LCA and policy implementation framework

LCAs are a tool for assessing the environmental impact of products. Think up four ways in which government can increase the use of LCAs through external control and setting boundary conditions. Use Sabatier’s framework to assess the potential effectiveness of external control vis-a-vis other options.

LCA is a tool for assessing potential environmental impact of a production system. It requires a large inventory in multiple stages of the life of a product, service or even a socioeconomic activity. The information available is also crucial. In an abstract manner with my understanding Life Cycle Thinking – the theoretical background of LCA would be: “Life Cycle Thinking is the idea of telling the story of the life of a product/process/activity “zooming in” every event of its life evaluating each time the environmental, social, economic impact as well as giving a macroscopic picture of the environmental, social, economic impact of the system as a whole.”

Increasing the use of LCAs taking into account the current conditions in both market and society would be a priori a challenging task with great difficulties either through external control or setting boundary conditions. In this blog entry four ways to promote LCAs will be presented and assessed in terms of policy implementation through Sabatier framework.

1. Increasing LCAs through external control: Introducing new legislative measures to oblige companies to add LCA studies on their production line in form of labelling just as ingredients, nutrition facts and toxicity hazards are placed on the products label. Since an LCA research programme as itself is not only highly specialized but also time and money consuming a time frame will have to be set for the sanctioning part of the legislation. The time frame will be set by the government, legislators and the consultants specialized on LCA and by then a monitoring body will be formed to assess the preparation for LCAs within the companies. Ultimately after the transition period, the LCA will be prerequisite for a product, service to enter the market.
2. Increasing LCAs through setting boundary conditions: Creation of Public institution either within the Environmental Agency or as an independent Research panel of highly educated personnel specialized on LCAs. This Panel or institute may:
   1. Create gradually an open source database of all LCAs already carried out for a list of products and services. In this way the diffusion of necessary information is easier.
   2. Give seminars and conferences on how to carry out a LCA on products or services. It could “train” personnel on how to conduct an LCA study and how to manage the results of such a study. Also it could give incentives to environmental consultant offices for such a specialization(LCA).
   3. Provide consultancy to companies willing to conduct such a study. In the long term it could offer experienced consultants to cooperate with companies.
   4. Provide certain LCA Certificates to Organizations that have successfully incorporated LCAs in their production lines. The institute after assessing the LCAs undergone in an organization would award it with this Certificate of Best practice really beneficial to companies striving for Legitimacy.

3. Increasing LCAs through setting boundary conditions: Subsidies offered by the government to Organizations in order to carry out LCA studies either in form of equipment (e.g. LCA software ), outsourcing (e.g. subsidized short-term contract with an LCA analyst ) etc.
4. Increasing LCAs through setting boundary conditions: The government could run a campaign informing people on Life Cycle Thinking and about potential environmental threats that can be found on various stages of the life of a product, service or a socioeconomic activity of theirs. The campaign would contribute to raising awareness on the interconnectivity of several stages of activities around one main activity or product (e.g. go and rent a movie from the local DVD store) concerning a potential environmental impact (e.g. GWP). In this way pressure may be exerted on the companies to practice LCA since the public view will be aware and probably more selective and as a result companies will have to adjust to the consumers’ demand.

Moving on to the Sabatier’s framework to analyze and assess the policy followed on increasing the LCAs, I will base my analysis on this framework depicted below.

Tractability of the problem

When analyzing the tractability of a problem one is called to give answer to a few questions such as whether there is adequate information for a well-structured technological and theoretical background. Other questions that need to be answered are about diversity of the target groups linked to the problem as well as the probable behavioral change that has to occur in them.

Firstly in this case, the technological and theoretical background either in external control or boundary conditions are the same and are considered sufficient. LCAs are already undergone in universities as well as in many sustainability consultancy offices and companies. One remark would be that in case of external control the government is required not only to find the appropriate personnel equipped with the relative know-how but also to “come up with” a sophisticated in depth legislative measures to control the use of LCA. That alone requires the most various background both technological and theoretical background of all the actions proposed here.

Secondly, the target group in case of the external control would be group of companies that have a production line around a product or a service and may potentially cause environmental impacts. In this group as the Life Cycle Thinking proposes, it is taken into account the whole system of the actors involved directly or indirectly in each event or stage all the way from cradle to death/cradle of the product/service (producers, suppliers, transport and distribution actors, users). Thus it is easily realized that the target group is really broad covering nearly the total of industrial actors. The large number of actors involved makes the problem difficult to tackle as information intensity and reliability.

In case of setting boundaries we should add the consumers-citizens group not only in the sense of users as in this case the public view is addressed and the citizens can come into play where the external control focuses on the organizational field and not directly to users.

