource such as EPRI.Energy Efficiencyit is good, sorry.Automated Control of Building EnergyBuilding Management SystemThe term Energy Management System can also refer to a computer system which isdesigned specifically for the automated control and monitoring of the heating, ventilationand lighting needs of a building or group of buildings such as university campuses, officebuildings or factories. Most of these energy management systems also provide facilitiesfor the reading of electricity, gas and water meters. The data obtained from these can thenbe used to produce trend analysis and annual consumption forecasts.The ISO 14000 environmental management standards exist to help organizationsminimize how their operations negatively affect the environment (cause adverse changesto air, water, or land) and comply with applicable laws and regulations.ISO 14001 is the international specification for an environmental management system(EMS). It specifies requirements for establishing an environmental policy, determiningenvironmental aspects and impacts of products/activities/services, planningenvironmental objectives and measurable targets, implementation and operation of
programs to meet objectives and targets, checking and corrective action, and managementreview. ISO 14000 is similar to ISO 9000 quality management in that both pertain to theprocess (the comprehensive outcome of how a product is produced) rather than to theproduct itself. The overall idea is to establish an organized approach to systematicallyreduce the impact of the environmental aspects which an organization can control.Effective tools for the analysis of environmental aspects of an organization and for thegeneration of options for improvement are provided by the concept of CleanerProduction.As with ISO 9000, certification is performed by third-party organizations rather thanbeing awarded by ISO directly. The ISO 19011 audit standard applies when auditing forboth 9000 and 14000 compliance at once.StandardsThe material included in this family of specifications is very broad. The major parts ofISO 14000 are: • ISO 14001 is the standard against which organizations are assessed. ISO 14001 is generic and flexible enough to apply to any organization producing and/or manufacturing any product, or even providing a service anywhere in the world. • ISO 14004 is a guidance document that explains the 14001 requirements in more detail. These present a structured approach to setting environmental objectives and targets and to establishing and monitoring operational controls.These are further expanded upon by the following: • ISO 14020 series (14020 to 14025), Environmental Labeling, covers labels and declarations. • ISO 14030 discusses post-production environmental assessment. • ISO 14031 Evaluation of Environmental Performance. • ISO 14040 series (14040 to 14044), Life Cycle Assessment, LCA, discusses pre- production planning and environment goal setting. • ISO 14050 terms and definitions. • ISO 14062 discusses making improvements to environmental impact goals. • ISO 14063 is an addendum to 14020, discussing further communications on environmental impact. • ISO 14064-1:2006 is Greenhouse gases – Part 1: Specification with guidance at the organization level for the description, quantification and reporting of greenhouse gas emissions and removals. • ISO 14064-2:2006 is Greenhouse gases – Part 2: Specification with guidance at the project level for the description, quantification, monitoring and reporting of greenhouse gas emission reductions and removal enhancements. • ISO 14064-3:2006 is Greenhouse gases – Part 3: Specification with guidance for the validation and verification of greenhouse gas assertion.
• ISO 19011 which specifies one audit protocol for both 14000 and 9000 series standards together. This replaces ISO 14011 meta-evaluation—how to tell if your intended regulatory tools worked. 19011 is now the only recommended way to determine this.Environmental lawEnvironmental law is a complex and interlocking body of statutes, common law,treaties, conventions, regulations and policies which, very broadly, operate to regulate theinteraction of humanity and the rest of the biophysical or natural environment, toward thepurpose of reducing or minimizing the impacts of human activity, both on the naturalenvironment for its own sake, and on humanity itself. Environmental law draws from andis influenced by principles of environmentalism, including ecology, conservation,stewardship, responsibility and sustainability. From an economic perspective it can beunderstood as concerned with the prevention of present and future externalities.Areas of concern in environmental law include air quality, water quality, global climatechange, agriculture, biodiversity, species protection, pesticides and hazardous chemicals,waste management, remediation of contaminated land and brownfields, smart growth,sustainable development, impact review, and conservation, stewardship and managementof public lands and natural resources.While many countries worldwide have since accumulated impressive sets ofenvironmental laws, their implementation has often been woeful. In recent years,environmental law has become seen as a critical means of promoting sustainabledevelopment (or "sustainability"). Policy concepts such as the precautionary principle,public participation, environmental justice, and the polluter pays principle have informedmany environmental law reforms in this respect (see further Richardson and Wood,2006). There has been considerable experimentation in the search for more effectivemethods of environmental control beyond traditional "command-and-control" styleregulation. Eco-taxes, emission trading, voluntary standards such as ISO 14000 andnegotiated agreements are some of these innovations.Ecotax, short for Ecological taxation, can refer to:A policy that introduces taxes intended to promote ecologically sustainable activities viaeconomic incentives. Such a policy can complement or avert the need for regulatoryapproaches. Often, such a policy intends to maintain overall tax revenue byproportionately reducing other taxes, e.g. on human labor and renewable resources, inwhich case it is known as the green tax shift towards ecological taxation. The Pigoviantaxes that are introduced by such a policy - see below.• Taxes affected
Examples of taxes which could be lowered or eliminated by a green tax shift: • Payroll, income, and (to a lesser extent) sales taxes. • Corporate taxes (taxes on investment and entrepreneurship). • Property taxes on buildings and other infrastructure.Examples of ecotaxes which could be implemented or increased: • Carbon taxes on the use of fossil fuels by greenhouse gases produced. Old hydrocarbon taxes dont penalize green house gas (GHG) production. • Duties on imported goods containing significant non-ecological energy input (to a level necessary to treat fairly local manufacturers) • Severance taxes on the extraction of mineral, energy, and forestry products. • License fees for camping, hiking, fishing and hunting and associated equipment. • Specific taxes on technologies and products which are associated with substantial negative externalities. • Waste disposal taxes and refundable fees. • Taxes on effluents, pollution and other hazardous wastes. • Site value taxes on the unimproved value of land.Economic frameworks and strategies employing taxshifting and ecotaxesThe object of a green tax shift is often to implement a "full cost accounting" or "true costaccounting", using fiscal policy to internalize market distorting externalities, which leadsto sustainable wealth creation. The broader measure required for this are also sometimescalled ecological fiscal reform, especially in Canada where the government has generallyemployed this terminology.Tax shifting usually includes balancing taxation levels to be revenue-neutral forgovernment and to maintain overall progressiveness. It also usually includes measures toprotect the most vulnerable, such as raising the minimum income to file income tax at all,or an increase to pension and social assistance levels to offset increased costs of fuelconsumption.Basic economic theory recognizes the existence of externalities and their potentialnegative effects. To the extent that green taxes correct for externalities such as pollution,they correspond with mainstream economic theory. In practice, however, setting thecorrect taxation level or the tax collection system needed to do so is difficult, and maylead to further distortions or unintended consequences.Taxes on consumption may take the "feebate" approach advocated by Amory Lovins inwhich additional fees on less sustainable products — such as sport utility vehicles — arepooled to fund subsidies on more sustainable alternatives — such as hybrid electricvehicles.
