O R I G I N A L P A P E R Managerial Preferences in Relation to Financial Indicators Regarding the Mitigation of Global Change Josef Maroušek • Simona Hašková • Robert Zeman • Radka Vanı́čková Received: 3 February 2014 / Accepted: 11 March 2014 / Published online: 20 March 2014 � Springer Science+Business Media Dordrecht 2014 Abstract Biochar is a soil—improving substrate made from phytomass pyrolysis. In Southeast Asia, its application decreases due to the long-term growth of biochar cost and thus caused further prolongation of the payback period. In the Euro-American civilization the biochar application is already almost forgotten once it has been much earlier recognized that the crop yields can be increased much faster with higher doses of nutrients and other agrochemicals. The payback period can be expected in decades. Such a long-time investment into soil fertility raises also many ethical questions. The final decision combines issues of social responsibility, risk and other financial indi- cators as well as personal preferences and more. The attitudes of Western and Central European decision makers in the agriculture business segment were analyzed on the basis of electronic questionnaire survey and a subsequent interview through their local unions. According to the data, most of them did not know about the possibilities of a more environmentally friendly approach to soil enhancement based on the addition of a fertilizer in the form of biochar. Among others, the collected data also shows that the decision makers from Western Europe have a much different ethical approach to the land and financial indicators than the Central Europeans. Keywords Biochar � Financial indicators � Discounted payback period � Net present value Introduction Although we can not take the evidence from a scientific point of view to be sufficient, it is assumed that the Amazonian Indians applied biochar (called as black soil) to increase J. Maroušek (&) � S. Hašková � R. Zeman � R. Vanı́čková The Institute of Technology and Businesses in České Budějovice, Okružnı́ 517/10, 370 01 České Budějovice, Czech Republic e-mail: [email protected] 123 Sci Eng Ethics (2015) 21:203–207 DOI 10.1007/s11948-014-9531-2 the soil fertility more than a thousand years ago. Ancient Japanese text refers to biochar (called fire manure) in 1697 (Lehmann and Joseph 2009). The positive effects of the biochar were evidently observed a long time ago. However, its complex relationships between production technology design and the parameters obtained as well as soil interactions and the relation to the phytomass yields are a subject of many recent studies (Lehman et al. 2006, 2011; Atkinson et al. 2010; Sohi et al. 2010). Interconnecting the conclusions of these robust reviews it may be summarized that the mechanism that underlies the efficacy of the biochar is strongly connected with the microporosity which provides a high surface area to .

1. O R I G I N A L P A P E R
Managerial Preferences in Relation to Financial
Indicators Regarding the Mitigation of Global Change
Josef Maroušek • Simona Hašková • Robert Zeman •
Radka Vanı́čková
Received: 3 February 2014 / Accepted: 11 March 2014 /
Published online: 20 March 2014
� Springer Science+Business Media Dordrecht 2014
Abstract Biochar is a soil—improving substrate made from
phytomass pyrolysis. In
Southeast Asia, its application decreases due to the long-term
growth of biochar cost
and thus caused further prolongation of the payback period. In
the Euro-American
civilization the biochar application is already almost forgotten
once it has been much
earlier recognized that the crop yields can be increased much
faster with higher doses
of nutrients and other agrochemicals. The payback period can be
expected in decades.
Such a long-time investment into soil fertility raises also many

2. ethical questions. The
final decision combines issues of social responsibility, risk and
other financial indi-
cators as well as personal preferences and more. The attitudes
of Western and Central
European decision makers in the agriculture business segment
were analyzed on the
basis of electronic questionnaire survey and a subsequent
interview through their local
unions. According to the data, most of them did not know about
the possibilities of a
more environmentally friendly approach to soil enhancement
based on the addition of
a fertilizer in the form of biochar. Among others, the collected
data also shows that the
decision makers from Western Europe have a much different
ethical approach to the
land and financial indicators than the Central Europeans.
Keywords Biochar � Financial indicators � Discounted
payback period �
Net present value
Introduction
Although we can not take the evidence from a scientific point of
view to be sufficient, it

3. is assumed that the Amazonian Indians applied biochar (called
as black soil) to increase
J. Maroušek (&) � S. Hašková � R. Zeman � R. Vanı́čková
The Institute of Technology and Businesses in České
Budějovice, Okružnı́ 517/10,
370 01 České Budějovice, Czech Republic
e-mail: [email protected]
123
Sci Eng Ethics (2015) 21:203–207
DOI 10.1007/s11948-014-9531-2
the soil fertility more than a thousand years ago. Ancient
Japanese text refers to biochar
(called fire manure) in 1697 (Lehmann and Joseph 2009). The
positive effects of the
biochar were evidently observed a long time ago. However, its
complex relationships
between production technology design and the parameters
obtained as well as soil
interactions and the relation to the phytomass yields are a
subject of many recent studies
(Lehman et al. 2006, 2011; Atkinson et al. 2010; Sohi et al.
2010). Interconnecting the