Subsequently, the behavioral change of these target groups is a point to consider. Apart from the enormous inventory that the industrial actors would have to create, an entire network with side actors, partner would have to comply providing access to hard-to-analyze information that today is also considered highly confidential. Furthermore other changes to occur would be broader cooperatives among companies hiring extra personnel or even creation of separate departments carrying out LCA related research and specialized on providing solutions on environmental issues. In addition a possible shift could occur in the corporation culture and strategy towards relationships based on growing trust, more competitive environmental strategies etc. The change in consumers’ behavior (in setting boundary case) would change under the raise of awareness on sustainability interconnectivity towards more selective demanding habits. In other words they would gain insights on the interconnectivity between their habits, actions and choices as consumers choosing for example a brand of clothes that does not promote child labor over others or choosing a sustainable reusable cup over using single-use ones.

Ability of statute to structure implementation

In case of external control the need for new legal resources is great and complicated. For example, the availability of information exchange among the actors and ways to guarantee reliability, explicit laws on how to keep records and a specific inventory for each actor, monitoring laws in the “transition period”, fair sanctioning measures etc. At this point it is of high importance to state that in LCAs separate and unique assumptions are often required in each separate case. That could be a very tricky point for the lawmakers. At the same time for the government funding the legislation research along with the LCA experts should be a point to consider. What is more LCA studies within the companies are also largely costly (new department, LCA experts as partners (?), outsourcing (?)) and the prerequisites set from the governments should be explicit and broad enough to take into account every type and size of the actors.

On the other hand, in case of boundary conditions, the legal resources for the public institutes will be based on already existing ones, and subsidies can too be adjusted to existing subsidies related to sustainability or best practice incentives. Moreover an LCA Certificate would be a simple legislative work as it can be based on the legislative pattern of Ems and ISO. The funding here is a combination of public resources and private ones leaving much space on actors to have multiple choices and invest more freely but to a sustainable direction within the boundaries.

Non-statutory variables affecting implementation.

Here the public and media support is examined along with the commitment of the implementers and authorities and the support.

In both cases the media, policy makers’ and public concern would be high as LCA is a means to reduce environmental impacts to the source. The involvement of the “sovereigns” in external control practices is supposed to be high and more complicated and difficult (Continuous complex monitoring and sanctioning) jeopardizing a successful implementation. Nevertheless in setting boundary conditions the absence of direct control (commitment to awareness campaign, setting boundaries through institutions, providing incentives) along with high simplicity make the implementers’ involvement and commitment of not so great importance

Conclusion

To conclude, it seems to me that a combination of setting boundaries actions and the legislative state control to come into play in a later stage would be the best way to achieve increase in LCAs. Despite of high costs for both industrial actors and state and the complex nature of LCAs themselves I believe that in the short term the first action could be a gradual implementation of number [2] as initial institutional establishment and [4] as a means of information awareness of boundary conditions proposed actions above before the subsidies (no [3]). The next level in the long term would be a gradually more active legislative state interference in case the progress until then is considered poor.

NOKIA pursuing social Sustainability

Following the lecture on self-organization and on isomorphism as a process of self-organization and the documentary on NOKIA’s decision on setting Sustainability criteria assessing its Chinese supplier I am now called to find the relation between legitimacy, sustainability and the two actors of the doc ( NOKIA and Chinese supplier).

Striving for Legitimacy

The three ways to pursuit legitimacy as presented in lecture and in DiMaggio’s and Powell’s paper are:

• Coercive pressure: legislation, clients and suppliers etc may cause formal and informal pressure to a firm
• Mimicry: Copying behavior to become more accepted often stemming from uncertainty (e.g. environmental strategy)
• Normative pressure: Results from the professionalization (pressure from the authority of a University specialist for instance.)

NOKIA  

In the beginning of the documentary one can easily realize the coercive pressure put on NOKIA. In concrete words the coercive pressure stems from two facts: Firstly NOKIA is part of international funds such as DOW Jones Sustainability Group Index, that as of now, as Hanna Kaskinen highlights, have environmental and ethical analysts looking for legitimacy proofs among the participants. That, along with the prerequisites of social sustainability that certain investors begin to have, make NOKIA consider trailing back the supply chain and assess it in terms of sustainability. As a result they decide to hire a specialist consultant on assessing the supplier.

The hiring of such a consultant is an excellent example of normative pressure: The lack of specialization on a supplier assessment in terms of sustainability from the part of NOKIA made the company cooperate with the specialist consultant named Luise Jamison. The factor of uncertainty is also expressed in the first meeting at the lake chalet also in the very beginning of the documentary when it is proposed by an executive officer whether they really have to proceed in assessing the supplier in China and whether a press release about diffusing an “illusion” of sustainability would be enough. Nokia crew is clearly inexperienced and uncertain when comes to sustainability measures and they go on mimicking what other organizations in the field could do by hiring the consultant. The consultant herself may be also acting as a factor of mimicry diffusion between the firms when comes to setting sustainability criteria.