However, they may simply act as incentives to change habits and make capitalinvestments in newer more efficient vehicles or appliances or to upgrade buildings. Smallchanges in corporate tax rates for instance can radically change return on investment ofcapital projects, especially if the averted costs of future fossil fuel use are taken intoaccount.The same logic applies to major consumer purchases. A "green mortgage" for instancerecognizes that persons who dont drive cars and live generally energy-efficient lifestylespay far less per month than others and accordingly have more to pay a heftier mortgagebill with. This justifies lending them much more money to upgrade a house to use evenless energy overall. The result is a bank taking more per month from a consumersincome as utilities and car insurance companies take less, and housing stock upgraded touse the minimum energy feasible with current technology.Aside from energy, the refits will generally be those required to be maximallyaccommodating to telework, permaculture gardens for example green roofs, and alifestyle that is generally localized in the community not based on commuting. The last,especially, raises real state valuations for not only the neighborhood but the entiresurrounding region. Consumers living sustainable lifestyles in upgraded housing willgenerally be unwilling to drive around aimlessly shopping, for instance, to save a fewdollars on their purchases. Instead, theyll stay nearer to home and create jobs in grocerydelivery and small organic grocers, spending substantially less money on gasoline and caroperation costs even if they pay more for food.Progressive or Regressive?Some green tax shift proposals have been criticized as being fiscally regressive (a taxwith a marginal rate that decreases as the taxpayers income increases). Taxing negativeexternalities usually entails exerting a burden on consumption, and since the poorconsume more and save or invest less as a share of their income, any shift towardsconsumption taxes can be regressive. In 2004, research by the Policy Studies Institute andJoseph Rowntree Foundation seemed to confirm this view.However, conventional regulatory approaches can affect prices in much the same way,while lacking the revenue-recycling potential of ecotaxes. Moreover, correctly assessingdistributive impact of any tax shift requires an analysis of the specific instrument designfeatures. For example, an ecotax can have a "lifeline" design, in which modestconsumption levels are priced relatively low (even zero, in the case of water), and higherconsumption levels are priced at a higher rate. Furthermore, an ecotax policy package caninclude revenue recycling to reduce or eliminate any regressivity; an increase in anecotax could be more than offset by a decrease in a (regressive) payroll or consumptiontax. Some proponents claim a second benefit of increased employment or lower healthcare costs as the market and society adjust to the new fiscal policy (these claims, as withthe claim "tax cuts create jobs," are often difficult to prove or disprove even after thefact).
Furthermore, pollution and other forms of environmental harm are often felt more acutelyby the poor, who cannot "buy their way out" of being receptors of air pollution, waterpollution, etc. Such losses, although externalities, have real economic welfare impacts.Thus by reducing environmental harm, such instruments have a progressive effect.Ecotax policies enacted Environmental law Ecotax Environmental impact assessment Intergenerational equity Polluter pays principle Precautionary principle Public trust doctrine Sustainable development Specific issuesAn ecotax has been enacted in Germany by means of three laws in 1998, 1999 and 2002.The first introduced a tax on electricity and petroleum, at variable rates based onenvironmental considerations; renewable sources of electricity are not taxed. The secondadjusted the taxes to favor efficient conventional power plants. The third increased thetax on petroleum. At the same time, income taxes were reduced proportionally so that thetotal tax burden remained constant. The regional government of Baleares Islands (thenheld by a ecosocialist coalition) established an eco tax in 1999. The Baleares Island suffera high human pressure from tourism, that at the same time provides the main source ofincome. The tax (1€ per person per day) would be paid by visitors staying at tourist
resorts. This was criticized by the conservative opposition, as contrary to businessinterests, and abolished the tax in 2003 after seizing back the government. Registration taxesThe Netherlands, Portugal, UK, Spain and Finland have introduced differentiations intotheir car registration taxes to encourage car buyers to opt for the cleanest car models.In the Netherlands, the new registration taxes, payable when a car is sold to its firstbuyer, can earn the owner of a hybrid a discount up to €6000. Spain reduced taxes forcars that produced less CO2 (some of which will be exempted), while the moreconsuming, like SPV and 4WD saw their taxes increased.Austria has had a registration tax based on fuel consumption for several years.See also : Vehicle registration plate Worldwide implimentationUKUnder the Current Labour government (1997 to present), despite Gordon Brown’spromise to the contrary, green taxes as a percentage of overall taxes have actually fallenfrom 9.4% to 7.7%, according to calculations by Friends of the Earth"Merger" redirects here. For other uses, see Merge."Acquisition" redirects here. For other uses, see Acquisition (disambiguation).The phrase mergers and acquisitions (abbreviated M&A) refers to the aspect ofcorporate strategy, corporate finance and management dealing with the buying, sellingand combining of different companies that can aid, finance, or help a growing companyin a given industry grow rapidly without having to create another business entity.Contents[hide] • 1 Overview • 2 Acquisition o 2.1 Types of acquisition • 3 Merger o 3.1 Classifications of mergers o 3.2 Distinction between Mergers and Acquisitions • 4 Business valuation
• 5 Financing M&A o 5.1 Cash o 5.2 Financing o 5.3 Hybrids o 5.4 Factoring • 6 Specialist M&A advisory firms • 7 Motives behind M&A • 8 Effects on management • 9 M&A marketplace difficulties • 10 The Great Merger Movement o 10.1 Short-run factors o 10.2 Long-run factors • 11 Cross-border M&A • 12 Sovereign Wealth Funds set up a shared corporate acquisitions database • 13 Major M&A in the 1990s • 14 Major M&A from 2000 to present • 15 See also • 16 References • 17 Further reading  Overview This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unverifiable material may be challenged and removed. (June 2008)A merger is a tool used by companies for the purpose of expanding their operations oftenaiming at an increase of their long term profitability. There are 15 different types ofactions that a company can take when deciding to move forward using M&A. Usuallymergers occur in a consensual (occurring by mutual consent) setting where executivesfrom the target company help those from the purchaser in a due diligence process toensure that the deal is beneficial to both parties. Acquisitions can also happen through ahostile takeover by purchasing the majority of outstanding shares of a company in theopen market against the wishes of the targets board. In the United States, business lawsvary from state to state whereby some companies have limited protection against hostiletakeovers. One form of protection against a hostile takeover is the shareholder rightsplan, otherwise known as the "poison pill".Historically, mergers have often failed (Straub, 2007) to add significantly to the value ofthe acquiring firms shares (King, et al., 2004). Corporate mergers may be aimed atreducing market competition, cutting costs (for example, laying off employees, operatingat a more technologically efficient scale, etc.), reducing taxes, removing management,"empire building" by the acquiring managers, or other purposes which may or may not beconsistent with public policy or public welfare. Thus they can be heavily regulated, for
example, in the U.S. requiring approval by both the Federal Trade Commission and theDepartment of Justice.The U.S. began their regulation on mergers in 1890 with the implementation of theSherman Act. It was meant to prevent any attempt to monopolize or to conspire to restricttrade. However, based on the loose interpretation of the standard "Rule of Reason", it wasup to the judges in the U.S. Supreme Court whether to rule leniently (as with U.S. Steelin 1920) or strictly (as with Alcoa in 1945).Acquisition TakeoverAn acquisition, also known as a takeover, is the buying of one company (the ‘target’) byanother. An acquisition may be friendly or hostile. In the former case, the companiescooperate in negotiations; in the latter case, the takeover target is unwilling to be boughtor the targets board has no prior knowledge of the offer. Acquisition usually refers to apurchase of a smaller firm by a larger one. Sometimes, however, a smaller firm willacquire management control of a larger or longer established company and keep its namefor the combined entity. This is known as a reverse takeover.Types of acquisition • The buyer buys the shares, and therefore control, of the target company being purchased. Ownership control of the company in turn conveys effective control over the assets of the company, but since the company is acquired intact as a going business, this form of transaction carries with it all of the liabilities accrued by that business over its past and all of the risks that company faces in its commercial environment. • The buyer buys the assets of the target company. The cash the target receives from the sell-off is paid back to its shareholders by dividend or through liquidation. This type of transaction leaves the target company as an empty shell, if the buyer buys out the entire assets. A buyer often structures the transaction as an asset purchase to "cherry-pick" the assets that it wants and leave out the assets and liabilities that it does not. This can be particularly important where foreseeable liabilities may include future, unquantified damage awards such as those that could arise from litigation over defective products, employee benefits or terminations, or environmental damage. A disadvantage of this structure is the tax that many jurisdictions, particularly outside the United States, impose on transfers of the individual assets, whereas stock transactions can frequently be structured as like-kind exchanges or other arrangements that are tax-free or tax- neutral, both to the buyer and to the sellers shareholders.
