What Global Emission Regulations
Should Corporations Support? David Burress
ABSTRACT. In their role as political actors and lob-
byists, corporations have responsibilities to help deter-
mine the existence and content of global regulations of
pollutants. The ethical nature of those responsibilities is
highly sensitive to the assumed normative framework.
This paper compares several frameworks by modeling
them as differently weighted versions of utilitarianism.
Under a strict neoclassical approach, corporations have a
narrow obligation to maximize profits, which generally
entails opposing emission regulations. In contrast, a
stakeholder approach as well as Marxian and common
ethics approaches suggest that firms have an obligation to
actively support sustainable emission regulations with the
following properties:
� major restrictions would be global rather than local
� global restrictions would apply in all cases of per-
sistent emissions
� global restrictions would apply to non-persistent
emissions as well, unless they have been affirmatively
shown to be safe using reasonably persuasive scien-
tific evidence
� safety thresholds would be set fairly restrictively,
based on administrative models and rules of thumb,
in light of existing scientific knowledge but without
requiring full scientific justification
� long-run goals would include zero emission of per-
sistent unsafe substances.
However, the stakeholder approach supports phase-in
rules to mitigate short-run compliance costs.
KEY WORDS: benefit-cost-analysis, emissions-market-
ing, emission-regulation, globalization, laissez-faire-ide-
ology, neoclassical-theory, pollution, stakeholder-theory
sustainability, utilitarianism.
ABBREVIATIONS: CO2, carbon dioxide; DNA,
deoxyribonucleic acid; GDP, gross domestic product;
DDT, dichlorodiphenyltrichloroethane; R&D, research
and development
Introduction
This essay assesses the implications of several ethical
theories for corporate responsibility in helping set
international regulatory standards, especially with
respect to emissions of harmful substances into the
environment. Emission regulations are relevant to
corporations when emissions are either side-effects
of production and distribution by corporations and
their supply and distribution chain, or side-effects of
use by the ultimate customer (Uusitalo, 1996). In at
least some situations, there is both a public policy case
and an ethical case (e.g., Koppari, 1999) for insti-
tuting such regulations at a global level. At present no
global authority can establish such regulations uni-
laterally. However, global arrangements referred to as
‘‘international regimes’’ (see e.g., Young, 1999)
including formal regulations, are increasingly being
established by means of multilateral treaties, agree-
ments, and intergovernmental cooperation.
Major corporations (or their leaders) are impor-
tant political actors in the determination of national
and international regulatory regimes. They partici-
pate in policy formation, for example, by means of
campaign contributions, lobbying, law suits, public
Journal of Business Ethics (2005) 60: 317–339 � Springer 2005DOI 10.1007/s10551-004-6942-z
David Burress is President of the Ad Astra Institute of Kansas,
a nonpartisan public policy think tank. He recently retired
from the University of Kansas Policy Research Institute,
where he worked as a Research Economist. His research in-
terests include technology policy, regional economic modeling,
environmental economics, and benefit-cost analysis. He has a
Masters in physics and a Ph.D. in economics from the
University of Wisconsin-Madison. He is on the National
Board of the American Civil Liberties Union, and a member
of the Lawrence Metropolitan Planning Commission.
task force membership, and public information
activities. The question raised here is: in the course
of their public-policy-related activities, what global
emission regulations, if any, are corporations ethi-
cally obligated to support?
If either corporations as such, or their human
decision-makers, are viewed as ethically obligated
agents, then those obligations could potentially apply
to any form of action, including action taken as a
political agent influencing public policy.1 Indeed,
given the highly significant effects of public policy
on aggregate human welfare, then, at least under
consequentialist theories, ethical rules should be at
least as binding on political actors as they are on
actors in other roles.
A distinction can be drawn between responsibili-
ties of the corporation as an institution, and those of
its leaders. Under common law for example there is a
distinction between sanctioning a corporation (with
costs borne by the shareholders) and sanctioning a
leader (with costs borne by him or her personally). It
has also been argued that only real human beings, and
not fictitious corporate persons, can have intentions
or be subject to the obligation of behaving ethically
(for a recent debate on corporate moral agency, see
Barry and McCann, 2000). In this paper I will assume
for simplicity of exposition that any motives and
ethical obligations at stake rest jointly on the insti-
tution and on its leaders; and I use the term ‘‘cor-
poration’’ to include both. For those who deny the
moral agency of corporations, my arguments would
still apply to their leaders taken alone.
It is not universally accepted that either corpora-
tions or their decision-makers are subject to any
ethical responsibilities other than profit-making.
Stakeholder theories of the corporation do in fact
imply a much broader ethical framework (Donald-
son and Preston, 1995; Freeman and Reed, 1983).
However, the predominate competing theory – the
neoclassical theory of the corporation – can be
understood in its strictest form to imply that
corporations have only a pragmatic responsibility to
make a profit.2 In this interpretation, it is the role of
private competition and public regulation, rather
than the corporate conscience, to ensure that private
profit seeking is socially beneficial. For critiques of
both theories see Humber (2002) and citations
therein. Both theories are described in more detail
below.
This essay compares implications of the two
theories for the regulation of emissions. It also makes
additional comments on the implications of Marxian
ethics as well as common ethical principles. The
several frameworks are compared by modeling each
as a differently weighted version of utilitarianism.
This embeds each framework within an economic
approach to ethics, as in Little (2002). In the eco-
nomic approach, ethics is reduced to benefit-cost
analysis – i.e. right action is that which maximizes
social benefits less social costs. While the language of
benefits and costs has a different ring from other
approaches to ethics, most benefit-cost theorists do
view benefit-cost analysis as a branch of applied
ethics – for the reason that it leads to normative
conditions for action based on the good for society as
a whole, rather than the good for anyone individual.
Using that framework, I will argue that strictly
neoclassical corporations ethically cannot support
global regulatory regimes. Rather, these corporations
are obligated in most cases to follow their profit-
making interest in opposing all emission regulations.
In contrast, stakeholder corporations, at least in
the long run, should support global emission rights,
utilizing a market solution that has some claims to be
more efficient than other methods, but which in any
case is highly compatible with corporate capitalism.
Moreover, stakeholder corporations should support
transition towards a relatively restrictive regulatory
regime3, in which:
� major restrictions would be global rather than
local
� global restrictions would apply in all cases of
persistent emissions
� global restrictions would apply to non-persis-
tent emissions as well, unless they have been
affirmatively shown to be safe using reasonably
persuasive scientific evidence
� safety thresholds would be set fairly restric-
tively, based if necessary on approximate
models and administrative rules of thumb, in
light of existing scientific knowledge but
without requiring full scientific justification
� long-run goals would include zero emission of
persistent unsafe substances.
However, most stakeholder corporations have
short-run interests that conflict with these goals.
318 David Burress
These short-run interests can be accommodated
using phase-in rules. Phase-in rules are less accept-
able under Marxian and common ethics.
Material interests, emission regulations, and
planning horizons
It is controversial whether corporations are bur-
dened only by a narrow pragmatic duty to advance
their own profit-making interests, or by broader
ethical concerns. But in either case, its narrow
material self-interest as an institution does impose
prudential responsibilities on the corporation as a
political (as well as economic) agent. In this regard,
there are distinct chasms between short-run, med-
ium-run, and long-run material interests.
The short run
In a very short run, pragmatic profit-maximization
by a corporation generally implies opposition to
any new and compulsory restrictions on its own
emissions. In some cases, however, relationships
with stakeholders (who may include workers,
customers, suppliers, and persons living in physical
proximity to production facilities) create a pru-
dential interest in restraining harmful emissions
voluntarily. In general, this will occur when
stakeholders have the power to impose costs on
the corporation in retaliation for unwanted emis-
sions. For example, stakeholders may have rights
under tort law to sue for damages. Also, workers
affected by pollution might go out on strike, while
(depending on competitive conditions) customers
and suppliers may have opportunities to withdraw
from ongoing transactions.
A corporation would tend to oppose new and
compulsory controls on its own emissions, even if,
as suggested by stakeholder theory, the corporation
has important goals that go beyond profit maxi-
mization. As long as profit maximization is one of
its important goals, voluntary restrictions leave the
corporation in a better position than compulsory
restrictions to balance profit maximization against
other goals.
In unusual cases a given corporation might sup-
port compulsory restrictions on the emissions of other
corporations, if those emissions disadvantaged the
first corporation. Nevertheless, in a very short run,
most corporations have a strong material interest in
creating and supporting a coalition of all corpora-
tions to oppose all short-run restrictions on corpo-
rate emissions.
Moreover, if such a coalition is unable to defeat
regulations outright, then the interests of its mem-
bers are to weaken the regulations as far as possible,
for example by:
� making the regulations local rather than
national or global;
� putting the burden of proof on regulators to
show beyond a reasonable doubt that each re-
stricted substance is harmful, and that safety
thresholds are scientifically justified;
� putting the burden of regulation on authorities to
measure emissions and show that emitters are in
violation of regulations beyond a reasonable
doubt.
It does not follow that short-run profit-maxi-
mizing corporations would oppose regulations of all
kinds – this conclusion is specific to the regulation of
emissions. Corporations do often find it in their
short-run interest to support regulations. For
example, regulations that create an orderly market
place may tend to expand that market as a whole,
benefitting all firms in that market. Corporations
may also support regulations in their role as a cus-
tomer of other firms. What distinguishes the regu-
lation of emissions is that firms (at least in their
profit-making role) rarely have any strong or specific
short-run interest in a pollution-free environment.