Chinese supplier

The surprising fact that the European managers of the Chinese factory who guide NOKIA sent partners are not afraid to hide is that the factory is operating outside the law set by the Chinese government. Their answer to that is that every factory operates under the same working conditions. This is a good example of mimicry among the Chinese factories.

The coercive pressure is seen from the part of NOKIA which acts as a client trying to set sustainability criteria on the Chinese factory. However, what NOKIA people confront there, is really “telling the story” of the differences between Eastern and Western culture on how a typical factory functions in terms of sustainability conditions (over hours but yet minimum wages, no labor contracts, quality of accommodation).

The normative pressure put on the supplier is obvious from the fact that hiring Western specialists on managing the production lines as top managers brings legitimacy to the factory attracting foreign investments like the one of NOKIA. I assume that can be a result of mimicry among Chinese factories also although that is not clear in the documentary. But they both (at least the ones shown on the video) came to the factory with a certain authority on their field (e.g supply chain, managing industrial units) providing knowledge and experience.

Is the approach taken by Nokia an effective way of diffusing sustainability criteria?

From my point of view, the onsite inspection and assessment of the supplier in China is not going to be effective way of diffusing sustainability criteria. The top managers there seem to be confident even if they are breaking the law maintaining such working conditions in the factory. In addition, the great differences in the two cultures along with the limited provision of important information from the part of the managers make it even harder. The truth is that even though NOKIA exerts some limited pressure being the client asking for some criteria (coercive pressure for legitimacy) the factory has already multiple supply chains and other clients as well. As a result NOKIA is not the sole exclusive client and at the same time it does not seem that NOKIA can find a more sustainable supplier there, as the Isomorphism characterizing the market of suppliers appears to be great. Consequently NOKIA does not possess any kind of authority power to exert on the supplier to meet their requirements. However moving its production sites in Europe would be detrimental due to costs of such a factory in Europe.

How could another coordination mechanism improve on this?

In the lectures we have talked about 4 coordination mechanisms:

• Self-organization
• Self-governance
• Private interest government
• Government

Having already talked about Isomorphism as a process of self-organization in organizational field the next coordination mechanism that may improve on this would be self-governance: Above I analyzed the obstacles of a sole confrontation of the onsite suppliers and market situation from the part of NOKIA and the exclusion of the probability of moving the supply chain to the West. Given these NOKIA could take the initiative and try to address this situation as a problematic to the Western multinationals that practice also outsourcing in the East. NOKIA could make it a collective problem and as a result all the multinationals together (self-governance) could demand collectively either to Chinese state or directly to the supplier market for certain sustainability criteria to be met.

An other coordination mechanism but this time not on the organizational field would be the self-organization of all Chinese workers working under the conditions mentioned on the documentary, in such factories. This self coordination could be supported by NOKIA with a campaign putting pressure not only to the local government and market but also to the Western companies as an Isomorphism mechanism (mimicry).

The coordination mechanism of government is not discussed here because the Chinese state is already involved in the situation described and fails to make the suppliers abide by the labor legislation.

Feedback on 3rd assignment to Jody Milder

Changing the Harvest Game

The Harvest Game

The Harvest Game we tried unsuccessfully to play in class is a very successful depiction of what Hardin described as the “Tragedy of the Commons”. We saw clearly the conflict between the “moral environmental” awareness of the imminent risk of depleting the resources and the struggle to win the Game, collecting as more fish as you can. The result was that after five rounds the Game stopped as there were no fish left. From my point of view there are two conflicting goals in the structure of the game that give at the same time a realistic tone to the game as the solution is not simple: 1. The sustainable provision of fish and 2. The desire to fish the biggest number of fish at the end of the game. But if the end of the game is set on the 8^th or 10^th round we have to be careful to make the ocean give fish until then which means to take care so that we continue to play the Game. In concrete words the possibility of winning may exclude the long living of the Game. Hence someone could say that the dilemma is: Do you want to play for the win or do you want to play for the Game?

It may be a simplistic dilemma but this is how the Harvest game of real life is played when it comes to the resources game. So in retrospection my contribution in altering the Game is mainly the redefinition of the purpose of the Game… or of the purpose of human organization.

My new version of the Harvest Game   

While keeping the basic rules with initial conditions of 50 fish and 6 groups the same the new Game would be would be:

The “Transparent Committee”

A Committee is formed consisted of 6 members; one person from each group. The Committee’s task is to deliver the cups with the sustainable number of fish for each group. It is a controlling committee so as for the players to make sure for the delivery of the sustainable figures and that every time there are exactly 25 fish in the sea. The Committee can consist of different members each time. There is also the right to the committee to ostracize by voice vote someone that is suspicious of delivering unsustainable numbers. If a ostracization is proven, then the group, the member of which cheated, is not allowed to fish for one turn and half of its sustainable number of fishing goes to the “side pot”(see below). However after two turns of decent and sustainable playing it can take half of the fish. Let’s call it the Transparency Committee. The Transparency Committe is advised to keep notes and score of all the transactions of fish taking place in the game.

