Evaluating Incentives for Going Green
In a world where businesses advertise their environmentally-friendly practices, does it pay to go green? What are the benefits and opportunity costs of sustainable business practices? Enhance your geography and economics curriculum with this video which profiles the green initiatives being implemented by Nascar. Then, use the accompanying lesson plan to have students conduct a cost-benefit analysis of green businesses.
- Nascar Goes Green video
- Reproducible: Cost-Benefit Analyzer
Of 300 managers of large global companies recently surveyed by the consulting company Ernst & Young, 44 percent said their company’s spending on sustainability had increased since the 2008 financial crisis. These companies include Walmart, which adopted energy-efficiency targets in 2005 and claims over $200 million in savings per year.
Even a sport that is associated with excessive environmental impacts —Nascar—is putting significant resources into scaling back all wastes and emissions we associate with speedways, as highlighted in this video. They are just one of the many companies actively exploring the world of opportunity associated with green sustainability. In recent years, businesses, small and large, have found that even without international regulations, some type of green initiative—whether it is improved energy efficiency or waste management—is a worthwhile investment. According to the Carbon Disclosure Project (CDP), a watchdog that collects information on the emissions of over 500 large companies, 59 percent of emissions-reducing investments (in energy efficiency or renewable energy) will pay for themselves within three years. “There’s no reason not to be green; it’s too easy,” we are told in this video by Drew Patey, who works for a company called Safety Kleen, the largest collector and refiner of used oil in North America.
benefit – an advantage or profit gained from something
cost – what you give up when you decide to do something; an opportunity cost
eco-conscious – aware of the environmental impact or effect
green initiative – effort pertaining to the environment
renewable energy – any type of energy generated from natural resources that is infinite or can be constantly renewed, such as solar, wind, and hydropower
sustainability – a method of using a resource so that it is not permanently damaged or depleted
Create 4-6 “inkshedding stations” around the classroom with the following topics, all of which are in some way related to the larger theme of “going green”:
- Biking or walking to school
- Shutting down and/or unplugging your laptop or desktop computer at night
- Leaving on your bedroom light when you’re not in your room
- Taking your plastics or cans to the recycling bin
- Buying bottled water
An inkshedding station offers students the opportunity to combine freewriting with group discussion. Set up each inkshedding station with a large piece of poster board with an enlarged bit of text or image pasted in the center of it related to the specific topic. You might choose to just write the above topics on the poster board or paste images, op-eds, advertisements, or comics related to the topic.
Introduce the definitions of opportunity cost and benefit and share an example of the concept (for example, giving up the chance to go to the movies to study so that you get good grades; the opportunity cost is the movie that has been forgone). Then, then assign equal number of students to each inkshedding station. Distribute markers, then invite students to rotate through every station with pens or markers in hand. At each station, they should write a comment, reaction, or question about the text they find there as it relates to the question of “What is the cost and benefit of this action?”
As students circulate in small groups around the various stations and add more to their understanding of the topic, encourage them to have a “conversation on paper,” in which they may write responses to previous comments and questions. When students eventually return to their original stations, they should spend several minutes reading the comments written by others who responded after them, then examine and analyze the opportunity costs and benefits of going green in these small ways.
Have students watch the video while taking notes on the following. Afterwards, use the following questions to assess comprehension and prompt discussion:
- In what ways is Nascar promoting energy conservation? Have you noticed similar initiatives at other sports stadiums or facilities?
- Who are the key purchases of a product like used motor oil? Why might that be?
- What do you make of the statement, “There’s no reason not to be green. It’s too easy.” Do you agree? Disagree? Why?
Share the following with students: How the World Feels About Green Brands, an infographic from GOOD magazine depicting the relationship between brand’s green initiatives and consumer loyalty.
These sources provides rich material for classroom discussions that critically analyze consumer behavior, marketing, and social entrepreneurship. We encourage you to spend some classroom time dissecting them to gauge student takeaways and to introduce key concepts such as consumer behavior, social entrepreneurship, and targeted marketing.
Then, divide students into groups and ask them to examine 3-5 initiatives of one of the businesses featured in Newsweek magazine’s 2011 environmental rankings of the world’s biggest companies [link to ] and their evaluation of the world’s greenest companies. Using the handout “Cost-Benefit Analyzer” PDF reproducible], they should research 3-5 initiatives by visiting company websites, reaching out to the “media” or “public relations” division of specific firms for additional data or interviews, and learn more about them. For each initiative, students should make a list of the costs and benefits. Students should share their findings, then discuss as a group which factors are most important in the eventual cost-benefit analysis and evaluate whether there are enough incentives to go green. Is it really too easy not to go green?
Students can canvas local businesses about their green initiatives and conduct cost-benefit analyses on whether sustainability is economically viable. The handout Cost-Benefit Analyzer could be useful here.
- Why Firms Go Green Article from The Economist magazine
- Harvard Business Review Going Green Special series of blog posts featuring business leaders on the pros and cons of going green
- 10 Green Giants Profiles ten companies that have gone beyond what the law requires to operate in an environmentally responsible way
- Frito-Lay Goes Green Article from the Huffington Post about companies discovering the benefits of going green beyond helping the environment
- How Will We Fund the Green Revolution from GOOD magazine about challenges to businesses going green
14. Understands how human actions modify the physical environment.
16. Understands the changes that occur in the meaning, use, distribution and importance of resources
18. Understands the changes that occur in the meaning, use, distribution and importance of resources
1. Understands that scarcity of productive resources requires choices that generate opportunity costs
2. Understands characteristics of different economic systems, economic institutions, and economic incentives
17. Understands that cultural difference, export/import opportunities, and current trends in a global marketplace can affect an entrepreneurial venture
37. Understands the role of quality and continuous improvement in business organizations
43. Understands the roles of marketing and the impact of marketing on the individual, business, and society