The medium run
In a medium run, however, an anti-regulatory
coalition of firms is likely to be unstable. A cor-
poration’s short-run interest in opposing new reg-
ulations is largely an artifact of sunk costs in
investments not adapted to those regulations. Once
existing capital has been replaced by new capital
adapted to the regulations, economic theory sug-
gests that (with other factors held constant) profit
margins will be as they were before, while the
incentive to oppose regulation will either be
What Global Emission Regulations should Corporations Support? 319
reduced or eliminated. In equilibrium, there is no a
priori reason why well-designed emission regulations
should affect the aggregate profitability of the cor-
porate sector one way or the other – efficiently
chosen emission regulations create as many new
investment opportunities as they destroy.4 If regu-
lations are long-standing, or if the substance of
future regulations is known far in advance (so that
all investments are adapted to those regulations),
then corporations have no collective interest in
opposing them.
That is not to say that individual corporations will
have no incentives to bend or relax long-standing
regulations. Indeed, there will always be incentives
in individual cases to cheat or to lobby for changes.
But at the same time, other businesses have made
investments adapted to the existing regulated envi-
ronment and have offsetting incentives to police
cheating and to oppose changes in regulations.
Consequently there is no collective interest in
opposing existing regulations.
The long run
By ‘‘long-run interest’’ we mean the goals the cor-
poration holds today when planning for a very long
time horizon. The over-riding long-run goal of a
corporation (if it has one; see below) is, arguably,
simply to survive. Corporations, unlike human
beings, have no natural limit on longevity. Hence
they potentially have a super-human incentive to
take a very long view. While corporations can adapt
over time, survival in a recognizable form is condi-
tioned on survival of an environment conducive to
the corporate form and its associated legal and social
structures. Survival of that environment in turn is
conditioned on reasonably efficient regulatory pol-
icy. Consequently, each corporation arguably has a
long-run material interest in the existence of sus-
tainable public regulatory policies.
Sustainability has several aspects. Biological sus-
tainability implies that regulations should be
designed to preserve human life, as well the exis-
tence of an ecology which can support that life.
Social and technological sustainability implies that
regulations should not merely protect human life in
a minimal form, but rather preserve a basis for a
high civilization. Political sustainability implies that
both the content of regulations, and their process of
adoption, should support, or at least not significantly
undercut, the legitimacy of the existing political
order.
Ideological interests
Corporations have an actual and perceived collective
interest in supporting pro-business attitudes in the
policy-making sphere. For example, U.S. corpora-
tions and their owners have historically made dis-
proportionately large campaign contributions to the
Republican party and to candidates who support
deregulation and other laissez faire policies. Many of
these political investments seem intended to advance
a general ideology rather than opposition to any one
specific regulation.
Ideological investments of this type are directed to
medium-run and long-run goals. They are ineffec-
tive as a short-run tactic because it takes time to
establish an ideological regime, because the rein-
forcement of an established ideology has little short-
run payoff to a firm seeking particularized action,
and because ideological investments create collective
or public goods.5
Laissez faire ideology is not the only possible
ideology, and not necessarily the best possible ide-
ology, for supporting medium- to long-run business
interests.6 However, analyzing the political and
economic efficacy of various business ideologies
would take us beyond the scope of this essay. Instead
I will abstract away from ideological interests.
Reconciling interests
These considerations suggest many theoretical
questions. How can short-run and long-run interests
be reconciled? Are these various pragmatic interests
determinative, or are there broader ethical require-
ments? If there are competing ethical requirements,
are special incentives needed to lead corporations to
override their pragmatic interests?
While it can’t completely avoid these general
questions, this essay is concerned with a more spe-
cific application. Should corporations support, op-
pose, or take no position on regulation of emissions?
What form should the regulatory regime supported
320 David Burress
by corporations take? In particular, what is its geo-
graphical scope (local, national, regional, global)?
Who bears the burden of proof for applying
restrictions (are emissions innocent until proven
guilty, or is there an affirmative obligation to dem-
onstrate safety prior to production of emissions)?
Who bears the regulatory burden (measurement by
each producer, or burden on regulators to demon-
strate a violation)? How will distributional effects of
regulation be handled (in particular, who receives
the initial emission rights)?
Incorporation and obligation
This paper is part of a more general conversation on
corporate responsibility – a conversation on actions
that corporations ought to perform. Corporate actions
subject to ethical responsibilities could potentially
include actions in the political sphere intended to
affect the legal and regulatory regime.
‘‘Responsibility’’ includes legal responsibility,
contractual responsibility, and ethical responsibility.
Before we discuss detailed responsibilities concern-
ing emissions, we need to ask what the two com-
peting theories of the corporation imply for these
three forms of responsibility in general.
Empirical versus normative theories of the corporation
Theories of the corporation are of two types:
empirical or descriptive theory – how do corpora-
tions actually behave? – and normative theory – how
should they behave? Our concern here is with
normative theory, but we do need to take empirical
behavior of the firm into account.
Stakeholder theory is generally presented as hav-
ing both empirical and normative versions. In con-
trast, neoclassical theory originated as, and still is
most often presented as, a purely empirical theory in
economics (e.g., in the microeconomic text by
Varian, 1992). Some economists however do make
openly normative arguments. For example, it is
commonly argued that corporate leaders who fail to
maximize profits waste social resources, which is
ethically undesirable (Friedman, 1962).7 It will also
be apparent from even a cursory reading of editorials
in publications such as The Wall Street Journal that, in
practice, variants of neoclassical theory are widely
accepted as normative theories within the business
community.8 Finally, it has also come to receive
substantial attention in academic studies of business
ethics.9
‘‘Strict’’ neoclassical theory
‘‘Neoclassical’’ is a general term sometimes equated
with mainstream Anglo-American economics as a
whole. Because that tradition is so broad, it tends to
lack unified normative implications for particular
cases. In this essay I intend a much stricter definition.
In this strict theory, corporations both as an empir-
ical fact do, and as a normative principle should, act
solely so as to as to maximize profits. Strict neoclas-
sical theory addresses many possible limitations or
constraints on profit maximization, but in general
these constraints are taken to be external rather than
internal. In particular, corporations may face tech-
nological restrictions, capital restrictions, market
restrictions, legal and regulatory restrictions, cost of
obtaining external information, cost of transacting
with other agents, and so on. However, the corpo-
ration itself is assumed to be unitary, to know its
own mind, and to make decisions without incurring
internal cost of information and transaction.10
‘‘Profit maximization’’ refers to maximizing the
expected net present value of the firm’s future cash
flow stream (see e.g., Malinvaud 1987). Discounting
future profits to the present provides the basis for
reconciling short-run and longer-run interests of the
corporation. The discount rate used for calculating
present values is based on market rates (see note 17
for further discussion).
Normative neoclassical theory encourages the
firm to engage in (internally unconstrained) profit
maximization. The ethical basis for this theory rests
on the ‘‘invisible hand.’’11 In particular, under cer-
tain assumptions (including competitive markets and
government regulations that prevent market failures)
profit maximization leads to maximization of a
particular aggregate of everybody’s utility.
In some contexts (e.g., note 14), we will need to
describe the behavior of individual employees. In
the strict neoclassical theory, employees are moti-
vated by a simple desire to maximize their own
material consumption. Moreover, the corporation
What Global Emission Regulations should Corporations Support? 321
has full information about each employee’s actions
and motivations. Consequently the corporation can
always control their behavior fully by manipulating
their material incentives. These assumptions on
worker behavior add nothing to the definition of the
unitary profit maximizing corporation; they simply
spell out some logical implications of assuming a
unitary corporation.
‘‘Semi-strict’’ neoclassical theory
In all probability, few people accept neoclassical
normative theory in the stark or extreme form as-
sumed here. Economist for example use economic
models in a flexible fashion, such that the particular
assumptions are adapted to the particular circum-
stances. If strict neoclassical theory leads to unac-
ceptable ethical positions (as I will argue it does),
then most people will feel free to modify the
empirical or normative assumptions as needed to
avoid reaching those positions.
That is not to say that analyzing the strict neo-
classical firm is a useless straw-man argument. By
pointing out implications of the strict neoclassical
theory, we can suggest why that theory is norma-
tively unacceptable, and also inform the search for a
better theory. If, as almost everyone seems to agree,
the world is more efficient if corporations internalize
at least some ethical principles (beyond profit-max-
imizing) than if they do not, then all normatively
acceptable corporations are stakeholder firms in
some degree; the only question is how far to take it.
A common proposal for relaxing the strict theory
adds a single condition (in addition to profit maxi-
mization) stating that firms should obey the law.
This relaxation turns out not be helpful. The
immediate problem for our analysis is that there
seems to be no reasonable version of utilitarianism
that leads to lawfulness but not other conditions.
More importantly, imposing lawfulness does not
relevantly change corporate goals – law-abiding
firms would be just as vocally opposed to pollution
regulation as law-breaking firms, since nothing in
current law discourages self-interested behavior in
opposing regulation. (Law-abiding firms would no
doubt use less ruthless methods to seek those goals
than law-breaking firms, but choice of lobbying
methods is outside the scope of this paper.)
A more interesting suggestion is Friedman’s more
general proposal that corporations should obey ‘‘the
rules of the game … engag(ing) in open and free
competition …’’ While this is far from clear language,
it does suggest that firms might have obligations not to
take advantage of certain market failures – but infer-
ring implications for regulatory lobbying would not
be possible without more detailed specification.