If you did right the calculations, there is always a remaining fish when delivering sustainable numbers (4×6=24, 25-24=1). This fish is taken from the Transparency committee and is put in a “side pot”.

Now that we have assured that we would play, if we wanted, until the “eternity” we can focus how the Game can keep its suspense and competitiveness and can still have a winner (the group with most fish).

The remaining fish is the award for the Game that starts within the Harvest Game. So when the New Game starts, the first fish is collected in the “side pot”.

Note: In case of different number of groups, the sustainable number of the remaining fish in the ocean (always 25) gives 25 fish to players to share according to the number of the groups.Out of these 25 the Transparency Committee takes as many fish as it can and place them in the “side pot”. In case of 5 groups the gambling stage has no limitations and the only way to get more fish than 5 per group is to challenge and gamble on you skills( see below).

The Next rule and challenge for the players is to build their own game just based on the Fish Point System.

My proposal

You will need:

• A pair of dice
• 9 cards
• Notebook and
• a pen

Judging from my experience a great Game for team battles is Pantomime.

Now apart from the Transparency Committee is the Mime Committee which consists of one player from each group who will simply mimic.

You cannot be a member in both committees.

Each group decides who is going to be the mime to represent them for one round. In every round the Committee of Mimes is recomposed with different members.

The mime committee decides on the concept( book, fairy-tale, movie, story, concept, Idea) on which they will carry out a collective mimicking performance to the 6 groups. The group that guesses right is the one which takes the fish.

The goal is still to get as more fish as you can basically by competing in pantomime.

Gambling stage

Before the performance there is some time for the players to decide if they want to add value to the 1 remaining fish by challenging at least one group by betting fish from their stock. Like this they achieve gaining more fish by gambling on their ability to find the right answer faster than the rest. Each group can challenge or accept a challenge up to two times in total for the whole game. Furthermore, a group has the possibility to deny a challenge up to two times. If no group accepts the challenge made nothing happens and every group strives again for the remaining fish.

In case of draw there is “sudden death”.

Special Cards

In the game there are 4 types of special cards in a pile.

• 3 Black Thieves card: The group that draws this card can roll the dice. If the total of the dice is up to 3 the group can steal one fish from from another group of its choice.
• 3 Liar Fisherman cards: This card “enables” the group to lie to the Trasparency Committee without any consequences.
• 3 No-escape challenge cards: By this card the group you have challenged cannot deny the challenge and must play.
• 3 Gambling Fish cards: The gambling fish represents a “kind” loan of one fish that you have to gamble it in order to win it.

Conditions under which a group get to draw one card from the pile:

1. When a group chooses to withdraw for one round from the Pantomime session. The card  can be used in the next round.
2. When a group wins a challenge where no more than 2 fish are bet.

Each card must be played in the next two rounds. Once it is played it is discarded back to the bottom of the pile.

The moderators for all the challenge and betting procedure can be the Transparency Committee.

This Game proposal was based on the Degrowth thinking in form of an Analogy. According to the Degrowth Declaration, Degrowth proponents aim at mitigating the demand and consumption by re-sizing at the same time the eonomy to the sustainable levels. In addition, they question the consumeristic society by redefining the purpose of human organization shifting it from production – consumption couple oriented to more creative self-reflected non materialistic sustainable balance with “an emphasis on quality of life rather than quantity of consumption”. The transparency committee that takes care of the sustainable re-sizing maybe it could be considered as the State analogue. The new Game is the idea of redefining the purpose of human organization by turning to Arts: Pantomime acting analogue.

Editted on 24/12/2014

References:

Click to access Declaration%20on%20Degrowth%20EN.pdf

Hardin, G. 1968. The Tragedy of the Commons, Science 162(3859 , Dec. 13, 1968), pp. 1243-1248

Flexible Manufacturing Network – Emilia Romagna

Regional Production Network

Emilia–Romagna is an administrative region of Northern Italy comprising the two historic regions of Emilia and Romagna. The capital is Bologna; it has an area of 22,446 km² and about 4.459 million inhabitants. Emilia–Romagna today is considered as one of the richest and most developed regions in Europe with the third highest GDP per capita in Italy. These results were achieved developing a very well balanced economy based on the largest agricultural sector in Italy, on food and automobile production, its ceramic industry and on its pump production (Emilia–Romagna is home of numerous food and automotive industries, such as Parmisan cheese, Parma ham, Ferrari, Lamborghini, Maserati and Ducati). There are around 430,000 SME’s in this region, one of the largest concentrations of small firms in the industrial world. Of those firms, 99% of them have less than 250 employees. The average manufacturing firm in Emilia Romagna has only 10 employees. Only 1% of firms have 250 or more employees.