4. conclusions of these robust reviews it may be summarized that
the mechanism that
underlies the efficacy of the biochar is strongly connected with
the microporosity which
provides a high surface area to many ion—exchange reactions
binding important
nutritive anions as well as some cations. In addition, it seems
that this fine structure
probably acts as a perfect substrate for different soil micro flora
and micro animalia. It
has been repeatedly demonstrated that biochar also increases the
potential of hydrogen
(pH), cation exchange capacity (CEC) and the electrical
conductivity (EC) and these all
contribute significantly to the overall soil fertility. Production
of biochar and its storage
in soils have been suggested as a means of abating climate
change by sequestering
carbon, while simultaneously providing energy and increasing
crop yields. Biochar has
large climate change mitigation potential. In this context,
agricultural and food ethics
(and adjacent fields) once again need to address well known,
but aggravated ‘‘old’’

5. problems. These are among others, desertification, boosted by
temperature increase,
changing precipitation regimes, unsustainable and/or unfair
land—use and water
regimes, pressure on arable land due to the loss of coastal areas,
soil degradation and
suburban sprawl, and the strain placed on both the environment
and animal welfare as a
consequence of a growing worldwide demand for animal
products. Furthermore, the
promise of new technologies to pave the way towards
sustainable food production and
food security needs to examined critically and evaluated
ethically. Certain consumption
patterns may become more and more unbearable in the light of
the need for global
sustainability. All these phenomena and their manifold socio—
economic implications
for justice and fairness need to be investigated and reflected on
from ethical perspectives
(Potthast and Meisch 2012). All of these advantages were
multiplied when it was
recommended to produce the biochar from waste while taking
advantage of the waste

6. heat (Maroušek 2013a, b). However, this promising technology
is still under
development to a commercial scale.
The negative effects of long—term or intensive use of
agrochemicals has been known
for decades. Very high rates of nitrogen fertilizer application
caused a marked reduction
of alkali saturation in the soil, the exchangeable base cations
followed the nitrate in a
similar way (Tamm and Popović 1974). Based on the above
indicated advantages of
biochar application and disadvantages of the conventional
application of agrochemicals
the question arose: what prevents the extension of biochar to a
commercial scale? A
hypothesis was proposed that the expansion is associated with
financial indicators,
which some decision makers may consider negative in a short–
term.
Materials and Methods
The economical point of view was assessed by standardized
financial methods. The
discounted payback period (DPP) and the net present value

7. (NPV) were set as the
204 J. Maroušek et al.
123
main criteria (Weingartner 1969; White et al. 1989; Lefley
1996). To make the
calculations possible it was presumed that the effect obtained by
the application of
biochar will take at least 40 years, which is in a good agreement
with findings in the
reviewed literature (Lehmann and Joseph 2009). The interest
rate, the last remaining
value for the calculations, was taken from data of the local
national banks (France,
Germany, Austria, Czech, Slovakia and Poland). A sample of 20
tons of high quality
biochar (144 m
2
g
-1
, 1,106 meq
?
kg

8. -1
, pH = 8.11, 350 USD.t
-1 & 260 EUR.t-1)
was given as a gift to 4 French, 17 German, 5 Austrian, 10
Czech, 5 Slovak and 4
Polish decision makers in the agriculture business. It was
recommended to apply this
dosage per 1 ha (&2.5 acre) of moderate soil balanced to pH = 6
and to perform the
trials using maize for silage. The total amount of converted
nutrients was as following:
110 kg N (&242.5 lb), 45 kg P2O5 (&99.2 lb), 70 kg K2O
(&154.3 lb). At the same
time the experiment was carried out on an untreated blank
control. The overall
detailed methodology of agricultural engineering and soil
science was in the
management of personnel of the Biological Centre of Academy
of Sciences, Czech
Republic and it is a subject of a paper yet to be published.
The survey questionnaire included the following questions:
1. Do you have any previous experience with the application of
biochar?
2. Do you know anybody who had experience with the
application of biochar?