Stakeholder theory
Stakeholder theory is generally discussed using lan-
guage common to fields such as public administra-
tion, business administration, or sociology, often
based on a Kantian perspective. I will define it in-
stead using utilitarian language taken from the public
finance and social choice branches of mainstream
economics. This language supports a cleaner con-
frontation with neoclassical theory.
Stakeholder theory (in my model) assumes that
the corporation both does and should follow rules
of behavior that are expected to maximize a social
welfare function (i.e., a weighted aggregation)
over the utility functions of ‘‘stakeholders.’’ Or in
alternative language, a stakeholder corporation
pursues a ‘‘common good’’ for its stakeholders
(Argandona, 1998), based on some reasonable
operationalization of the idea of a common good.
‘‘Stakeholders’’ are defined to include all persons
directly affected by actions of the corporation.
Strict neoclassical theory could be thought of as a
special case of stakeholder theory in which utility
weights are zero for all persons except sharehold-
ers; therefore we can distinguish stakeholder the-
ory by assuming that utility weights are positive
for all directly affected persons.
Note however, that I will define ‘‘strict neoclas-
sical theory’’ as act-utilitarian (agents directly maxi-
mize social welfare ¼ profits), while ‘‘stakeholder
theory’’ is rule-utilitarian (agents choose ethical and
pragmatic rules that are believed likely in the long
run to maximize social welfare ¼ common good).
This distinction might seem to stack the deck (e.g.,
when I argue below that stakeholder corporations
should be more willing than neoclassical corpora-
tions to obey established laws), but I believe it cor-
responds to a real distinction in how the two
theories are presented and used.12
To formulate a complete stakeholder theory, we
would need to specify detailed features of the theory:
322 David Burress
� how to distinguish which persons ‘‘count’’ –
for example, persons directly affected by the
corporation, as opposed to persons indirectly
affected;
� what the relative utility weights are or how
they should be determined;
� what are the external and internal constraints
on action by managers of the corporation.
(See Kaler, 2003 for a relevant discussion.) How-
ever, these issues aren’t central to my argument and
won’t be addressed here.
Theories of the firm also need to specify what
assumptions are being made about individual
utility functions – i.e., what is assumed about
human nature. I will discuss this further below,
but in practice neoclassical theory simply equates
the utility of shareholders with the profits they
receive – a ‘‘thin’’ goal equivalent to maximizing
material consumption – while stakeholder theory
assumes that humans have complex or ‘‘thick’’
goals that cannot be equated with maximizing
consumption. In particular, human beings have an
innate ethical sense.
Other theories
While I will not dwell on them extensively, two
other ethical approaches of particular interest are
Marxian theories, and the generally a-theoretical
observed facts of practical ethics that we might call
‘‘the common ethics.’’ For purposes of this discus-
sion, both can be modeled as rule-utilitarian theories
that assume humans have ‘‘thick’’ goals. In the
‘‘common ethics’’ model, rules are assumed to be
chosen to maximize an aggregate of utilities that
gives equal weight to each human being. In a (highly
oversimplified) model of ‘‘Marxian ethics,’’ rules are
chosen to maximize an aggregate of utilities, giving
equal weight to each worker, and zero weight to
each shareholder.
Legal responsibility
All theories imply that corporations should gen-
erally obey the law, but for different reasons, and
with differing degrees of conviction. Stakeholder
theory is fairly unequivocal about the obligation of
the corporation to obey the law. Law abiding
behavior is in the interests of stakeholders not
merely because law breaking is risky to the cor-
poration, but more significantly because human
beings are conceived of as agents with goals that
include a desire for self and others to behave
ethically.
‘‘Strict’’ neoclassical theory tends to support
obedience to the law, solely because obedience
often tends to be a profit-maximizing strategy. In
general, strict neoclassical theory necessarily implies
that corporations should violate the law whenever
they can predicably profit from it. Defenders of
neoclassical theory list numerous external forces
implying that breaking the law usually wouldn’t
maximize profits – i.e., reasons why corporations
could not expect to ‘‘get away with it’’ These
forces are simply the costs that various stake-
holders can impose on a law-breaking corpora-
tion: loss of patronage, civil suit, criminal
penalties, and so on. Whatever the merits of these
arguments – and there are obvious exceptions to
each of these claims – this style of argument
implicitly grants that external force is needed at
all times to keep each neoclassical corporation in
line.
Academic theories of law-abiding behavior
almost universally agree that external pressure
from law-enforcement alone is not enough to
create a law-abiding society. 13 It is also necessary
that most people tend to prefer to obey the law
for its own sake. This argument can be made in
terms of information costs and transactions costs,
but other language says it more succinctly: qui
custodiet custodies? In a corrupt society, uncor-
rupted government won’t survive to ride herd on
society, or, should it somehow survive untainted,
manage the overwhelming task of tracking every
aspect of an entity (the entire society) which is
much larger than itself. 14 Or to put it more
bluntly: there is neither empirical nor theoretical
evidence that law-abiding behavior is a stable
equilibrium absent individual conscience. As
Adam Smith (1759, 1976) was well aware, there
is no invisible hand enforcing law and order – it
cannot descend like manna from heaven to re-
ward the innate virtuousness of a world run on
pure greed.
What Global Emission Regulations should Corporations Support? 323
Some neoclassicists have also argued that law-
breaking need not be bad; for example, that firms
engaging in illegal bribery can increase social welfare
(e.g., Thursby, et al., 1991). Since the law by and
large criminalizes actions judged likely to reduce the
general welfare, such arguments are an inadequate
normative defense for lawlessness.
The main question to be addressed here is not one
of obedience to the law, but rather, the corporations’s
role in formation of the law. However, attitudes
toward obedience to law do foreshadow attitudes
towards the ethical content of law-making.
Contractual responsibility
‘‘Contractual responsibility’’ refers to obligations
accepted by prior agreement To the extent that the
contract is clear, the nature of the contracted obli-
gations is simply a matter of fact. In normative
theory there is always a separate ethical question as to
whether an agent should or should not actually fulfill
its given contractual obligations. Here again, all
theories tend to imply an obligation to fulfill con-
tractual agreements, but with differing degrees of
conviction.
In stakeholder theory, contractual partners are
among the stakeholders whose utility is of positive
significance. (In Kantian terms, they are owed the
ultimate respect of being treated as ends and not
means.) It follows that there is an obligation to obey
contracts even when it becomes inconvenient to do
so. Such an obligation is not absolute, but it is an
important ethical consideration that in particular
cases may or may not be in competition with other
ethical considerations.
In neoclassical theory, there is a purely instru-
mental relationship between the parties. Contracts
are followed only so long as considerations of con-
tractual gain and future reputation outweigh any
potential gains from reneging or hold-up.
Ethical responsibilities of the neoclassical firm
In the short and medium runs, a strictly neoclassical
corporation is obligated only to make a profit. For
the long run, I will argue it has no practical interests
or obligations at all.
Neoclassical corporations are assumed, however,
to maximize present values of cash flow streams that
last over a potentially unlimited horizon. In other
words, the corporation has a positive interest in
gaining an additional dollar at any time, no matter
how far in the future it will be received. However,
that is very far from saying that in practice such a
corporation would take a significantly long-run
view, because any profits in the distant future are
discounted in the extreme.
In particular, profit maximization specifically
implies that for any given fixed annual real profit
continuing over an infinite horizon, there is a finite
sum of money large enough that the neoclassical
corporation would prefer to receive that amount of
profit today, pay it out in dividends, and then go out
of business, as opposed to obtaining that stream of
profits forever. 15 In itself, that does not necessarily
distinguish the neoclassical corporation from the
stakeholder corporation. Almost any utilitarian actor
is willing to contemplate an acceleration of its own
eventual demise, if the stakes are high enough. 16
What distinguishes the neoclassical corporation is the
extremely low value it places in practice on the
moderately distant future – distant events of a
magnitude up to and including its own destruction
are simply not appreciably significant.
It is important to quantify this point. Major cor-
porations have high internal discount rates, typically
well in excess of 10% per year in real terms.17 At
such rates, standard discounting formulas show that a
dollar expected to be received just 7 years in the
future is worth much less than half of what a dollar is
worth to the firm now. Similarly, a dollar expected
to be received in 70 years is worth very much less
than 1/1000 of what a dollar received today is
worth.
Moreover, the present value today of the entire
market value of any firm as it will be valued in 50 or
100 years is tiny in comparison with just one year’s
profits received today. 18 (The sole possible excep-
tion would be cases where the firm is expected to
grow exponentially for a prolonged period at a
growth rate comparable to or greater than the dis-
count rate. Historic data on the growth of major
corporations imply that expectations of sustained
long-run growth at such high rates can never be
justified. Indeed, such growth implies that the firm
would eventually exceed the entire economy in
324 David Burress
size.) Consequently, in practice, a profit maximizing
corporation should be quite willing to accept its own
certain destruction in 50 or 100 years, in return for
an increase by a small percentage in just one year’s
profits today. Such a firm cannot be said to have
appreciable long-run interests.
Ethical responsibilities of the stakeholder firm
In contrast, the stakeholder corporation does place
an appreciable value on events expected 50–
100 years in the future. This follows from the fact
that the corporation values the utility of its stake-
holders, who are viewed as real human beings rather
than abstract profit-maximizers. In particular, I take
it as a primitive sociological or ethical fact that real
human beings on average do place an appreciable
value on protecting the environmental condition of
the world their children and grandchildren will live
in.19 Since the stakeholder corporation is motivated
by, and solely by, the goals of its stakeholders, it must
be appreciably motivated by that particular goal.20
We should not paint a Pollyanna picture of the
stakeholder corporation. Human beings have
unethical motives as well as ethical motives. The
actions of a stakeholder corporation could reflect
both kinds of motives. What distinguishes the
stakeholder corporation is its potentiality for doing
the ethically right thing, even in the absence of any
external pressure. The strictly neoclassical corpora-
tion has no such potentiality.