Emilia Romagna Manufacturing Network

Network analysis

The Emilian model as it is called, consists of a complex network of SME’s and industrial and social co-operatives among them. If we were to categorize it as a result of one type of coordination mechanism we could argue that this complex network emerged through self-organization of the local social cooperatives and industrial actors. Legal contracts are unnecessary and rare, and the transaction costs extremely low and most of the deals taking place are made on a “handshake”. The regional authorities have set the legal and geographical boundaries providing “space” and some support to firms to develop initially in terms of infrastructure and loans, later in terms of business development services, and today in terms of more advanced things like marketing and research and development, which encourage groups of firms to get together and meet their needs collectively.

According to R.Burt there are four types of network structures:

• Tightly coupled based on mimicry between all actors,
• Cliques which are separate networks with no onteraction between them
• Centralized or hierarchical ones where all interactions go through one actor
• Bridging structural holes with single links between networks (entrepreneurial or broker)

Emilian model would be characterized as a complex network of tightly coupled non-hierarchical networks where interaction happens among all actors with small or big projects to be the center on which a number of the actors connect each time to carry out its separate task as they mainly work by outsourcing: Typically, a manufacturing network will come together to fill a contract secured by one of the local firms. This “anchor firm” will then sub-contract segments of the production process to individual firms which specialize in one aspect of the production cycle. And, although the anchor firm may change from one contract to the next, all members of the manufacturing network are known to each other, have long standing economic and social relationships, and see themselves as part of an organic, informal, economic system. As one can realize since outsourcing is the way to carry out their projects, the resource dependency in the network is high among the actors meaning that actors need each other’s resources to achieve their goals. For instance, Ducati makes motorcycles. But 90% of the motorcycle is made outside of Ducati by its network of sub-suppliers. So there is a lot of value being produced before the motorcycle gets assembled by Ducati. Here the majority of natural resources are extracted and used among the regional actors and non-local actors will have temporary contracts with local ones in rare and special occasions. The local enterprises have strong international relationships with foreign companies mainly in form of exchange of know-how, services and information. A good example is the list of the partners/suppliers of Ducati indicating that all of them are placed in the region as it is stated in their official website [5].

As a regional resource network produces knowledge and exchanges information and know-how among the actors as well as creating and diffusing values externally to the local communities. For instance, “Social Cooperatives” as actors in the network provide various services to the mentally and physically disabled—“privatizing” what historically were state services but to cooperatives that are frequently preferred by professionals because they permit creativity and the delivery of high quality services and work experience for the disabled [4]. Emilian Model as a regional resource network would be characterized as social network [6] based on trust (no legal contracts taking place, social cooperatives) with high embeddedness (contracts here are made with a “handshake”). What is remarkable in these networks therefore, is the application of attitudes and principles which closely resemble the operations of civil society. Key among these is the principle of reciprocity, which sets these operations apart from the commodity exchanges of the commercial economy. One firm will outsource to other firms on the expectation that those firms will reciprocate to them later. The success of one firm is intimately bound up with the success of the others. The geographic proximity also benefits the prosperity of the regional network.

Enabling material loops

Geographical proximity is one of the key factors of the development of the network. Even though the actors practice outsourcing and exchange mainly knowledge and information

Emilia-Romagna has developed a network of industrial research laboratories and innovation centres to build up an infrastructure for the dissemination or circulation of scientific and technological knowledge that supports the regional innovation system. The Emilia-Romagna High Technology Network (HTN) comprises laboratories mainly from the public research system of universities and research organizations. They offer their competences, equipment and human resources to respond to the needs expressed by the business sector. This social network is organized according into six Thematic Platforms on: AgroFood, Construction, Energy and Environment, ICT and Design, Mechanics and Materials, and Life Science. In this case of social network information and knowledge are the main material loop that is apparent there. There were no available precise information about the material loops among actors apart from the material flow that takes place when the big firms outsource parts of their production lines to sub-suppliers.

References:

1. http://ec.europa.eu/enterprise/initiatives/esic/materials/esic_summary_asssessment_report_emilia_romagna_final.pdf
2. http://ec.europa.eu/enterprise/initiatives/esic/materials/policy-brief/esic_policy_brief_emilia-romagna.pdf
3. http://www2.cddc.vt.edu/digitalfordism/fordism_materials/broderius.htm (FMN)
4. http://p2pfoundation.net/Emilia-Romagna
5. http://www.ducati.com/partners/suppliers/index.do
6. Industrial Clusters: Complexes, Agglomeration and/or Social Networks (Gordon & McCann 1999)

Edited on 30/12/2014

Feedback to Maja Bosch and Sinan Baran on 2nd Assignment

Feedback on the 1st Assignment to William Van den broeck ( There was no blog entry on the second student to give feedback to)

SES of Water – The right to water

After some research, a long brainstorming, a big sandwich and a coffee I have concluded in the SES that I want to analyse and examine under Ostrom’s framework: The SES around the invaluable public good the water. Nowadays, it is common truth that drinking water resources are under threat of depletion in the long term. If current trends continue, global annual water usage is set to increase by more than two trillion cubic metres by 2030, rising to 6.9 trillion cubic metres. That equates to 40 per cent more than can be provided by available water supplies. In that scope, already since the early 90’s private sector in the form of business has involved with a view to privatize the water resources also. In this assignment I will try to prove that a SES can resort to self-organization indirectly under the threat of scarcity of resources since they are being appropriated by firms at the cost of the people.