9. 3. Did you hear about any research in the field of biochar?
4. Did you face any limitations or technical troubles with the
application of the
biochar?
5. Are you afraid of any side effects which may negatively
influence the soil?
6. Would you invest in soil improvement if the payback period
was longer than
20 years?
7. How long a payback period would you allow in order to
consider investing in
biochar?
Results and Discussion
As it was already stated in the Introduction, the application of
biochar is an old and
traditional method of soil enhancement and fertility
improvement. It is still
infrequently used in East and Southeast Asia and there are last
living witnesses in
Europe who have heard about its ancient use in vineyards. The
research presented
here did not find any decision maker in France, Germany,

10. Austria, the Czech
Republic, Slovakia or Poland who would be familiar with this in
practice or knew of
anybody doing it (Questions 1 and 2). In the light of recent
published papers
(Lehman et al. 2006, 2011; Atkinson et al. 2010; Sohi et al.
2010) it may seem as a
very curious observation. However, almost one third of the
respondents have heard
about some research in this field (Question 3). More
surprisingly, they were familiar
with some good results the scientists obtained! Further
interrogation showed that
this is because of the trials published in the literature were
performed only in
green—house scale (pot trials) or small—size field trials which
does not inspire any
confidence. In addition, the published papers did not include
any financial
Managerial Preferences in Relation to Financial Indicators 205
123
evaluations. From this viewpoint research presented herein

11. provides very important
information. Regarding Question 4, did anybody face trouble
with the application of
biochar into soil. The most common approach was to mix the
biochar with a slurry,
with mineral fertilizers or during the stubble cultivation.
Question 5, regarding the
risk of the soil inhibition divided the decision makers into two
groups. 25 of 26
(96 %) decision makers from Western Europe were afraid of a
possible risk which
may be caused by the application of the biochar. The concerns
were overcome only
because of the potentially degraded areas were relatively small.
None of Central
Europeans was afraid about that. The original assumption to
explain this
phenomenon proceeded from the view that the decision makers
from the Central
Europe are more familiar with the scientific results obtained or
are more confident.
However, further interrogation discovered that these
presumptions were wrong.
Their decision was more curiosity driven and they feel less

12. ethical responsibility for
the land. In the more profound discussion it was clear that the
ethical relationship of
Central Europeans to their land was repeatedly disturbed by
Church and State. The
payback period has been dismissed as misleading and worthless
by most recognized
economists at the same time that businessmen continue to
utilize this concept
(Weingartner 1969). While the payback period is not advocated
for capital
investment decisions, the reasons for its popularity needs to be
understood before it
is possible to discuss superior alternatives. At first, this
financial method is the
easiest to understand. Secondly, the obvious economical—
mathematical uncertain-
ties are overshadowed by global socio—economical turbulence
which make it
almost impossible to predict interest rates in a horizon of
decades. In addition, there
are also natural uncertainties caused by the nature of the
agricultural business. On
the other hand, the NPV is generally recognized as one of the

13. most accurate
mathematical instruments in financial analysis (Maroušek et al.
2012; Maroušek and
Braun 2013). The yield results achieved by the demonstration
experiments (?17 %
on average in comparison to the control trial) were consistent
with the information
presented in the literature (Lehman et al. 2006, 2011; Atkinson
et al. 2010; Sohi
et al. 2010). Regarding the economic situation of 2012/2013 and
official long-term
prospects this resulted in average DPP of 26 years. It is natural
that such a long
payback period bears a huge burden of risk. The calculations on
the NPVs clearly
indicate that the investment is reasonable and can compete with
the interest rate of
13.5 % p.a. This is from today’s perspective, almost fantastic,
but the risk connected
with the uncertainties and the long payback period must be
remembered
particularly. The 6th Question was answered naturally after this
evaluation. None
of the farmers surveyed answered that they embarked on such a

14. high investment.
The question gave average number of 6 years.
Conclusion
On the basis of the demonstration experiment, it was confirmed
that the application
of environmentally friendly biochar increases the soil fertility
by an average of
17 % after the first application. However, the financial
calculations showed that in
the current state of the economy and prices the discounted
payback period makes
206 J. Maroušek et al.
123
the investment profitable only after 26 years. It should be noted
that such a long
payback period is affected by large uncertainties not only in
economic, but also
legislative changes. It became clear that the relationship of the
Central European
decision makers to the land is more problematic than that of the
Western Europeans.

15. This is probably due to repeated land property injustice. The
entire observed group
is aware of the adverse effects of excessive use of
agrochemicals. Many agree that
the level of ethical behavior to many people can be expressed
by money. The
present study shows that in a world of turbulent economic
changes the value of
money is very relative and so it is preferable to use more
sophisticated financial
analysis which also takes into account the variability of law.
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Managerial Preferences in Relation to Financial Indicators 207
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18. Managerial Preferences in Relation to Financial Indicators
Regarding the Mitigation of Global
ChangeAbstractIntroductionMaterials and MethodsResults and
DiscussionConclusionReferences