Thus, stakeholder corporations in practice will
occasionally face situations where the material utility
of their stakeholders could be increased by acts that
violate either Marxian ethics or ‘‘the common eth-
ics.’’ These cases arise, in particular, when there is an
opportunity to make additional profits in a way
commonly viewed as unethical, albeit the profits
could be shared across all stakeholders.21 (These
situations are quite similar to, but presumably less
common than, the situations that would lead neo-
classical corporations to behave contrary to common
ethics.) Note that, in such cases, if the stakeholder
corporation is ethically required to maximize
aggregate utility of its stakeholders, and if its stake-
holders do not place a high-enough utility value on
ethics, then the firm is ethically required in these
cases to act against common ethical views. This is a
clear weakness in stakeholder ethical theory, at least
as it is modeled here.22
The simplest resolution would entail redefining
stakeholders very broadly to include all directly and
indirectly affected persons. In a rule-utilitarian
framework, common ethics consists simply in those
rules of behavior which tend to maximize an
aggregate of every person’s utility. If we defined
stakeholders broadly enough, then stakeholder ethics
would become identical to common ethics.
This is not a very satisfactory resolution, however.
In particular, there is no evidence that firms actually
do accept all humanity as their stakeholders. (E.g.,
existing evidence for the empirical version of stake-
holder theory is based on a narrower definition.)
If the normative theory differs too drastically
from the empirical reality, then in the name of ethics
we are calling on all corporations to make major
changes in their modes of operation. Preaching
radical ethical change to corporations seems vacuous.
Corporations are a successful form precisely because
they almost single-mindedly follow their own
internal dynamic.
A more realistic approach is to simply accept that
normative stakeholder theory is incomplete. In
cases where stakeholder theory reaches counterin-
tuitive ethical results, it will be necessary both to
rely on the consciences of individual whistleblowers
to resist corporate temptation, and also to assume
or hope (similarly to neoclassical theory) that
external pressure can contain corporate misbehav-
ior.23
Ethical criteria
Sustainability
It is widely argued that corporate environmental
behaviors should be sustainable (e.g., DesJardins,
1998), but ‘‘sustainability’’ is an increasingly con-
tested concept. There are disagreements both over
what it should mean in theory to be sustainable, and
over how in practice it can or should be accom-
plished. For purposes of this essay, I will assume a
definition similar to one put forth by some neo-
classical economists. They focus on ‘‘sustainable
development’’ rather than ‘‘sustainability.’’ A
development regime is said to be sustainable if and
What Global Emission Regulations should Corporations Support? 325
only if the resources left to each generation allow it
to achieve a higher general standard of living than its
predecessors. The concept of resources includes
knowledge and technology and social capital as well
as material resources, so the concept is one of ‘‘dy-
namic sustainability’’ in which (sufficiently large)
increased stocks of knowledge are assumed able to
substitute perfectly for any non-renewable resources
used up by a given generation.
This is the most elastic and least restrictive def-
inition of sustainability I am aware of. In the form
stated above, it is subject to serious challenge. For
example, it downplays many problems related to
uncertainty,24 and in particular may not be consis-
tent with the Precautionary Principle.25 At the
same time, using a lenient standard of sustainability
lends rigor to ethical arguments: if a regulatory
action is required by this standard, then it is likely
to be required by any reasonable standard of sus-
tainability.
Stakeholder firms should tend to support long-
run policies that are sustainable, because individual
stakeholders tend to support such policies. Indeed, I
am not aware of any literature other than nihilism
that overtly opposes a sustainability ideal. However,
neoclassical firms have no particular reason to support
sustainability.
Fairness between nations
Treating people fairly is generally viewed as an ethical
requirement, which it is. In the context of distribu-
tional effects of global regulation of emissions, it may
be more helpful to view it as a political requirement. In
particular, global perceptions of fairness are pragmat-
ically needed in at least some degree in order to reach
global agreements on regulation of emissions.
For example, consider the case of greenhouse gas
emissions, especially carbon dioxide. There is sci-
entific agreement that anthropomorphic emissions
are substantially contributing to an increase in the
earth’s temperature, and that climatological, eco-
nomic and social effects will be large, costly, and
partly unpredictable.26 Cutting back on CO2 emis-
sions is also costly. A majority of the emitted CO2
mass currently comes from rich industrialized
countries. Those countries are demanding large
emission quotas in order to preserve their existing
standard of living. But poor countries also demand
large quotas, so that they can develop their econo-
mies and catch up with rich countries.
Small poor nations, including most African na-
tions, probably can be coerced by major patron states
into agreements they perceive as unfair. Large poor
nations like China and India are much harder to
coerce. Enforcement is also problematic if the
underlying agreements are perceived as unfair.
Emission controls would fail to contain greenhouse
gases adequately if just one of the large nations failed
to conform. Especially given the internal political
difficulties of imposing controls, some large poor
nations are likely to insist on quid pro quos for
controlling emissions. Once one poor nation opts
out or receives special preferences, other poor na-
tions are likely to follow. Hence unfair agreements
have a propensity to collapse.
The natural market solution is to grant CO2
emission rights on some basis mutually accepted as
equitable27 (or on a basis of quasi-equitable com-
promise), and then let rich countries buy some of
those rights back from poor countries. The dollar
transfers that result would likely be much larger than
existing flows of international foreign aid, so the
negotiations over quotas would be very difficult.28 A
negotiated basis might include some combination of
weighting based on numbers of persons, and
weighting based on current GDP.
Because of its interest in having a viable world, the
stakeholder corporation should support concessions
to poor nations in order to achieve global controls, at
least in the long run. Because of its essentially short-
run orientation, the neoclassical corporation should
oppose both concessions and controls.
Fairness between economic actors
Most people believe they have a right not be subjected
to unexpected harm resulting from the actions of
others, and the laws in all democratic countries accept
this principle as important, though not always deter-
minative. In some cases individuals have rights to be
free not merely from harm, but also from threats of
harm. Clearly there are and must be limits to such
rights – if every person in every action took every
possible precaution against every possible harm, the
economy would grind to a halt.29 However, in
326 David Burress
definable cases of substantial harm in which the cause
can be traced to a specific polluter, both law and ethics
may hold the polluter liable for tort damages.
Tort actions create an incentive against pollution.
This incentive constitutes an addition to, but not a
sufficient substitute for, any incentives provided by
global regulation. In cases regulated globally, there
will generally be multiple emission sources for any
given pollutant, and also multiple pollutants that can
cause any particular harm, so that the specific causal
relationship needed for tort action usually cannot be
established.
Tort action is generally related to a local event that
can be handled under local law. However, there are
some tort issues that require global attention. First,
some torts will concern pollution spilling over na-
tional boundaries. There is a need for agreed inter-
national procedures in those cases. Second, when
multinational corporations cause great loss of life and
health, as in the Bhopal disaster, compensation for
loss may be utterly disproportionate depending on
income and national location of the victims. These
outcomes violate popular ideas of fairness.
Perceptions of fairness are important to the legiti-
macy and stability of a political regime. This is espe-
cially the case for democratic regimes. Therefore the
sustainability of a global political order hospitable to
corporations, is likely to depend on ordinary people
not believing that order grossly unfair. Tort law may
play a rather limited role in feelings about fairness of
the international regime (the cultural resonance of the
Bhopal disaster however could suggest otherwise). In
any case, legitimacy is built up based on many small
governmental decisions over time. Tort law includes
some of those decisions. Presumptively, stakeholder
firms should support globally fair tort laws. Since
fairness is a long-run social investment, neoclassical
firms should oppose any global tort laws that placed
them at significant expected short-run risk.
Benefit-cost analysis
Utilitarian judgements are couched in the language of
‘‘efficiency.’’ Therefore in this paper, ‘‘efficient’’ has
approximately the meaning ‘‘ethical’’ or ‘‘virtuous.’’
Concrete utilitarian calculations are usually opera-
tionalized as a monetized comparison of costs and
benefits to society as a whole. For convenience, these
calculations are normally based on the ‘‘one dollar one
vote’’ assumption – in other words, a dollar’s worth of
benefit or cost has the same social value whether as-
signed to rich or poor. It is significant that nearly all
benefit-cost theorists agree this standard is ethically
flawed – i.e., most agree that a dollar is socially more
valuable when received by poor persons than by the
rich (reviewed in Burress and Rich, 1997 ). However,
for uses made in this paper any conclusions reached
under the ‘‘one dollar one vote’’ standard would be
even more strongly justified under a more pro-poor
standard. Also, ‘‘one dollar one vote’’ arguably does
approximate the utilitarian weighting actually used by
stakeholder corporations. Moreover, by definition it
reflects the weighting used by neoclassical corpora-
tions. Therefore this paper assumes a ‘‘one dollar one
vote’’ standard throughout.30
Internalization of costs and benefits
The benefit-cost approach implies a fundamental
moral axiom: under ideal circumstances, human af-
fairs should be organized in such a way that each
decision maker will pay the full or ‘‘social’’ costs, and
also enjoy the full social benefits, that result from
each action he or she performs. This axiom follows
rigorously from two assumptions:
� ethical outcomes consist in maximizing social
utility or welfare, defined to equal the sum of
all benefits less all costs of all actions.