Water privatization has proved to be a source of fatal vulnerability for governments bent on privatization. In Latin America victories for water as a human right, against governments assuming they could sell it on the global market, have contributed, for example, to the downfall of right-wing governments in Uruguay, in the late 1990s, and Bolivia, with the Cochabamba ‘water wars’ of 2000. The “water wars” waged by Cochabamba residents in Bolivia in 2000, led by trade unions and campesino organizations against private water giant Bechtel, inaugurated a decade of resistance against corporate control over water. This movement has resulted in constitutional reforms to prevent water privatization and ensure public control of water resources in Bolivia, Ecuador and Colombia and a successful constitutional plebiscite in Uruguay.

In Europe the main trend is towards remunicipalisation as privatization as an idea seems to be abandoned in most of the developed European countries. However, there is a significant counter-tendency coming from austerity packages in Greece, Portugal and Bulgaria, where water privatisations are part of the planned ways of raising extra income for the state (!). In Spain, Madrid city council is attempting to privatise the city water company, Canal Isabel II.

Nowadays Europe is rife with Euopean organizations and movements in favor of municipalisation of the water putting much pressure to the EU institutions and Member States to be obliged to ensure that all inhabitants enjoy the right to water and sanitation for example oganisations like the European Federation of Public Service Unions, European water movement and others.  In Greece, under the auspices of the International Monetary Fund and the European Commission, the Greek government puts on public tender, among many others assets, the Water and Sanitation Company of Thessaloniki (EYAT), even though it is an efficient and profitable company that offers quality water services in low prices, without ever reporting any financial loss. As a consequence people of Thessaloniki resisted strongly to this constitutional violation, by forming NGOs, Associations and local movements. The referendum for the privatization or not of EYATh was the peak of the protests and was held in Thessaloniki on 18 May 2014. About 30 European observers were scattered in the city and watched the process of the referendum as preparing, conducting and counting.

For the Local Community and the local authorities was unique example of local self-organization because:

1. Local Authorities decided unanimously and strongly supported the whole project, providing not only the necessary resources, but also the necessary institutional coverage for the proper conduct of the Referendum.
2. Notice of Referendum as direct-democratic expression of the will of the citizens, providing citizens of Thessaloniki with the framework to freely express their willingness to privatize or not EYATh.
3. In a way it ensured open, “bottom-up”, unmediated participation of all movements and citizens who wanted to participate in the campaign and the referendum. Hundreds of volunteers participated (perhaps the greatest historical contribution to Greece at a similar event), to the call of which contributed the RAM-CM and 11 Municipalities, Initiative 136, the EYATh Workers Association, the SOSte water, Water Warriors, the Citizens Open Assembly for Water, the network of voluntary organizations etc.

A complex SES like this one, with complex relationships between the variables can be analysed as follows ( it is an approach that depicts a typical European SES around water distribution, with special reference to the Greek example of Thessaloniki)

Water distribution SES based on Ostrom’s framework for Sustainability.

The figure, depicts relations of four first-level core subsystems of an SES that affect each other as well as linked social, economic, and political settings and related ecosystems of the distribution of the water resource.

Resource Units (RU): fresh water, water used for every industrial use (farming, heavy industry)

Resource System (RS): Groundwater, Rivers, Sources of drinking water

Governance System (GS): Local authorities, Initiative 136, Water Warriors Right2water, European water movement.

Users (U): Consumers, Industries-Water companies

1.2 How Friedman’s principle would be of a constructive use in the SES

Having talked about the social struggle of people to keep the water distribution as a public good I have to take a step further and try to assess as objectively as possible the privatization of the water distribution. In concrete words I will to imagine if an involvement of the Friedman’s “doctrine” and his vision of a free market in the water distribution SES would be beneficial for the system and its components.

First of all, I have to state that the research on the matter didn’t provide me with solid safe, solid conclusions. Private sector participation in water supply and sanitation is controversial. Adherents of private sector participation argue that it has led to improvements in the efficiency and service quality of utilities. It is argued that it has increased investment and has contributed to expanded access. They cite Manila, Guayaquil in Ecuador, Bucharest, several cities in Colombia, Argentina and Morocco, as well as Côte d’Ivoire and Senegal as success stories. Critics however, contend that private sector participation led to tariff increases and has turned a public good into a private good. Many believe that the privatization of water is incompatible with ensuring the international human right to water. In addition, in bibliography one can often find proponents and adversaries invoking the same examples to support their positions. With my understanding and research on the matter, the main reason for this is that they are based on different criteria and focal points in their case studies.

