Natural Resource Environmental Effect in Business

Example of Environmental issues Deforestation Environmental Impacts of Mining Global Warming “Tragedy of the commons”—overfishing and other

Deforestation

Deforestation Process of cutting down, burning or damaging of forests This has been going on on a large scale basis for centuries Why Farmers do this to create land for growth

Jungle burned for agriculture in southern Mexico

Logging in Malaysia.

Environmental impacts caused by deforestation Loss of biodiversity Forests are important parts of hydrologic cycle in nature

Mining

Chuquicamata, the largest open pit copper mine in the world, Chile

Environmental impacts of mining Land/soil erosion Loss of biodiversity in the area Contamination of ground waters by chemicals from the mining process and products.

Chemicals used for mining Sodium cyanide for extraction of gold Sulphuric acid for extraction of copper from copper oxides If these chemicals are not handled properly, serious environmental impacts may occur to the neighbouring environment

Global Warming

Environmental Effects of Global Warming Melting of polar ice Rising sea level Spread of pests and disease Ecological impacts (e.g. disturbed life cycle of flora-fauna)

Air pollution

Effects of Pollution Disrupt or degrade life-supporting systems for humans or other species. Can damage wildlife, human health or property. Can by a nuisance such as noise, smell, sights.

Energy Non-renewable Renewable Fisheries Fossil fuels Forest Wind Petroleum Coal Gas 7-16 Renewable Fisheries Forest Wind Waves

Energy Sources of Renewable Energy Improved technology has resulted in new support for wind energy Wind energy fastest-growing energy technology in the world 7-20

Government Control To correct market failures in case of externalities To provide Public goods

Effect Resource in Business Government regulation may bar or severely restrict potential new entrants to an industry Substitute Goods/Services That can easily replace the firm’s goods/services