� individuals, whether or not they intend to act
ethically, as an empirical fact do act so as to
maximize the benefits, net of costs, that they
privately face.
In other words, if private net benefits equal social
net benefits, then rational individuals will automat-
ically maximize social welfare.31
This axiom remains abstractly true no matter how
we decide to define benefits and costs. But to apply
it, we have to define what counts as a social cost or
benefit. The definitions are different in each of the
four normative theories. However in each case they
consist in the sum of dollar values placed on all
outcomes by all individual persons, multiplied by
weights for each individual (using weights that are
different for each theory).
What Global Emission Regulations should Corporations Support? 327
This axiom has important and direct implication
for deciding who should bear the costs of regulation.
Under the common ethics, the full costs of regu-
lating emissions should be usually be borne by those
enjoy the benefits of producing the emissions. Un-
der competitive market conditions, the only way to
ensure that is to place the full burden initially on
those who decide to produce the emissions. (The
costs will then be passed on to the ultimate benefi-
ciaries through normal market process.) Those costs
include:
� the costs of deciding which emission to regulate
� the costs of determining an allowed level of
emission
� the costs of measuring actual emissions
� the costs of enforcing the limits.
Marxian ethics reaches a similar conclusion.
Stakeholder ethics would generally agree, except
that the stakeholder firm should seek phase-in rules
as described below.
Neoclassical ethics places no value on cost or
benefits that accrue to any individual other than
shareholders of that particular firm. Accordingly it
should support externalization of all costs of pro-
duction to the maximum extent possible.
Technical and legal criteria
Emissions
Here I will define ‘‘emission’’ very broadly as any
existing physical substance, matter, or form of energy
producedor causedorutilizedby abusiness orfirmand
no longer under direct control of it or its customers or
supply or distribution chain.32 However, the discus-
sion will mainly focus on chemical substances.
Not every emission constitutes an environmental
problem, but every type or species of emitted matter or
energy constitutes a potential problem. The difference
between problematic and benign emission rests en-
tirely on the quantity or aggregate density of the
emittent at a sensitive location, in relation to the level
of hazard presented by that emittent. Thus, oxygen
and nitrogen are naturally occurring substances nec-
essary to dominant forms of life, yet huge emissions of
either can cause a local problem. (Concentrated
oxygen is chemically risky to life forms, and can also
cause explosions. Concentrated nitrogen is suffocat-
ing.) Conversely, even the most deadly toxin is
harmless if released in sufficiently minute quantities.33
Persistent emittents
It follows that persistent emittents are a much more
serious problem than degradable emittents. To the
extent that a substance persists in the environment
and is continuously created, it will build up without
limit. And if it builds up without limit, then even-
tually it will become a nuisance. Moreover, if the
degree of nuisance builds up without limit, then the
costs it imposes also build up without limit.
Therefore, in the extreme case of perfect persis-
tence (or perfect non-degradability), the only per-
manently sustainable level of emission is zero.
It does not follow that use of such substances should
be banned, only that they should not be continuously
released into the environment in non-diminishing
amounts. In practice, however, nearly all uses of
material substances do entail some degree of release
into the environment. A purely theoretical exception
consists in substances used in highly controlled pro-
duction processes and never released into the envi-
ronment. As far as I know, there are no practical
examples of perfectly contained production processes.
There is also the theoretical possibility of releasing
a persistent emittent for a temporary period, until a
certain threshold is reached, and then ceasing forever
to use or release it.
In practice, no emittent is perfectly persistent.
However, there is a strong long-run case for banning
emission of any highly persistent substance. In or-
dinary language, persistence is a relative notion; a
substance is environmentally persistent if both:
� the processes of degradation operate more
slowly than the processes of emission, and
� the level of emission is high enough to cause a
hazard.
It is always the case that a sufficiently high rate of
emission could in principle overwhelm the degrada-
tion process and cause a hazardous level of an emittent.
Therefore ‘‘persistence’’ is a notion that has to be
328 David Burress
operationalized administratively, in the light of actual
conditions of production volume and use.
Consequently, under any administrative defini-
tion of persistence some emissions classed as non-
persistent will still constitute nuisances. Thus, even if
a substance degrades rapidly in the natural environ-
ment, it can still constitute a nuisance if it is suffi-
ciently hazardous and sufficiently mobile, or is
delivered in inconvenient locations.
Degradation
Degradation of a pollutant occurs when the pollutant
is broken down into other substances, or when it is
permanently removed from the active biosphere.
Both concepts are problematical.
The break-down of a hazardous pollutant often
produces other hazardous pollutants. Therefore
degradation should not be viewed as complete until
all hazardous byproducts of all generations have been
degraded below an acceptable level of hazard.
Moreover, breakdown in the natural environment
proceeds variably, and does not generally mimic
breakdown in the laboratory. It follows that envi-
ronmental break-down of a particular emittent for
regulatory purposes will have to be defined admin-
istratively, in the light of available scientific knowl-
edge but with a necessary degree of arbitrariness.
Similarly, permanent removal from the biosphere
is a relative concept. For example, because of pro-
cesses such as erosion, solution, and evaporation,
substances buried in the earth are generally not
permanently removed from the biosphere. Also,
procedures such as launching radioactive materials
into outer space may permanently remove a potential
emittent, but they run the risk of failing disastrously.
Again, administrative definitions will be needed.
Mobility
If an emittent remained forever where it was emitted,
it would not present a global problem. However,
substances that are airborne or waterborne or soluble
or biologically active do not remain in one place. Also,
complex substances such as trash include components
that fall into all of these categories. Moreover, in some
cases human agency moves otherwise immobile
materials; for example radioactive metals have been
unknowingly reclaimed from waste dumps and
recycled by scavengers.
Even relatively slowly dispersing substances will
eventually cover the globe if they are sufficiently
persistent. Therefore immobility by itself should
rarely be a sufficient reason to avoid global regula-
tion of an emittent. In the long run, low mobility
should be administratively significant only when
combined with low persistence and low hazard.
Interactions among emissions
It is possible for various species of emission to
potentiate each other, or work jointly to increase the
level of hazard, or interact chemically to create new
hazards (as in smog). The simplest situation is one
where multiple species have essentially the same
effects (hormone mimickers and estrogen disrupters
are possible examples). In that case all of the similar
species need to be regulated as a unit, so that their
total environmental load does not exceed regulatory
limits. Because some hazards involve non-linear ef-
fects (e.g., doubling the concentration might more
than double the harm; Goldstein and Goldstein,
2002, pp. 77–79), setting appropriate joint limits can
be technically complicated.
A larger problem is that most of the possible
interactions among different species are not known
in advance. Moreover the number of possible
interactions is increasing explosively (it increases
with the square of the number of species). Assuring a
reasonable level of safety would require extensive
and systematic technical analysis. At present no
country is attempting such an analysis, either before
or after emissions are permitted into the environ-
ment. Because of the sheer size of the research
problem, administrative rules will be needed that
define various classes of possible interaction, some of
which are presumptively innocuous.
The political economy of global regulation
If hazards from a particular pollutant are known to
have a purely local incidence, the case for regulating
it globally is rather weak.34 Also, there is an
important distinction between hazardous local con-
What Global Emission Regulations should Corporations Support? 329
centrations of an emittent, versus a hazardous aver-
age global level.35 I will assume that global regula-
tion is concerned with the average global level of
emittents, and that other problems can be handled
locally. Presumably, local regulation will assist the
global regulation effort, but the two efforts have
different goals and standards.
However, even in cases where pollution has a
global incidence, in principle its regulation could be
accomplished through independent but parallel
national or local regulations that covered the globe.
In practice, parallel regulation is very likely to fail
because of free rider problems. In particular, when a
given locality regulates a global pollutant, the costs of
regulation are borne locally, while the benefits are
shared globally. While local regulation may pass
ethical tests, it does not pass a locally oriented ben-
efit-cost test. Because of free rider problems, local
voters are unlikely to support restrictive regulations
they do not significantly benefit from. For these
reasons, political economy models (such as Oate’s
‘‘fiscal federalism’’ model, 1972) suggest that regu-
latory systems should have authority over at least the
same geographical range as the hazard that is being
regulated.
Consequently, if truly global emission problems
are not regulated globally, whether through inter-
national agreements or by independent international
agencies, they not likely to be regulated successfully.
Hence stakeholder firms short support global regu-
lation, at least in the long run.
Globally distributed emittents
A detectable level of emittents from a given release
event will spread out over a region that depends on
quantity, detectability, degradation rate, and mobility
of the emittent, and also on wind and water currents
and on the period of time between emission and
detection. However, any persistent and moderately
mobile emittent released in sufficient quantity will
eventually be detectable everywhere on the globe.
DDT, for example, is still detectable everywhere on
the globe now, several decades after its production was
banned in the U.S. (for citations, see Schafersman,
2000). Morever, any persistent emittent released
cumulatively in quantities that are large enough in
relationship to its level of hazard, will eventually cause
damage throughout the globe. DDT, for example,
which is believed to cause egg shell thinning that re-
duces the survival rates of certain bird species, is still
being found in the tissues of those birds.
It follows that every persistent emittent poses a
global regulatory problem. While it is possible that
cumulative production quantities and hazard levels
are and will remain low enough for a particular
emittent that it need never be regulated, there is no
way to know whether or not that is case prior to a
careful regulatory examination. Therefore, in order
to successfully manage pollution as a global problem,
every persistent emittent should presumptively be globally
regulated, at least up to the point of determining from
time to time that no limits are currently needed.36
Some non-persistent emittents will also present
global problems because of a combination of high
mobility and high hazard. These emittents should be
regulated like persistent emittents.