The terms "demerger", "spin-off" and "spin-out" are sometimes used to indicate asituation where one company splits into two, generating a second company separatelylisted on a stock exchange.MergerIn business or economics a merger is a combination of two companies into one largercompany. Such actions are commonly voluntary and involve stock swap or cash paymentto the target. Stock swap is often used as it allows the shareholders of the two companiesto share the risk involved in the deal. A merger can resemble a takeover but result in anew company name (often combining the names of the original companies) and in newbranding; in some cases, terming the combination a "merger" rather than an acquisition isdone purely for political or marketing reasons.Classifications of mergers • Horizontal mergers take place where the two merging companies produce similar product in the same industry. • Vertical mergers occur when two firms, each working at different stages in the production of the same good, combine. • Congeneric mergers occur where two merging firms are in the same general industry, but they have no mutual buyer/customer or supplier relationship, such as a merger between a bank and a leasing company. Example: Prudentials acquisition of Bache & Company. • Conglomerate mergers take place when the two firms operate in different industries. • -A unique type of merger called a reverse merger is used as a way of going public withoutthe expense and time required by an IPO.The contract vehicle for achieving a merger is a "merger sub".The occurrence of a merger often raises concerns in antitrust circles. Devices such as theHerfindahl index can analyze the impact of a merger on a market and what, if any, actioncould prevent it. Regulatory bodies such as the European Commission, the United StatesDepartment of Justice and the U.S. Federal Trade Commission may investigate anti-trustcases for monopolies dangers, and have the power to block mergers.Accretive mergers are those in which an acquiring companys earnings per share (EPS)increase. An alternative way of calculating this is if a company with a high price toearnings ratio (P/E) acquires one with a low P/E.Dilutive mergers are the opposite of above, whereby a companys EPS decreases. Thecompany will be one with a low P/E acquiring one with a high P/E.
The completion of a merger does not ensure the success of the resulting organization;indeed, many mergers (in some industries, the majority) result in a net loss of value dueto problems. Correcting problems caused by incompatibility—whether of technology,equipment, or corporate culture— diverts resources away from new investment, and theseproblems may be exacerbated by inadequate research or by concealment of losses orliabilities by one of the partners. Overlapping subsidiaries or redundant staff may beallowed to continue, creating inefficiency, and conversely the new management may cuttoo many operations or personnel, losing expertise and disrupting employee culture.These problems are similar to those encountered in takeovers. For the merger not to beconsidered a failure, it must increase shareholder value faster than if the companies wereseparate, or prevent the deterioration of shareholder value more than if the companieswere separate.Distinction between Mergers and AcquisitionsAlthough they are often uttered in the same breath and used as though they weresynonymous, the terms merger and acquisition mean slightly different things.When one company takes over another and clearly established itself as the new owner,the purchase is called an acquisition. From a legal point of view, the target companyceases to exist, the buyer "swallows" the business and the buyers stock continues to betraded.In the pure sense of the term, a merger happens when two firms, often of about the samesize, agree to go forward as a single new company rather than remain separately ownedand operated. This kind of action is more precisely referred to as a "merger of equals".Both companies stocks are surrendered and new company stock is issued in its place. Forexample, both Daimler-Benz and Chrysler ceased to exist when the two firms merged,and a new company, DaimlerChrysler, was created.In practice, however, actual mergers of equals dont happen very often. Usually, onecompany will buy another and, as part of the deals terms, simply allow the acquired firmto proclaim that the action is a merger of equals, even if it is technically an acquisition.Being bought out often carries negative connotations, therefore, by describing the dealeuphemistically as a merger, deal makers and top managers try to make the takeovermore palatable.A purchase deal will also be called a merger when both CEOs agree that joining togetheris in the best interest of both of their companies. But when the deal is unfriendly - that is,when the target company does not want to be purchased - it is always regarded as anacquisition.Whether a purchase is considered a merger or an acquisition really depends on whetherthe purchase is friendly or hostile and how it is announced. In other words, the realdifference lies in how the purchase is communicated to and received by the targetcompanys board of directors, employees and shareholders. It is quite normal though for
M&A deal communications to take place in a so called confidentiality bubble wherebyinformation flows are restricted due to confidentiality agreements (Harwood, 2005).Business valuationThe five most common ways to valuate a business are • asset valuation, • historical earnings valuation, • future maintainable earnings valuation, • relative valuation (comparable company & comparable transactions), • discounted cash flow (DCF) valuationProfessionals who valuate businesses generally do not use just one of these methods but acombination of some of them, as well as possibly others that are not mentioned above, inorder to obtain a more accurate value. These values are determined for the most part bylooking at a companys balance sheet and/or income statement and withdrawing theappropriate information. The information in the balance sheet or income statement isobtained by one of three accounting measures: a Notice to Reader, a Review Engagementor an Audit.Accurate business valuation is one of the most important aspects of M&A as valuationslike these will have a major impact on the price that a business will be sold for. Mostoften this information is expressed in a Letter of Opinion of Value (LOV) when thebusiness is being valuated for interests sake. There are other, more detailed ways ofexpressing the value of a business. These reports generally get more detailed andexpensive as the size of a company increases, however, this is not always the case asthere are many complicated industries which require more attention to detail, regardlessof size.Financing M&AMergers are generally differentiated from acquisitions partly by the way in which theyare financed and partly by the relative size of the companies. Various methods offinancing an M&A deal exist:CashPayment by cash. Such transactions are usually termed acquisitions rather than mergersbecause the shareholders of the target company are removed from the picture and thetarget comes under the (indirect) control of the bidders shareholders alone.A cash deal would make more sense during a downward trend in the interest rates.Another advantage of using cash for an acquisition is that there tends to lesser chances of