From my point of view, if Friedman’s proposition was applied to a water distribution market with for instance multiple private firms playing a role would raise the competition which for a while could be beneficial for the common good as it may improve the quality (not always happening according to the existing cases, but in the majority of them). At the same time this rise of competition would not be for long but it would raise the price and along with an imminent water resources depletion the price can continue to rise. That along with the pursuit of profit in any circumstances by the firms can lead to some parts of the population to be excluded from this vital public good which. On the other hand, in Argentina for example, there are studies on the impact of privatization on child mortality based on household survey data, stating that in the 1991–1997 period child mortality fell 5 to 7 percent more in areas that privatized compared to those that remained under public or cooperative management. It was also found that the effect was largest in poorest areas (24%). The main reason is the massive expansion of access to water, which was concentrated in poorer areas that did not receive services before private sector participation was introduced. All in all, by only taking into account the worst case scenario of excluding parts of the society from the right to water I am very skeptical to the involvement of the private sector. On the contrary people whenever water distribution and sanitation is at stake and of bad quality because of bad public municipal administration, should self-organize and try directly to look for solutions for change within democratic measures and actions keeping water resources free and publicly enjoined.

Editted on 30/12/2014

References:

1. http://documents.foodandwaterwatch.org/doc/ChangingTheFlow.pdf#_ga=1.161988799.222822592.1412807330
2. http://www.epsu.org/IMG/pdf/2012_Water_companies-EWCS.pdf
3. http://en.wikipedia.org/wiki/International_Water_Management_Institute
4. http://www.right2water.eu/6
5. http://en.wikipedia.org/wiki/Water_privatization_in_Argentina
6. http://en.wikipedia.org/wiki/Water_privatization
7. http://www.circleofblue.org/waternews/wp-content/uploads/2012/06/Insead_Water_Privatization_Manila_Philippines.pdf

How information materials influenced me on developing my position on Friedman’s proposition.

Development of position on Friedman’s proposition

Following my last week’s “ex-ante” position on Friedman’s proposition of “Business of Business is to increase its profits”, I will now try to present an “ex-post” one having studied all this newly provided material. This material mainly consists of the Friedman’s paper of 1970 and some old interviews of his, the documentaries called “Not business as usual” and “ZEITGEIST: MOVING FORWARD” about the contemporary business model and new approaches, the capitalistic system and the international monetary system.

First of all I would like to state that the given material helped me greatly not to change my position on the Friedman’s proposition to the slightest but on the contrary to reinforce my strong disagreement on his saying.

Friedman’s material:

This past week Friedman and I “have come close enough” in order for me to realize that he is a rigid adherent of Capitalism and the idea of Free Market.  He represents a group of businessmen and politicians of his time, who having experienced the limited number of goods in the markets, wars and market crisis have defined profit as the sole purpose of business. At that time the cold war was in its peak along with a strong debate between the two prevailing socio-economic systems of the so called Urban Democracy (premature capitalism) of the Western civilization and Socialism of Eastern Europe. It is apparent in his paper that he is trying strongly to attack Socialism along with governmental interference which all of a sudden invokes when he talks about an “abstract” responsibility that according to his saying it has to be set by governmental legislation. Given this time context I can understand his perspective. But there is enough proof (“Business not as usual”, Global Crisis) around us that this doctrine has failed. As years passed world changed and along with it, societal values. People nowadays are tired consuming goods with greed and have started to give importance to moral and environmental values, especially upon an imminent climate change or a severe crisis going on.

The documentaries:

The “Zeitgeist: MOVING FORWARD ” documentary contributed to my better understanding and to developing a more holistic perspective of the contemporary capitalistic system and the role of profit. The “Not Business as usual” documentary offered a more optimistic perspective of actually having healthy, socially and ethically responsible firms within the capitalistic system nowadays, introducing me to the revolutionary concept of the Conscious Capitalism. I realized that through brilliant initiatives such the ones described in the documentary emerged business can raise awareness about environment and sustainability issues and ultimately bring humanity back into business. Although I was under the impression that real argument and change of practice on Friedman’s way of doing business would mean change of the whole socio-economic system, documentaries showed me that many of us on the globe have already started to try to shift small parts of the system. All in all the great fact is that the hopefully majority of the public opinion seems to be liking the idea.