The burden of proof for global regulation
Thus there is a threshold problem of deciding
whether or not a given emittent requires global
regulation. In some cases, global regulatory agencies
might be able to settle this issue categorically. For
example, substances that naturally occur in human
environments in significant quantities could be
presumed not to be global nuisances until there is
evidence to the contrary. However, in the case of
new artificial substances, categorical rules will usually
be unhelpful. The choice finally comes down either
to burdening the regulator to show potential haz-
ardousness – ‘‘innocent until proven guilty’’ – or else
to burdening the producer to show probable
innocuousness – ‘‘guilty until proven innocent.’’
Also, once a decision has been made to impose
global regulation, we must assign the burden of
proof for determining acceptable rates of emission
(or whether any level of emission is permissable).37
Thousands of new artificial chemical are invented
each year, and the rate keeps increasing.38 A rather
substantial fraction of those new chemicals are likely
to be hazardous in various ways.39 Flooding the
environment with new and untested chemicals
would in effect (and at present actually does) use all
human beings as involuntary test subjects. Ordinary
people overwhelmingly report in public opinion
330 David Burress
polls that they oppose involuntary applications of
untested artificial chemicals to human beings (e.g.,
Morris et al., 1993). The stakeholder corporation,
though not the neoclassical corporation, should have
a long-run interest in supporting regulations that
respect those views.
At the same time, the introduction of new tech-
nology has always used human beings as partially
involuntary test subjects. Moreover, new technology
has great benefits to ordinary people. I am aware of
no attitude surveys weighing trade-offs between the
benefits of new technology and the costs of serving
as involuntary guinea pigs. It is not feasible to test all
new technologies perfectly before they are intro-
duced into the human environment. Presumably,
there is some positive level of risk that average
people would be willing to accept in order to enjoy
the general benefits of progress and a steady stream
of new technology. The problem lies in setting an
appropriate level of risk.40
Assignment of the burden of proof has strong
implications for the level of risk imposed on the
public: risks will be substantially higher if govern-
ment regulators accept the burden than if private
innovators accept it. Regulators (like government in
general) have relatively fixed and limited budget
constraints, so the studies they are able to fund and
instigate on their own will normally leave large gaps
(e.g., as in U.S. Labor Department studies of
workplace safety). If the burden rests on the inno-
vator then there will normally be no gaps (e.g., as in
FDA approvals of new drugs).
Arguing from an oversimplified model of inno-
vation, the axiom of cost internalization implies it is
socially efficient to place the full costs of safety
analysis on the producers of a new technology. In
particular, if innovators can use patents and other
devices to recapture the full social benefits of inno-
vation in the form of profits, then they will enjoy the
full social benefits of any innovation. If they bear the
full social costs as well, then they will make socially
optimal investments in innovation. Therefore the
innovating firm should accept the main burden of
showing that global regulation is not needed, or if it
is needed, that some particular level of emission is
safe.41
Under more realistic models of innovation, firms
are likely to underinvest in innovation, mainly be-
cause of ‘‘spillovers’’ – i.e., some benefits of inno-
vation are absorbed by customers, suppliers,
competitors who mimic the innovation, future
innovators, and government taxation (Jaffe, 1998).
Consequently, achieving socially optimal innovation
generally requires a degree of public subsidy.
Assuming no better form of subsidy is available,
one possible form consists in shifting the burden of
proof from innovators to regulators. This reduces
costs to innovators, but at the social cost of a higher
level of public risk.
However, it already the case that a wide variety of
direct fiscal subsidies are available for innovation in
the U.S. and elsewhere. These fiscal subsidies in-
clude government grants, use of spinoffs from uni-
versity research, R&D tax credits, and numerous
state and local economic development programs in
every state of the union.42 If existing fiscal subsidies
aren’t high enough, they could be increased. There
are many policy reasons for preferring fiscal subsidies
over the socialization of risk: fiscal subsides are more
transparent (it’s easier to measure the amount of
money involved); they are openly adopted in a
democratic manner on a case-by-case basis; they
seem more fair to ordinary citizens than risk subsi-
dies; (in my view most importantly) fiscal subsidies
are paid in fungible dollar terms, while risk subsidies
are paid in the nonfungible coins of environmental
loss, bad health and death.43
Transparency, the first of these policy reasons,
cuts both ways. Fiscal subsidies, like all government
programs, are limited by the government’s budget
constraint. Government programs are typically un-
derfunded, in the sense that the marginal benefit
from a dollars’ program expenditure usually exceeds
a dollar in social value.44 Hence fiscal subsidies to
innovation are likely to be underfunded. As with any
subsidy, its supporters will look for an off-books way
to increase the subsidy. Shifting the burden of proof
is one such way.
Government programs are generally kept on-
books and visible for a very good reason: citizens
want to maintain oversight. The stakeholder cor-
poration should support fiscal subsidies to innova-
tion, while keeping the burden of proof on
producers of new emittents. The neoclassical firm
should attempt to externalize cost whenever possi-
ble, hence should support putting the burden of
proof on regulators (even if it leads to negative
externalities that are ‘‘unfair’’ or socially inefficent).
What Global Emission Regulations should Corporations Support? 331
Implications of dynamic sustainability
Any emittents generated today could potentially be
cleaned up using tomorrow’s more effective tech-
nologies. Therefore any given future effect of pol-
lution can conceivably be ignored. This argument
probably implies no particular change in the
threshold question of whether to trigger global
regulation, but it does suggest change in the level of
control. I will argue, however, that any such changes
would be slight.
Let us imagine, for example, that a technology for
cleaning up a given substance emitted today is ex-
pected to exist tomorrow, such that:
� expected costs of cleanup tomorrow, when
discounted to the present, are less than the ex-
pected benefits of relaxing emission regulations
today;
� the costs of developing the new cleanup tech-
nology will be borne by producers of the
emittents;
� the two previous conditions are known to true
with high reliability and relatively low risk;
� the costs of establishing truth of the two previous
conditions are borne by producers of the emit-
tents.
Then it would clearly be justified under all
four ethical theories to base emission controls on
current nuisance levels only, while ignoring future
nuisance.
However, if any one of the above conditions fail
to hold, then relaxing the level of control is not
justified (except under neoclassical ethics). If for
example we allowed extra emissions based on the
mere plausibility of future cleanup, then in most
cases emission controls would have to be relaxed,
because future techniques may plausibly exist to
clean up any global pollutant at low cost.45 Our
historic experience however has been that ex post
cleanup of pollution is immensely expensive, so
mere plausibility of cheaper cleanup in the future is
an unsatisfactory basis for imposing high costs on the
next generation. Moreover, efforts (including formal
efforts) to forecast technology have historically been
unreliable and nearly always over-optimistic.46
While continued technological progress could
eventually produce almost any imaginable miracle,
most of the hoped-for miracles won’t happen soon
enough to help the next generation.
Phase-in rules
Stakeholder corporations (like all corporations) have
strong short-run interests contrary to regulation of
their currently existing emittents. To advance those
interests, they should support well balanced transi-
tion rules that put some costs of regulation off into
the future. For example, all new chemical species
introduced after a certain date could be subject to
full regulations, while existing species could be given
special status for a limited period of time. Special
status might warrant temporarily shifting the burden
of proof to regulators, allowing temporarily higher
levels of hazard, or initially assigning some emission
rights to producers.
In this regard, it should be noted that corporate
stakeholder ethics are different from common and
Marxian ethics. Average people would benefit much
less from short-run corporate profits than would
corporate stakeholders. Consequently both the
common ethics and Marxian ethics would be much
less favorably inclined to support phase-in rules.
Neoclassical corporations, on the other hand,
should support the most dilatory phase-in rules that
are politically achievable.
Conclusion
Stakeholder corporations have an affirmative ethical
obligation to lobby for strong and uniform interna-
tional controls over emissions. Their obligation is
not merely to refrain from opposing regulation. In-
stead, there is an affirmative obligation to support
regulation. This obligation flows primarily from
long-run a concern for the well-being of its stake-
holders, coupled with the unique position of the
firm in providing relevant information to legisla-
tures. This obligation does not preclude advocacy for
transitional rules intended to protect short-run
profits.
Stakeholder firms should also support careful
attention to the detailed design of regulatory
mechanisms from the point of view of social effi-
ciency, regulatory effectiveness, and fairness (topics
332 David Burress
on which there is a large literature). In the long run,
optimal designs are likely to include features such as
free trading of emission rights; fair and efficient
initial distribution of emission rights; globally de-
fined tort rights; innovation subsidies to help offset
impacts of regulation on technological progress; full
public accounting for all material inputs and outputs
of each enterprise; organizational approaches to
speed up regulatory action.
In contrast, strictly neoclassical corporations are
bound by profit maximizing interests. Consequently
they have no ethical duty to support regulation. On
the contrary, their duty to maximize profits generally
obligates them to oppose all regulation of emissions,
at least in the short run.
A case can be made that lobbying behavior of
actually existing international corporations generally
resembles the neoclassical standard and is far re-
moved from the stakeholder standard (e.g., Beder,
1997). Corporations often lobby against environ-
mental regulations, while there are few cases of
corporations supporting them.
Assuming that corporations have the power to
influence regulations and not merely to obey or
disobey them, we should ask whether strict neo-
classical theory is an appropriate ethical theory at all.