EPS dilution for the acquiring company. But a caveat in using cash is that it placesconstraints on the cash flow of the company.FinancingFinancing capital may be borrowed from a bank, or raised by an issue of bonds.Alternatively, the acquirers stock may be offered as consideration. Acquisitions financedthrough debt are known as leveraged buyouts if they take the target private, and the debtwill often be moved down onto the balance sheet of the acquired company.HybridsAn acquisition can involve a combination of cash and debt, or a combination of cash andstock of the purchasing entity.FactoringFactoring can provide the necessary extra to make a merger or sale work. Hybrid canwork as ad e-denitSpecialist M&A advisory firmsAlthough at present the majority of M&A advice is provided by full-service investmentbanks, recent years have seen a rise in the prominence of specialist M&A advisers, whoonly provide M&A advice (and not financing). To perform these services in the US, anadvisor must be a licensed broker dealer, and subject to SEC (FINRA) regulation. Moreinformation on M&A advisory firms is provided at corporate advisory.Motives behind M&AThe dominant rationale used to explain M&A activity is that acquiring firms seekimproved financial performance. The following motives are considered to improvefinancial performance: • Synergies: This refers to the fact that the combined company can often reduce its fixed costs by removing duplicate departments or operations, lowering the costs of the company relative to the same revenue stream, thus increasing profit margins. • Increased revenue/Increased Market Share: This assumes that the buyer will be absorbing a major competitor and thus increase its market power (by capturing increased market share) to set prices. • Cross selling: For example, a bank buying a stock broker could then sell its banking products to the stock brokers customers, while the broker can sign up the banks customers for brokerage accounts. Or, a manufacturer can acquire and sell complementary products.
• Economies of Scale: For example, managerial economies such as the increased opportunity of managerial specialization. Another example are purchasing economies due to increased order size and associated bulk-buying discounts. • Taxes: A profitable company can buy a loss maker to use the targets loss as their advantage by reducing their tax liability. In the United States and many other countries, rules are in place to limit the ability of profitable companies to "shop" for loss making companies, limiting the tax motive of an acquiring company. • Geographical or other diversification: This is designed to smooth the earnings results of a company, which over the long term smoothens the stock price of a company, giving conservative investors more confidence in investing in the company. However, this does not always deliver value to shareholders (see below). • Resource transfer: resources are unevenly distributed across firms (Barney, 1991) and the interaction of target and acquiring firm resources can create value through either overcoming information asymmetry or by combining scarce resources. • Vertical integration: Vertical Integration occurs when an upstream and downstream firm merge (or one acquires the other). There are several reasons for this to occur. One reason is to internalise an externality problem. A common example is of such an externality is double marginalization. Double marginalization occurs when both the upstream and downstream firms have monopoly power, each firm reduces output from the competitive level to the monopoly level, creating two deadweight losses. By merging the vertically integrated firm can collect one deadweight loss by setting the upstream firms output to the competitive level. This increases profits and consumer surplus. A merger that creates a vertically integrated firm can be profitable.However, on average and across the most commonly studied variables, acquiring firms’financial performance does not positively change as a function of their acquisitionactivity. Therefore, additional motives for merger and acquisiiton that may not addshareholder value include: • Diversification: While this may hedge a company against a downturn in an individual industry it fails to deliver value, since it is possible for individual shareholders to achieve the same hedge by diversifying their portfolios at a much lower cost than those associated with a merger. • Managers hubris: managers overconfidence about expected synergies from M&A which results in overpayment for the target company. • Empire building: Managers have larger companies to manage and hence more power. • Managers compensation: In the past, certain executive management teams had their payout based on the total amount of profit of the company, instead of the profit per share, which would give the team a perverse incentive to buy companies to increase the total profit while decreasing the profit per share (which hurts the owners of the company, the shareholders); although some empirical studies show that compensation is linked to profitability rather than mere profits of the company.
Effects on managementA study published in the July/August 2008 issue of the Journal of Business Strategysuggests that mergers and acquisitions destroy leadership continuity in target companies’top management teams for at least a decade following a deal. The study found that targetcompanies lose 21 percent of their executives each year for at least 10 years following anacquisition – more than double the turnover experienced in non-merged firms.M&A marketplace difficulties This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unverifiable material may be challenged and removed. (December 2007)No marketplace currently exists in many states for the mergers and acquisitions ofprivately owned small to mid-sized companies. Market participants often wish tomaintain a level of secrecy about their efforts to buy or sell such companies. Theirconcern for secrecy usually arises from the possible negative reactions a companysemployees, bankers, suppliers, customers and others might have if the effort or interest toseek a transaction were to become known. This need for secrecy has thus far thwarted theemergence of a public forum or marketplace to serve as a clearinghouse for this largevolume of business. In some states, a Multiple Listing Service (MLS) of small businessesfor sale is maintained by organizations such as Business Brokers of Florida (BBF).Another MLS is maintained by International Business Brokers Association (IBBA).At present, the process by which a company is bought or sold can prove difficult, slowand expensive. A transaction typically requires six to nine months and involves manysteps. Locating parties with whom to conduct a transaction forms one step in the overallprocess and perhaps the most difficult one. Qualified and interested buyers ofmultimillion dollar corporations are hard to find. Even more difficulties attend bringing anumber of potential buyers forward simultaneously during negotiations. Potentialacquirers in an industry simply cannot effectively "monitor" the economy at large foracquisition opportunities even though some may fit well within their companysoperations or plans.An industry of professional "middlemen" (known variously as intermediaries, businessbrokers, and investment bankers) exists to facilitate M&A transactions. Theseprofessionals do not provide their services cheaply and generally resort to previously-established personal contacts, direct-calling campaigns, and placing advertisements invarious media. In servicing their clients they attempt to create a one-time market for aone-time transaction. Stock purchase or merger transactions involve securities andrequire that these "middlemen" be licensed broker dealers under FINRA (SEC) in orderto be compensated as a % of the deal. Generally speaking, an unlicensed middleman maybe compensated on an asset purchase without being licensed. Many, but not all,transactions use intermediaries on one or both sides. Despite best intentions,intermediaries can operate inefficiently because of the slow and limiting nature of having
