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Who Is Responsible for the C-N-T Equation?

Who Is Responsible for the C-N-T Equation?. Shyam Sunder, Yale School of Management Conference on Managing Responsibly with Confidence Great Lakes Institute of Management Chennai, Dec. 20, 2009. An Overview.

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Who Is Responsible for the C-N-T Equation?

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  1. Who Is Responsible for the C-N-T Equation? Shyam Sunder, Yale School of Management Conference on Managing Responsibly with Confidence Great Lakes Institute of Management Chennai, Dec. 20, 2009

  2. An Overview • C-N-T equation is the mathematical relationship among how much resources each person consumes (C), how many persons consume (N), and the length of time for which they can continue to do so (T) before running out • If all consumed resources were infinite in supply, or completely renewed or substituted indefinitely, T would be infinite, and we would have sustainability • Anything short of that is unsustainable • Should sustainability be our goal? For how many generations? For how large a part of the world? • If so, how do we get to sustainability? Balance CNT eq. • What are the lessons of Copenhagen? • What is responsible management? At what level?

  3. Two Fundamental Human Values • Two fundamental values appear to have been shared by most if not all societies through history: consumption and reproduction • These two are built into our moral codes: we seek and look up to higher consumption (standard of living) • We seek to perpetuate ourselves, and prolong life, supported by both biology as well society and religion • This values worked well over the millions of years of human evolution where they helped hominids survive hostile environment • In the recent centuries, technologies have changed that • We need to look at the aggregate level consequences of values defined for individual behavior

  4. Figure 5: Death Rates per 1000 over Time

  5. Figure 6: The Demographic Transition

  6. Figure 1: Human Population Growth over Time

  7. Figure 7: Projected World Population Growth

  8. The concept of Water Stress Source: WaterGAP 2.0 - December 1999

  9. Back to the C-N-T Equation • Let us settle for (an optimistic) estimate that if we do nothing new, the world population will stabilize at about 8 billion • Let us also assume that this population will not increase its per capital consumption beyond current levels (unlikely given China and India’s current levels and growth) • How many years (generations) to go before we run out of resources? What is T? • But there are objections.

  10. Objections • New technologies will save us • May be, but how confident are we that enough new technologies will come along in good time? What are wedoing to make that happen? For how long will these technologies extend T? • Nuclear energy did come along in mid-20th century, held promise of unlimited cheap energy, but only for a while. What do you think about it today? • We shall discover more resources • We almost surely will. How much, when, and how much will they extend T? • As resources grow scarcer, prices rise, increase incentives to develop and discover more • True (Economics 101), but remember higher prices is a pre-requisite; will it force reduction in consumption, population, create conflict?

  11. So, How Much Time Do We Have? • Let us think about T, the time we have to increase, or even maintain, our C and N • Count in generations • What is our responsibility? • Think, devise ways of dealing with it, and implement and manage them • If we don’t, who will?

  12. Some Things to Think About • Should sustainability be our goal? • For how many generations? • For how large a part of the world? • For how many people? • At what level of consumption per capita? • Don’t forget those 16 billion plastic water bottles discarded into trash each year • How do we get to sustainability? • Does it requires balancing the C-N-T equation • Who will do the balancing?

  13. Isn’t Copenhagen Conference Going to Take Care of That? • What are the lessons of Copenhagen? • Politicians cannot lead the way on this • They will follow the values of their populations • We hold dear the values of consumption and reproduction (increasing C and N) • No politician or even dictators have the power to go beyond that? • Does it require a change in our moral code? • Who will lead the way?

  14. Responsible Management • What is responsible management? • At what level do we think about responsibility? • Individual, family, company, country, or global level • What does responsible management cover? • Employment, products, profits, environment, governance, society, future of human race? • How much of your talents are going to devote at each of these levels of management? • That is the ultimate determinant of T. Its in your hands.

  15. What Do You Think? I would like to know your thoughts.

  16. Thank You! www.som.yale.edu/faculty/sunder

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