I would argue that it is not – i.e., that the recom-
mendations of strict neoclassical theory violate most
people’s sense of what the primitive ethical facts of
the case are.
According to the neoclassical thesis, social welfare
can be maximized if production is performed by profit
maximizing firms that are constrained by competition
and by appropriate government regulation. If corpo-
rations have some degree of market power and are in
the position of choosing their own governmental
constraints, this thesis makes no sense. Profit maxi-
mizing corporations that can set their own rules will
simply set them so as to maximize profits. This would
generally imply, for example, no controls at all on
corporate emissions. Such an outcome does not
maximize welfare (if, as it is commonly understood,
welfare means an equally weighted aggregate of
everyone’s utility). This violates the underlying pre-
mise that maximizing private profits simultaneously
maximizes social welfare. Thus, if corporations have
the power to set, or even to seriously influence, the
rules under which they operate, the ethical premises of
neoclassical theory are void.
Corporate managers no doubt have different
exigencies than other stakeholders. Perhaps the
question is fundamentally one of incentives. For
example, corporate managers have short-run
employment contracts that may impose a short-run
view. If their incentives were changed, corporate
behavior might change towards stakeholder norms.
One kind of countervailing incentive can be
simple public recognition of moral obligation – i.e.,
jawboning and moral suasion. If corporate leaders
are faced with clear social messages that their existing
behavior is wrong, then voluntary change may be
possible. And if there is social agreement but no
change in behavior, then stronger sanctions are
possible.
Taking such steps depends on reaching social
agreements. The purpose of an essay such as this is to
provoke negotiations toward social agreement on
what obligations corporations should actually have.
Acknowledgments
This work was supported by the University of Kansas.
The author received helpful comments from participants
at the Multidisciplinary Conference ‘‘Corporate
Responsibility: The Global Environment’’ at the Thun-
derbird American Graduate School of International
Management, Glendale AZ, October 11, 2002; and from
two anonymous referees.
Notes
1 A point made previously in the corporate citizenship
literature. Thus Derber (2003) argues that corporations
should lobby for law changes to support a stakeholder
approach; Paladino and Willi (2002) say that corporations
do and should exert ethically guided political leadership.
This point is beginning to work its way into accepted
standards; thus the 5th general policy principle of the
OECD Guidelines for Multinational Enterprise (OECD,
2000) states that multinational companies should ‘‘refrain
from seeking or accepting exemptions not contemplated
in the statutory or regulatory framework related to
environmental, health, safety, labour, taxation, financial
incentives, or other issues.’’2 Friedman (1962, 1970) is the seminal source, but his
approach is not quite ‘‘strict’’ – see footnotes 7 and 11
below. As Friedman insists, profit maximization is an
ethical principle, owed by managers to shareholders.
What Global Emission Regulations should Corporations Support? 333
3 Similar conclusions are reached more informally by
California Global Corporate Accountability Project
(2002).4 Particular emission regulations tend to reduce private
productivity in the regulated industry while increasing
social productivity. The aggregate of all regulations could
conceivably either reduce or improve average private
productivity of firms. However, it is not obvious what
effect either direction of change would have on the
average rate of profit. The rate of profit is related mainly
to the distribution of income between capital and other
factors of production, rather than to private or social
ability to produce that income.5 In the sense of Olson (1971). In particular, the effects
of an ideology are shared broadly across many policies
affecting many interests, while the costs of establishing an
ideological regime are generally large in comparison with
the benefits for any one political actor.6 Corporate support for laissez faire ideology is not
consistent with the goals of the stakeholder corporation
as developed below. It can be consistent with goals of
the strict neoclassical corporation, but supporting other
ideologies can also be consistent, depending on empir-
ical conditions. For example, neoclassical corporations
might reasonably focus solely on maximizing profits and
take no stand on ideological issues, because doing
otherwise would not benefit the firm (e.g., because of
free rider problems). Alternatively, a very large neo-
classical firm might have a medium-run motive to
support regulations maximizing social welfare because it
is positioned to share in global increases in welfare.
Since profit-making is its only standard, the ideology
supported by a neoclassical firm does not have to be
either ‘‘true’’ or consistent with normative neoclassical
theory. And in particular, laissez faire ideology is not
consistent with the ‘‘invisible hand’’ underpinnings of
neoclassical theory – except under unpersuasive eco-
nomic assumptions such as zero transaction costs and
absence of externalities. Thus, in a realistic model that
includes market imperfections, laissez faire policies do
not maximize welfare – hence strictly profit maximizing
behavior can be normatively justified only in a
regulated environment. It has been argued to the
contrary that neoclassical ethics and laissez faire ideology
can be jointly justified by theories of government
failure. These arguments are unpersuasive. To say that
firms ethically should maximize profits, and also should
support laissez faire policies, even in the face of known
market failures, is to assert that all efforts to remedy
those failures will predictably decrease welfare, whether
those efforts consist in intervention on the part of
government, or in particular ethically motivated behav-
iors on the part of the corporation. Such an assertion
has no basis either in evidence or in generally accepted
economic theory.7 However, Friedman’s normative theory does include
certain ethical standards in addition to profit maximization:
‘‘there is one and only one responsibility of business – to use
its resources and engage in activities to increase its profits, so
long as it stays within the rules of the game, which is to say,
engages in open and free competition, without deception
or fraud.’’ (Friedman, 1962, p. 133). (But why just these
particular standards? Also, exactly which ‘‘rules of the
game’’ should the corporation recognize?)8 Thus the Business Roundtable (1997, p. 3), an organi-
zation of CEOs of major corporations, recently declared
‘‘the paramount duty of management and the board is to the
stockholders; the interests of other stakeholders are relevant
as a derivative of the duty to stockholders.’’ That describes a
perfectly strict neoclassicism.9 Fleming (1987) found that Friedman was the most
widely cited authority in business ethics, with both
approval and disapproval. However, I have not found
a thorough appraisal or synthesis of that discussion.10 Modern empirical theories of industrial organization
relax these assumptions, for example, by introducing
agency and information costs within the firm. Any such
relaxation apparently opens the door to empirical and
normative considerations paralleling stakeholder theory.
Thus there is a sense in which strict neoclassical theory
and stakeholder theory bracket all possibilities that occur
in recent mainstream economics literature.11 Or more specifically on corollaries of the First
Theorem of Welfare Economics (see e.g., Little, 2002,
Chapter 3). The competitive equilibrium maximizes a
‘‘one dollar one vote’’ welfare function, i.e., an
aggregate of individual utilities in dollar metric (with
the equilibrium prices used as reference prices to
normalize the dollar metric). Friedman (1962, 1970)
makes a number of normative arguments in addition to
the invisible hand argument, but none of them seem
compelling if the invisible hand theorem fails. In
particular, if in fact the world would be a better place
if shareholders required their managers to obey specific
ethical rules, then most people would say that share-
holders do have some degree of obligation to impose
those rules, and managers to follow them.12 Smart (1967) points out that the Kantian categorical
imperative can usefully be viewed as a form of rule-
utilitarianism concerned with ideal rules in an ideal
society (as contrasted with practical rules in an existing
society). Hence stakeholder theory might best be sum-
marized as a form of ‘‘ideal-rule-utilitarianism.’’13 For a survey of theories of crime, see Vold and
Bernard (1986). The sole near-exception is that rational
choice deterrence theory treats conscience and social
334 David Burress
pressure as exogenous or random uncontrolled variables.
The empirical successes of deterrence theory are far from
overwhelming (e.g., Leamer, 1983).14 Of course this oversimplifies a complicated issue. For
example, in face-to-face societies law-abiding behavior
can be enforced through social pressure. However, by
assumption the strict neoclassical corporation can select,
acculturate, associate, and reward its employees appro-
priately so as to overcome any aversion they may have to
external disapproval. Also, it is certainly possible to have
social structures based on terror in which each individual
monitors the good behavior of every other individual.
The collapse of the Soviet empire showed us once again
just how unstable such arrangements are.15 The argument is presented here as if in a world of
perfect certainty. Risk and uncertainty strongly reinforce
the same conclusions.16 In particular, nothing abides forever. To a utilitarian,
the point of maintaining existence during the period
between now and inevitable doom is to enjoy some
quality of experience that could happen in that interim.
The enjoyment of experience is variable. The ultimate
utilitarian measure of the value of a positive increment in
that enjoyment would be the degree of willingness to
sacrifice part of the later period of survival in order to
obtain it now.17 Studies suggest that a diversified portfolio of stocks can
be expected to have a long-run real return of 8% or 10%
per year. (Even in the recession year 2001, the median
return on equity of Fortune 500 companies was 10.4%;
Fortune, 2002.) Since market stock investments are always
available to the firm, the market rate of return creates a
hurdle that any internal investment must meet. The
internal discount rate substantially exceeds the market rate
because of taxes, risk aversion, and capital constraints that
prevent funding all available projects.18 With a market discount rate of q, profit growth rate of
g, and profit rate of pegt, the market value at time t is (p/(q) g)) egt. If the internal discount rate is r, then the internal
present value at time 0 of the firm’s market value of time t
is (p/(q -g))e)(r)g)t. If for example r)g > q)g > 0.08/year
and t > 70 years, then the ratio of that present value to
current annual profit [i.e., (1/(q)g))e)(r)g)t] is consider-
ably less than 0.1.19 That this is a fact can be empirically supported in
numerous ways. For example, willingness-to-pay studies
using ‘‘contingent evaluation’’ or ‘‘conjoint analysis’’
methods find substantial verbal expressions of support for
sacrifice now to preserve the future ecology. Also, the
substantial popularity of environmental preservation laws
strongly suggests a general interest in future generations.