to rely heavily on telephone communications. Many phone calls fail to contact with theintended party. Busy executives tend to be impatient when dealing with sales callsconcerning opportunities in which they have no interest. These marketing problemstypify any private negotiated markets. Due to these problems and other problems likethese, brokers who deal with small to mid-sized companies often deal with much morestrenuous conditions than other business brokers. Mid-sized business brokers have anaverage life-span of only 12-18 months and usually never grow beyond 1 or 2 employees.Exceptions to this are few and far between. Some of these exceptions include TheSundial Group, Geneva Business Services and Robbinex.The market inefficiencies can prove detrimental for this important sector of the economy.Beyond the intermediaries high fees, the current process for mergers and acquisitions hasthe effect of causing private companies to initially sell their shares at a significantdiscount relative to what the same company might sell for were it already publicly traded.An important and large sector of the entire economy is held back by the difficulty inconducting corporate M&A (and also in raising equity or debt capital). Furthermore, it islikely that since privately held companies are so difficult to sell they are not sold as oftenas they might or should be.Previous attempts to streamline the M&A process through computers have failed tosucceed on a large scale because they have provided mere "bulletin boards" - staticinformation that advertises one firms opportunities. Users must still seek other sourcesfor opportunities just as if the bulletin board were not electronic. A multiple listingsservice concept was previously not used due to the need for confidentiality but there arecurrently several in operation. The most significant of these are run by the CaliforniaAssociation of Business Brokers (CABB) and the International Business BrokersAssociation (IBBA) These organizations have effectivily created a type of virtual marketwithout compromising the confidentiality of parties involved and without theunauthorized release of information.One part of the M&A process which can be improved significantly using networkedcomputers is the improved access to "data rooms" during the due diligence processhowever only for larger transactions. For the purposes of small-medium sized business,these datarooms serve no purpose and are generally not used. Reasons for frequent failureof M&A was analyzed by Thomas Straub in "Reasons for frequent failure in mergers andacquisitions - a comprehensive analysis", DUV Gabler Edition, 2007.The Great Merger MovementThe Great Merger Movement was a predominantly U.S. business phenomenon thathappened from 1895 to 1905. During this time, small firms with little market shareconsolidated with similar firms to form large, powerful institutions that dominated theirmarkets. It is estimated that more than 1,800 of these firms disappeared intoconsolidations, many of which acquired substantial shares of the markets in which theyoperated. The vehicle used were so-called trusts. To truly understand how large thismovement was—in 1900 the value of firms acquired in mergers was 20% of GDP. In
1990 the value was only 3% and from 1998–2000 is was around 10–11% of GDP.Organizations that commanded the greatest share of the market in 1905 saw thatcommand disintegrate by 1929 as smaller competitors joined forces with each other.However, there were companies that merged during this time such as DuPont, Nabisco,US Steel, and General Electric that have been able to keep their dominance in theirrespected sectors today due to growing technological advances of their products, patents,and brand recognition by their customers. These companies that merged wereconsistently mass producers of homogeneous goods that could exploit the efficiencies oflarge volume production. Companies which had specific fine products, like fine writingpaper, earned their profits on high margin rather than volume and took no part in GreatMerger Movement.Short-run factorsOne of the major short run factors that sparked in The Great Merger Movement was thedesire to keep prices high. That is, with many firms in a market, supply of the productremains high. During the panic of 1893, the demand declined. When demand for the goodfalls, as illustrated by the classic supply and demand model, prices are driven down. Toavoid this decline in prices, firms found it profitable to collude and manipulate supply tocounter any changes in demand for the good. This type of cooperation led to widespreadhorizontal integration amongst firms of the era. Focusing on mass production allowedfirms to reduce unit costs to a much lower rate. These firms usually were capital-intensive and had high fixed costs. Because new machines were mostly financed throughbonds, interest payments on bonds were high followed by the panic of 1893, yet no firmwas willing to accept quantity reduction during this period.Long-run factorsIn the long run, due to the desire to keep costs low, it was advantageous for firms tomerge and reduce their transportation costs thus producing and transporting from onelocation rather than various sites of different companies as in the past. This resulted inshipment directly to market from this one location. In addition, technological changesprior to the merger movement within companies increased the efficient size of plants withcapital intensive assembly lines allowing for economies of scale. Thus improvedtechnology and transportation were forerunners to the Great Merger Movement. In partdue to competitors as mentioned above, and in part due to the government, however,many of these initially successful mergers were eventually dismantled. The U.S.government passed the Sherman Act in 1890, setting rules against price fixing andmonopolies. Starting in the 1890s with such cases as U.S. versus Addyston Pipe and SteelCo., the courts attacked large companies for strategizing with others or within their owncompanies to maximize profits. Price fixing with competitors created a greater incentivefor companies to unite and merge under one name so that they were not competitorsanymore and technically not price fixing.Cross-border M&A
In a study conducted in 2000 by Lehman Brothers, it was found that, on average, largeM&A deals cause the domestic currency of the target corporation to appreciate by 1%relative to the acquirers. For every $1-billion deal, the currency of the target corporationincreased in value by 0.5%. More specifically, the report found that in the periodimmediately after the deal is announced, there is generally a strong upward movement inthe target corporations domestic currency (relative to the acquirers currency). Fifty daysafter the announcement, the target currency is then, on average, 1% stronger.The rise of globalization has exponentially increased the market for cross border M&A.In 1996 alone there were over 2000 cross border transactions worth a total ofapproximately $256 billion. This rapid increase has taken many M&A firms by surprisebecause the majority of them never had to consider acquiring the capabilities or skillsrequired to effectively handle this kind of transaction. In the past, the markets lack ofsignificance and a more strictly national mindset prevented the vast majority of small andmid-sized companies from considering cross border intermediation as an option whichleft M&A firms inexperienced in this field. This same reason also prevented thedevelopment of any extensive academic works on the subject.Due to the complicated nature of cross border M&A, the vast majority of cross borderactions have unsuccessful results. Cross border intermediation has many more levels ofcomplexity to it then regular intermediation seeing as corporate governance, the power ofthe average employee, company regulations, political factors customer expectations, andcountries culture are all crucial factors that could spoil the transaction. However, withthe weak dollar in the U.S. and soft economies in a number of countries around theworld, we are seeing more cross-border bargain hunting as top companies seek to expandtheir global footprint and become more agile at creating high-performing businesses andcultures across national boundaries.Even mergers of companies with headquarters in the same country are very much of thistype (cross-border Mergers). After all,when Boeing acquires McDonnell Douglas, thetwo American companies must integrate operations in dozens of countries around theworld. This is just as true for other supposedly "single country" mergers, such as the $27billion dollar merger of Swiss drug makers Sandoz and Ciba-Geigy (now Novartis). Sovereign Wealth Funds set up a shared corporateacquisitions databaseA number of western government officials are expressing concern over the commercialinformation for corporate acquisitions being sourced by sovereign governments & stateenterprises.An ad hoc group of SWF Investment Directors and Managers have now established adatabase called SWF Investments and this database provides shared acquisitioninformation to the SWFs.