Documentaries:

1.ZEITGEIST: MOVING FORWARD:  https://www.youtube.com/watch?v=4Z9WVZddH9w

2. Not Business as usual:  https://www.youtube.com/watch?v=p_TCDS-V6Aw

California vs plastic bags

California vs plastic bags – seen through Rationality models

On Tuesday 30^th of September, 2014 California became the first state to officially forbid single-use plastic bags. Governor, Jerry Brown signed a bill issuing a statewide ban against single-use plastic bags. Beginning in July 2016 grocery and convenience stores across the state will be required to supply reusable, multi-purpose bags to customers to be sold for profit. This law, the first of its kind in the US, is in response to the growing amount of trash and litter building up along the coastline, damaging the ecosystem. Local group “Californians against Waste” [2.] estimates that more than 10 billion hard-to-recycle plastic bags are distributed each year in the state. Plastic bags, are often made by nonrenewable sources that can take several hundreds or even a thousand years to decompose are the reason for many problems worldwide such as litter, killing wildlife and drain blocking which can lead to serious flooding.

Undoubtedly it is a brave initiative taken from the State Leader, and it is easily assumed that this is only the tip of the iceberg as already lobbyists of plastic bag manufacturers have already stated that they would seek a voter referendum to appeal the new law.

My task for today is to try and assess the rationality of these actions that Governor of California took, through the following Rationality models:

1. Rational Actor Model
2. Bounded Rationality

Rational Actor Model (RAM):

According the RAM, the action taken is fully dependent on the given beliefs of the world, at the same time beliefs are supported on the best evidence possible which stems from the assumingly optimal investment on information gathering. In the present case, we can claim that the evidence for the degradation of the coastline and the surrounding environment (including the urban surrounding) by the concentration of hard-to-recycle plastic, are based on highly reliable researches of local institutions and governmental associations [4, 5]. Following RAM, we are based on the assumption that the Authorities of state of California had every information available pertaining to the matter of plastic pollution and how the measure of forbidding the single-use plastic bag could affect the local market and industry. With that being said we could argue that Government knew about the imminent reaction from the lobbyists’ part but chose to proceed with signing the bill, at the cost of the plastic bag manufacturers but in favor of the local environment. Consequently it is a perfectly rationally taken action according to RAM. At this point we notice that RAM works perfectly on one layer simplistic approaches where information is easily reachable and when emotions or majority of beliefs agree on a single common goal.

Bounded Rationality:

Bounded rationality highlights restriction and boundaries of rational decision making. In concrete words, it “argues” with the RAM on the fact that human beings are not fully rational and “introduces” among other things the role of emotions in the decision making procedure. Subsequently we will try to examine our case through Jones’ behavioral Theory of Choice set for Organizations assuming the Authorities of California to be the organization and Gov. Jerry Brown to be its leader. The major aspects of the behavioral theory are:

1. Organizational memory
2. Agenda setting
3. Parallel processing
4. Serial processing
5. Emotional contagion
6. Identification

In case of the State of California:  State of California and recognize the nature of the problem -unprecedented plastic pollution – and try to examine if there are past regulations to deal with it (1. Organizational memory). Then, it looks for alternative already applied ways to cope with the plastic concentration and pollution and prioritizes them (2.Agenda setting).  Subsequently, the State takes a step back and try to look at the problem holistically examining the associated actors. Firstly, it recognizes the need for a common legislation applied to the whole state concerning the plastic bags instead of an “irritating patchwork of local laws for grocers and customers” applied in some cities but not all. Then, it acknowledges the degradation of marine life in Oceans because of the plastic litter. It also takes into account that businesses would save money if they were to stop buying plastic bags and at the same time apart from the ocean plastic decongestion, GHG emissions would be reduced (3. Parallel processing). Authorities realize that the measure of forbidding the single-use plastic bag has been implemented in several cities in the U.S. (including 50 cities in California State) but there is not yet a precedent statewide regulation (4. Serial processing). The leader, in the present case Jerry Brown, has judged all precedent solutions inadequate and even if he already knows the plastic lobbyists are going to be strongly opposed he takes the decision to implement this brave law for his state mainly for the sake of the environment with a view to raise awareness and to try to shift also the single-use plastic bags manufacturers’ production to more sustainable methods (5. Emotional contagion, 6. Identification).

To sum up one can easily realize that Bounded Rationality gives a more holistic approach of human reaction and decisionmaking taking into account more aspects of a human decision-making process instead of focusing only in sheer Rationality. Consequently, B Rationality in my opoinion, is a more realistic and hence more valid approach on decision-making assessment.

Subtropical Convergence Zone(STCZ) in the North Pacific . This area, located north of the Hawaiian archipelago, has a high abundance of marine life, is a known area of marine debris concentration, and is one of the mechanisms for accumulation of debris in the Hawaiian Islands (Pichel et al., 2007).

References:

1. http://www.nbcnews.com/science/environment/california-track-impose-first-statewide-ban-plastic-bags-n197176
2. http://www.cawrecycles.org/
3. http://www.newyorker.com/business/currency/california-versus-plastic-bags
4. http://response.restoration.noaa.gov/about/media/how-big-great-pacific-garbage-patch-science-vs-myth.html
5. http://marinedebris.noaa.gov/info/patch.html#5