Other evidence can be found in substantial bodies of
fictional and reportorial literature, in the very substantial
membership rolls of environmental action groups, and in
substantial formal academic work on environmental ethics.20 It might be countered that, since utility functions are
heterogeneous, the preferences of stakeholders in some
particular corporations might not happen to place any
substantial value on the welfare of future generations.
There are two objections to this argument. First, in a
major corporation, most stakeholders are not personally
known to managers of the corporation, so it is necessary
to make decisions based on average utility functions, and
average utility functions do in fact place a positive value
on future generations. Second, stakeholder theory is
rule-utilitarian, not goal-utilitarian. The manager’s prob-
lem is to formulate procedural rules that are likely to
maximize utility on average, rather than to hyperop-
timize using all the available information about specific
cases.21 In addition we must assume that the stakeholders’
utilities can increase even when they are benefitting from
unethical acts, and they know it. That seems entirely within
the realm of human possibility.22 Moreover, this problem cannot be resolved adequately
by appealing to rule-utilitarianism. In principle, there
could exist distinguishable classes of situations for which
the welfare maximizing rules under stakeholder theory
require the firm to act against common ethics. Perhaps a
more Kantian approach could address this problem by
requiring the stakeholders themselves to express only their
higher ethical nature.23 It might also be argued that stakeholder theory
simply does not fit comfortably into a utilitarian
framework. While that may be true, no other frame-
work leads to equally crisp predictions. In the Kantian
framework, for example, it is hard to determine exactly
what concrete obligations might be imposed by the
principle of equal respect for others.24 For example, if our generation exhausts certain scarce
resources while leaving a bundle of new knowledge, but
that knowledge turns out to be less useful than was
anticipated, then future generations could be severely
disadvantaged. It is certainly possible to leave an exces-
sively large bundle of new knowledge as a kind of
insurance policy against this sort of risk. It does not seem
possible however, to place great confidence in our ability
to predict the level of risk. For example, how much and
what kind of technological insurance policy can or should
we leave against the possibility of a global ecological
collapse? It is not sufficient to argue that the best scientific
information predicts no such collapse, first, because
science could be wrong, and we need to insure against
that possibility; second, because in fact some scientists do
predict a collapse; third because that outcome is highly
sensitive to future political decisions whose rationality
What Global Emission Regulations should Corporations Support? 335
cannot be guaranteed. I am not aware of economic
models that have addressed this question seriously.
Moreover, that is not the only hard question that can
be raised. For a discussion of much more stringent
definitions of sustainability that nevertheless attempt to
appeal to scientific principles, see The Mundi Club
(2002).25 The Bergen Declaration (1990) summarizes the Pre-
cautionary Principal, in part, as: ‘‘where there are threats
of serious or irreversible damage, lack of full scientific
certainty should not be used as a reason for postponing
measures to prevent environmental degradation.’’
According to the Commission of the European Com-
munities (2000), ‘‘this principle has been progressively
consolidated in international environmental law, and so it
has since become a full-fledged and general principle of
international law.’’ For a critical response see Katz (2001).26 The literature denying these facts is also substantial, but
that they are facts has been supported in statements by
essentially every relevant scientific organization. The
leading summarization is by the Intergovernmental Panel
on Climate Change (2001).27 Singer (2002, chapter 2) proposes equal per capita
allocations, on loosely argued utilitarian grounds.28 E.g., the U.S. has recently spent under 0.1% of GDP
on non-military foreign aid (United Nations, 2001, p. 3),
but over 5% of GDP on carbon-based fuels (U.S.
Department of Energy, 2003). At present, substitutes for
carbon-based fuels are considerably more expensive than
carbon-based fuels.29 As reflected for example, in the classic (and utilitarian)
legal decision on the tradeoff between potential damages
and mitigation costs, given in Hand (1947): mitigation is
required as a matter of equity only when expected
benefits exceed expected costs.30 Note in particular that income redistribution is
somewhat difficult (though not impossible) to justify
under a ‘‘one dollar, one vote’’ ethical standard. For that
reason, the preceding arguments on fairness appeal to the
political economy of perceptions, rather than to the ethics
of income redistribution.31 This statement follows conventional practice in gloss-
ing over two technical points. First, private net benefits
are different kinds of things from social net benefits; to
make them comparable, you need special assumptions on
how both measured. Second, it is sufficient for welfare
maximization that merely the signs of changes in private
and social net benefits be equal.32 While unwanted emissions do not constitute the only
possible class of environmental threats, they constitute
one of just two major classes. The second class consists in
the over-exploitation of natural resources: animal and
plant species that are driven to extinction, habitats that are
destroyed, non-renewable resources that are used up,
renewable resources that are exploited past the point of
peak production. Problems of emission could formally be
viewed as a subcategory of over-exploitation, in which
opportunities for free disposal have been over-exploited;
but in practice the regulatory methods for the two classes
are entirely distinct. Emission is a putting into the
environment, which needs to be regulated at the loci of
production and consumption. Exploitation is a taking
from the environment, which needs to be regulated at the
loci of the environmental taking. This essay is concerned
only with emissions.33 That is, I know of no substances for which a single
molecule released into the public environment consti-
tutes a nuisance. At the same time, even small numbers
of unwanted molecules can be problematic within
certain controlled high tech production processes. Also,
very small numbers of certain viruses can constitute a
threat.34 Arguments for global regulation of local pollution
could still be made however, for example, on grounds of
administrative efficiency, environmental justice, or equi-
table competitive advantage, but those issues are too
complicated to analyze here.35 Also, there is a distinction between local concentration
at the point of emission, and local concentration occurring
elsewhere due to natural or artificial processes of accu-
mulation (e.g., concentrations of DDT in fat cells that
increase up the food chain). To simplify the discussion I
will abstract away from non-local accumulations.36 This point is both key and highly controversial. The
discussion above is only a sketch of the full analysis that is
needed. In particular, an effort should be made to place
lower bounds on the probabilities of catastrophes of
various sizes, based on cases already uncovered (such as
ozone depletion and egg shell thinning) in relation to
numbers and mass of chemical species already released
into the environment. It is also relevant that large
numbers of artificial chemical species are now being
found in human bodies (Environmental Working Group,
2003); see footnote 39 for a presumption that many of
these species are hazardous.37 There is also a separate question of the required level of
proof in each case – for example, beyond a reasonable
doubt, substantial persuasion, or preponderance of evi-
dence – which we will not analyze here. However, risk
aversion combined with the explosively increasing num-
bers of novel substances being invented suggests that a
strict standard will eventually be needed.38 About 75,000 chemicals are presently licensed for
commercial use; over 2000 new synthetic chemicals are
registered every year; the Environmental Protection
Agency has tallied close to 10,000 chemical ingredients
336 David Burress
in cosmetics, food and consumer products alone (Envi-
ronmental Working Group, 2003). However, the vast
majority of chemicals synthesized in laboratories are never
registered. Computerized indices list millions of described
entities; for example, GenomeNet (2002). Also, all
chemicals have multiple break-down products, most of
which are never registered.39 Merck (2003) describes some 10,000 important chem-
ical entities and closely related classes. A hazmat guide by
Patnaik (1998) describes some 1500 seriously hazardous
chemicals. The ratio suggests that some 15% of described
chemicals may be seriously hazardous.40 There is also an ethical problem in imposing any given
level of risk on a minority which doesn’t agree to it.
Certainly, a degree of involuntary risk imposition is
inherent in the fact that we all occupy the same world.
Still, there is a moral asymmetry between bearing
involuntary risks and receiving voluntary net benefits,
which suggests we should adopt an extra degree of risk
aversion in determining our techno-social experiments,
going beyond that degree of risk aversion held by the
average person with regard to risks to him/her self.41 This approach can be viewed as an application of the
Precautionary Principle. It has actually been written into
law in embryonic form in California (1986), which
requires the governor to create a list of potentially risky
environmental chemicals that have not been shown to be
safe. Earlier, the 1958 Delaney Clause had already taken
the next step of preventing distribution of substances not
shown to be safe, but it is limited to cancer risk in foods.42 E.g., for a very detailed description of numerous state
and local R&D subsidies available in six Midwestern states,
see chapter 3 of Buress, Oslund and Middleton (2003).43 Nonfungibility implies the social cost from socializa-
tion of risks is considerably higher than the social cost
from providing direct subsidies of equivalent value.44 That outcome is likely because the social cost of raising
a dollar in revenue generally exceeds a dollar – i.e., there
is an ‘‘excess burden’’ of taxation due to compliance costs,
price distortions, etc. To the extent that government is
reasonably efficient, the marginal social benefit of each
program equals or exceeds the marginal social cost of
raising revenues to support it (hence the ‘‘excess benefit’’
of services offsets the ‘‘excess burden’’ of taxes).45 For example, a generalized ‘‘nanotechnology’’ in
which tiny self-replicating agents accomplish practically
any task that can be broken down into small segments is a
future technology sufficiently plausible to be discussed
seriously in Scientific American (2000). Such technologies
could arguably clean up any pollutant (other than self
replicating ones) at a low cost. Nor is setting a higher
standard than mere ‘‘plausibility’’ a particularly useful
device, as argued below.
46 See for example, the 1964 Rand Delphi forecasts of
technology reported by Cetron (1969, p. 93). A
substantial majority of innovations predicted as likely to
occur at various times between 1965 and 2000 have not
happened yet, and most others happened much later than
expected.
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E-mail: [email protected]
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