The SWF website is restricted and it states: "SWF Investments are a resource which hasbeen established by a number of sovereign wealth funds and state enterprises to produceacquisition and investment databases and forecasting tools for potential acquisitiontargets. Subscription to SWF Investments is by invitation only, and is restricted togovernment organisations or state enterprises." The database seems to be initially concentrating on London Stock Exchange listedcompanies; however it is believed that the database will in a matter of weeks be extendedto include all the companies listed on the stock exchanges of most of the developedcountries.Western government are now in a difficult position, as public opinion and the tradesunions prefer the protection and domestic ownership of national companies, however thereality of the present economic situation suggests that an injection of capital into many ofthe target company may in fact save those companies from bankruptcy.Major M&A in the 1990sTop 10 M&A deals worldwide by value (in mil. USD) from 1990 to 1999: Transaction value (in mil.Rank Year Purchaser Purchased USD) Vodafone Airtouch 1 1999 Mannesmann 183,000 PLC 2 1999 Pfizer Warner-Lambert 90,000 3 1998 Exxon Mobil 77,200 4 1999 Citicorp Travelers Group 73,000 5 1999 SBC Communications Ameritech Corporation 63,000 AirTouch 6 1999 Vodafone Group 60,000 Communications  7 1998 Bell Atlantic GTE 53,360 8 1998 BP Amoco 53,000 9 1999 Qwest Communications US WEST 48,000 10 1997 Worldcom MCI Communications 42,000Major M&A from 2000 to presentTop 9 M&A deals worldwide by value (in mil. USD) since 2000: Transaction value (inRank Year Purchaser Purchased mil. USD) Fusion: America Online 1 2000 Time Warner 164,747 Inc. (AOL) 2 2000 Glaxo Wellcome Plc. SmithKline Beecham 75,961
Plc. Shell Transport & 3 2004 Royal Dutch Petroleum Co. 74,559 Trading Co 4 2006 AT&T Inc. BellSouth Corporation 72,671 AT&T Broadband & 5 2001 Comcast Corporation 72,041 Internet Svcs 6 2004 Sanofi-Synthelabo SA Aventis SA 60,243 Spin-off: Nortel Networks 7 2000 59,974 Corporation 8 2002 Pfizer Inc. Pharmacia Corporation 59,515  9 2004 JP Morgan Chase & Co Bank One Corp 58,761 This article or section includes a list of references or external links, but its sources remain unclear because it has insufficient inline citations. You can improve this article by introducing more precise citations where appropriate. (July 2008)Environmental ethics is the part of environmental philosophy which considers theethical relationship between human beings and the natural environment. It exertsinfluence on a large range of disciplines including law, sociology, theology,economics, ecology and geography.There are many ethical decisions that human beings make with respect to theenvironment. For example: • Should we continue to clear cut forests for the sake of human consumption? • Should we continue to propagate? • Should we continue to make gasoline powered vehicles? • What environmental obligations do we need to keep for future generations? • Is it right for humans to knowingly cause the extinction of a species for the convenience of humanity?The academic field of environmental ethics grew up in response to the work of scientistssuch as Rachel Carson and events such as the first Earth Day in 1970, when
environmentalists started urging philosophers to consider the philosophical aspects ofenvironmental problems. Two papers published in Science had a crucial impact: LynnWhites "The Historical Roots of our Ecologic Crisis" (March 1967) and GarrettHardins "The Tragedy of the Commons" (December 1968). Also influential was GarettHardins later essay called "Exploring New Ethics for Survival", as well as an essay byAldo Leopold in his A Sand County Almanac, called "The Land Ethic," in which Leopoldexplicitly claimed that the roots of the ecological crisis were philosophical (1949).The first international academic journals in this field emerged from North America in thelate 1970s and early 1980s – the US-based journal, Environmental Ethics in 1979 and theCanadian based journal The Trumpeter: Journal of Ecosophy in 1983. The first Britishbased journal of this kind, Environmental Values, was launched in 1992.• Marshalls categories of environmental ethicsThere have been many attempts to categorize the different attempts to justify theimportance of the preservation of the environment. Alan Marshall and Michael Smith aretwo recent examples of this, as cited by Peter Vardy in "The Puzzle of Ethics". ForMarshall, three general ethical approaches have emerged over the last 20 years. Marshalluses the following terms to describe them: Libertarian Extension, the Ecologic Extensionand Conservation Ethics.(For more on Marshalls environmental ethics, see also: A. Marshall, 2002, The Unity ofNature, Imperial College Press: London. Alan Marshall is currently at Curtin Universityof Technology).Libertarian extensionMarshall’s Libertarian extension echoes a civil liberty approach (i.e. a commitment toextend equal rights to all members of a community). In environmentalism, though, thecommunity is generally thought to consist of non-humans as well as humans.Andrew Brennan was an advocate of ecologic humanism (eco-humanism), the argumentthat all ontological entities, animate and in-animate, can be given ethical worth purely onthe basis that they exist. The work of Arne Næss and his collaborator Sessions also fallsunder the libertarian extension, although they preferred the term "deep ecology." Deepecology is the argument for the intrinsic value or inherent worth of the environment – theview that it is valuable in itself. Their argument, incidentally, falls under both thelibertarian extension and the ecologic extension.Peter Singers work can be categorized under Marshalls ecologic extension. He reasonedthat the "expanding circle of moral worth" should be redrawn to include the rights of non-human animals, and to not do so would be guilty of speciesism. Singer found it difficultto accept the argument from intrinsic worth of a-biotic or "non-sentient" (non-conscious)
entities, and concluded in his first edition of "Practical Ethics" that they should not beincluded in the expanding circle of moral worth. This approach is essentially then, bio-centric. However, in a later edition of "Practical Ethics" after the work of Naess andSessions, Singer admits that, although unconvinced by deep ecology, the argument fromintrinsic value of non-sentient entities is plausible, but at best problematic. We shall seelater that Singer actually advocated a humanist ethic.....Ecologic extensionAlan Marshalls ecologic extension places emphasis not on human rights but on therecognition of the fundamental interdependence of all biological and abiological entitiesand their essential diversity. Where as Libertarian Extension can be thought of as flowingfrom a political reflection of the natural world, Ecologic Extension is best thought of as ascientific reflection of the natural world. Ecological Extension is roughly the sameclassification of Smith’s eco-holism, and it argues for the intrinsic value inherent incollective ecological entities like ecosystems or the global environment as a whole entity.This category includes James Lovelocks Gaia hypothesis; the theory that the planet earthalters its geo-physiological structure over time in order to ensure the continuation of anequilibrium of evolving organic and inorganic matter. The planet is characterized as aunified, holistic entity with ethical worth of which the human race is of no particularsignificance in the long run.Who knows.Conservation ethicsMarshalls conservation ethics looks only at the worth of the environment in terms of itsutility or usefulness to humans. It is the opposite of deep ecology, hence is often referredto as shallow ecology, and argues for the preservation of the environment on the basisthat it has extrinsic value – instrumental to the welfare of human beings. Conservation istherefore a means to an end and purely concerned with mankind and intergenerationalconsiderations. It could be argued that it is this ethic that formed the underlyingarguments proposed by Governments at the Kyoto summit in 1997 and three agreementsreached in Rio in 1992.Humanist theoriesFollowing the bio-centric and eco-holist theory distinctions, Michael Smith furtherclassifies Humanist theories as those that require a set of criteria for moral status andethical worth, such as sentience. This applies to the work of Peter Singer whoadvocated a hierarchy of value similar to the one devised by Aristotle which relies on theability to reason. This was Singers solution to the problem that arises when attempting todetermine the interests of a non-sentient entity such as a garden weed.
Singer also advocated the preservation of "world heritage sites," unspoilt parts of theworld that acquire a "scarcity value" as they diminish over time. Their preservation is abequest for future generations as they have been inherited from our ancestors and shouldbe passed down to future generations so they can have the opportunity to decide whetherto enjoy unspoilt countryside or an entirely urban landscape. A good example of a worldheritage site would be the tropical rainforest, a very specialist ecosystem or climaticclimax vegetation that has taken centuries to evolve. Clearing the rainforest for farmlandoften fails due to soil conditions, and once destroyed can never be replaced. Anthropocentrism Main article: AnthropocentrismAnthropocentrism simply places humans at the centre of the universe; the human racemust always be its own primary concern. It has become customary in the Westerntradition to consider only our species when considering the environmental ethics of asituation. Therefore, everything else in existence should be evaluated in terms of itsutility for us, thus committing speciesism. All environmental studies should include anassessment of the intrinsic value of non-human beings. What Anthropocentric theories do not allow for is the fact that a system of ethicsformulated from a human perspective may not be entirely accurate; humans are notnecessarily the centre of reality. The philosopher Baruch Spinoza argued that we tend toassess things wrongly in terms of their usefulness to us. Spinoza reasoned thatif we were to look at things objectively we would discover that everything in the universehas a unique value. Likewise, it is possible that a human-centred oranthropocentric/androcentric ethic is not an accurate depiction of reality, and there is abigger picture that we may or may not be able to understand from a human perspective.Peter Vardy distinguished between two types of anthropocentrism. A strongthesis anthropocentric ethic argues that humans are at the center of reality and it is rightfor them to be so. Weak anthropocentrism, however, argues that reality can only beinterpreted from a human point of view, thus humans have to be at the centre of reality asthey see it. Status of the fieldEnvironmental ethics became a subject of sustained academic philosophic reflection inthe 1970s. Throughout the 1980s it remained marginalized within the discipline ofphilosophy, attracting the attention of a fairly small group of thinkers spread across theEnglish speaking world.Only after 1990 did the field gain institutional recognition at programs such as ColoradoState, the University of Montana, Bowling Green State, and the University of North
Texas. In 1991, Schumacher College of Dartington, England, was founded and nowprovides an MSc in Holistic Science.These programs began to offer a masters degree with a specialty in environmental ethics/ philosophy. Beginning in 2005 the Dept of Philosophy and Religion Studies at theUniversity of North Texas offered a PhD program with a concentration in environmental ethics/philosophy.General Agreement on Tariffs and TradeThe General Agreement on Tariffs and Trade (typically abbreviated GATT) was theoutcome of the failure of negotiating governments to create the International TradeOrganization (ITO). The Bretton Woods Conference had introduced the idea for anorganization to regulate trade as part of a larger plan for economic recovery after WorldWar II. As governments negotiated the ITO, 15 negotiating states began parallelnegotiations for the GATT as a way to attain early tariff reductions. Once the ITO failedin 1950, only the GATT agreement was left. The GATTs main objective was thereduction of barriers to international trade. This was achieved through the reduction oftariff barriers, quantitative restrictions and subsidies on trade through a series ofagreements. The GATT was a treaty, not an organization. The functions of the GATTwere taken over by the World Trade Organization which was established during the finalround of negotiations in early 1990s.The history of the GATT can be divided into three phases: the first, from 1947 until theTorquay Round, largely concerned which commodities would be covered by theagreement and freezing existing tariff levels. A second phase, encompassing threerounds, from 1959 to 1979, focused on reducing tariffs. The third phase, consisting onlyof the Uruguay Round from 1986 to 1994, extended the agreement fully to new areassuch as intellectual property, services, capital, and agriculture. Out of this round theWTO was born.GATT signatories occasionally negotiated new trade agreements that all countries wouldenter into. Each set of agreements was called a round. In general, each agreement boundmembers to reduce certain tariffs. Usually this would include many special-casetreatments of individual products, with exceptions or modifications for each country.InceptionThe precursor organization to the GATT, called the International Trade Organization(ITO), was first proposed in February 1946 by the United Nations Economic and SocialCouncil.  The negotiating countries of the ITO began parallel negotiations for theGATT as a way to introduce early tariff cuts. The plan called for the ITO to take controlover GATT, once the ITO was finalized. Owing to the United States failing to implementthe ITO, GATT was the only organization left. On 1 January, 1948 the agreement was
signed by 23 countries: Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile,China, Cuba, the Czechoslovak Republic, France, India, Lebanon, Luxembourg,Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia, Syria, South Africa,the United Kingdom, and the United States. According to GATTs own estimates, thenegotiations created 123 agreements that covered 45,000 tariff items that related toapproximately one-half of world trade or $10 billion in trade.  GATT 1947 in the USThe GATT, as an international agreement, is a treaty. Under United States law it isclassified as a congressional-executive agreement. Based on the Reciprocal TradeAgreements Act it allowed the executive branch negotiating power over trade agreementswith temporary authority from Congress. At the time it functioned as a provisional, butpromising trade system. The agreement is based on the "unconditional most favorednation principle" This means that the conditions applied to the most favored tradingnation (i.e. the one with the least restrictions) apply to all trading nations. In the US, therewas large opposition against the International Trade Organization (which had beenratified in several countries), and thus President Truman never even submitted it to theCongress. RoundsGATT held a total of 8 rounds. [hide]GATT and WTO trade rounds Subjects Name Start Duration Countries Achievements covered Signing of GATT, 45,000 tariff Geneva April 1947 7 months 23 Tariffs concessions affecting $10 billion of trade Countries exchanged Annecy April 1949 5 months 13 Tariffs some 5,000 tariff concessions Countries exchanged some 8,700 September tariffTorquay 8 months 38 Tariffs 1950 concessions, cutting the 1948 tariff levels by 25%Geneva II January 1956 5 months 26 Tariffs, $2.5 billion in
admission of tariff Japan reductions Tariff concessions September Dillon 11 months 26 Tariffs worth $4.9 1960 billion of world trade Tariff concessions Tariffs, Anti-Kennedy May 1964 37 months 62 worth $40 dumping billion of world trade Tariff Tariffs, non- reductions tariff September worth more Tokyo 74 months 102 measures, 1973 than $300 "framework" billion dollars agreements achieved The round led to the creation of WTO, and extended the range of trade negotiations, Tariffs, non- leading to tariff major measures, reductions in rules, tariffs (about services, 40%) and intellectual September agriculturalUruguay 87 months 123 property, 1986 subsidies, an dispute agreement to settlement, allow full textiles, access for agriculture, textiles and creation of clothing from WTO, etc developing countries, and an extension of intellectual property rights. Doha November ? 141 Tariffs, non- The round is 2001 tariff not yet measures, concluded. agriculture, labor standards, environment, competition,
investment, transparency, patents etc Annecy Round - 1950The second round took place in 1949 in Annecy, France. 13 countries took part in theround. The main focus of the talks was more tariff reductions, around 5000 total. Torquay Round - 1951The third round occurred in Torquay, England in 1951. 38 countries took part in theround. 8,700 tariff concessions were made totaling the remaining amount of tariffs tothree-fourths of the tariffs which were in effect in 1948. Geneva Round - 1955-1956The fourth round returned to Geneva in 1955 and lasted until May 1956. 26 countriestook part in the round. $2.5 billion in tariffs were eliminated or reduced. Dillon Round - 1960-1962The fifth round occurred once more in Geneva and lasted from 1960 to 1962. The talkswere named after U.S. Treasury Secretary and former Under Secretary of State, DouglasDillon, who first proposed the talks. 26 countries took part in the round. Along withreducing over $4.9 billion in tariffs, it also yielded discussion relating to the creation ofthe European Economic Community (EEC). Kennedy Round - 1964-1967The sixth round was the last to take place in Geneva from 1964 until 1967 and wasnamed after the late US President Kennedy in his memory. 62 countries took part in theround. Concessions were made on $40 billion worth of tariffs. Some of the GATTnegotiation rules were also more clearly defined. Tokyo Round - 1973-1979Reduced tariffs and established new regulations aimed at controlling the proliferation ofnon-tariff barriers and voluntary export restrictions. 102 countries countries took part inthe round. Concessions were made on $190 billion worth. Uruguay Round - 1986-1993The Uruguay Round began in 1986. It was the most ambitious round to date, hoping toexpand the competence of the GATT to important new areas such as services, capital,intellectual property, textiles, and agriculture. 123 countries took part in the round.
Agriculture was essentially exempted from previous agreements as it was given specialstatus in the areas of import quotas and export subsidies, with only mild caveats.However, by the time of the Uruguay round, many countries considered the exception ofagriculture to be sufficiently glaring that they refused to sign a new deal without somemovement on agricultural products. These fourteen countries came to be known as the"Cairns Group", and included mostly small and medium sized agricultural exporters suchas Australia, Brazil, Canada, Indonesia, and New Zealand.The Agreement on Agriculture of the Uruguay Round continues to be the mostsubstantial trade liberalization agreement in agricultural products in the history of tradenegotiations. The goals of the agreement were to improve market access for agriculturalproducts, reduce domestic support of agriculture in the form of price-distorting subsidiesand quotas, eliminate over time export subsidies on agricultural products and toharmonize to the extent possible sanitary and phystosanitary measures between membercountries. GATT and the World Trade Organization Main article: Uruguay RoundIn 1993 the GATT was updated (GATT 1994) to include new obligations upon itssignatories. One of the most significant changes was the creation of the World TradeOrganization (WTO). The 75 existing GATT members and the European Communitiesbecame the founding members of the WTO on 1 January 1995. The other 52 GATTmembers rejoined the WTO in the following two years (the last being Congo in 1997).Since the founding of the WTO, 21 new non-GATT members have joined and 29 arecurrently negotiating membership. As of October 2007, there were a total of 151 membercountries in the WTO.Of the original GATT members, only the SFR Yugoslavia has not rejoined the WTO.Since FR Yugoslavia, (renamed to Serbia and Montenegro and with membershipnegotiations later split in two), is not recognised as a direct SFRY successor state;therefore, its application is considered a new (non-GATT) one. The contracting partieswho founded the WTO ended official agreement of the "GATT 1947" terms on 31December, 1995.Whereas GATT was a set of rules agreed upon by nations, the WTO is an institutionalbody. The WTO expanded its scope from traded goods to trade within the service sectorand intellectual property rights. Although it was designed to serve multilateralagreements, during several rounds of GATT negotiations (particularly the Tokyo Round)plurilateral agreements created selective trading and caused fragmentation amongmembers. WTO arrangements are generally a multilateral agreement settlementmechanism of GATT. The debatable issue is recognition of human rights under GATT.Biodiversity and International Trade
The trade-related work under the Convention captures the different aspects of the complexrelationship between international trade and the objectives and provisions of theConvention. • The production of value-added goods and services derived from biodiversity, both for domestic and for international markets (“Biotrade”) may generate incentives for the conservation and sustainable use of biodiversity. Accordingly, a number of thematic programmes of work under the Convention call for the increased marketing of products derived from sustainable use, and the Secretariat is cooperating closely with the Biotrade Initiative of the United Nations Conference on Trade and Development (UNCTAD) to advance biotrade promotion (see pages on market creation for further information). • The Conference of the Parties adopted a provisional framework of goals and targets to enhance the evaluation of achievements and progress in the implementation of the Strategic Plan of the Convention. Target 4.3 of this framework calls for no species of wild flora and fauna to be endangered by international trade. The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) is the key partner in implementing this target, and both Conventions are cooperating closely to implement this target, including through the liaison group of biodiversity-related Conventions. • While the Convention on Biological Diversity does not require measures that are directly related to international trade, there is a close relationship between many of its provisions – as well as those of its Biosafety Protocol – and the multilateral rules and provisions of the World Trade Organization (WTO). For instance, the Parties to the Convention have emphasized the interrelationship between the Convention and the provisions of the WTO’s Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs), and the need to further explore this interrelationship. Similarly, Parties have underlined the relationship between the Biosafety Protocol and the provisions of the WTO Agreements on Technical Barriers to Trade (TBT) and Application of Sanitary and Phytosanitary Measures (SPS). Accordingly, the Conference of the Parties requested the Executive Secretary to closely interact and cooperate with the relevant Committees of the WTO as well as with its Secretariat on these issues of mutual interest, and to also examine the impact of trade liberalization on biodiversity.