*{Environmentalism and the New Logic of Business [http://www.weforum.org/site/knowledgenavigator.nsf/Content/Environmentalism%20and%20the%20New%20Logic%20of%20Business?open&topic_id=300600000&theme_id=300]

            07.05.2000

            Mercosur Economic Summit 2000}

            In spite of increased environmental awareness in the decade following the 1992 Earth Summit held in Rio de Janeiro, Brazil, there exists a general consensus that environmental problems are not getting better, but worse, both at the regional and global levels. These problems are evidenced most notably in the destruction of forests, wetlands and coral reefs, the exacerbation of global warming and the increased human and economic costs of natural disasters. Moderated by Geoffrey Dyer, Bureau Chief for the Financial Times in Brazil, the panel sought to address the following questions: What is the role of business in addressing these concerns? How should environmental damage or potential benefits be measured?
            What is the potential profit in sustainable development? What are the particular concerns of Mercosur countries with regard to the environment? 

            For panellist Maria Leichner, Executive Director of the NGO Ecos Foundation in Uruguay, sustainability should be the new paradigm for business leaders as well as consumers. There must emerge a new consciousness of respect for natural resources and the regenerative limits of ecosystems. New markets must take into account water contamination, dangerous residues, desertification and soil erosion, which can be the undesirable side-effects of certain kinds of economic expansion. Leichner went on to argue that in addition to the advantages of the Mercosur partnership for increasing economic activity, implementing common strategies and putting forward a region-specific agenda, it also provides the opportunity to implement coordinated healthy environmental plans for sustainability. 

            Sustainability is also an important economic advantage for businesses, according to Mauricio José Lima Reis, General Manager of the Quality and Environmental Corporate Center of the Brazilian Valley Rio Doce mining company. "Today, environmentalism is about the economy, not about ecology," he stated. As environmental standards become increasingly important to consumers, operating under sustainable environmental practices becomes a significant competitive advantage for businesses operating in the world market. For example, from a business perspective, pollution is an undesirable, because it represents a loss of capital and resources that is measurable using economic figures. Lima Reis cited good returns on his company's investments to reduce pollution and increased profits resulting from the competitive advantage of reduced pollution as support for a new business logic that recognizes the "good sense" of improving environmental practices. 

            With so much attention focused on the "sustainability" of environmental practices, Alicia Barcena Ibarra, Chief of the Environment and Human Settlements Division of the Santiago, Chile based-Economic Commission for Latin America and the Caribbean, underscored the importance of understanding the term in the Latin American context. Region-specific concerns that Mercosur countries should take into account include a large informal economic sector, environmental institutions that are fragile and especially susceptible to shifting political tides, and an export market based principally on the extraction of natural resources, leaving it vulnerable to outside environmental conditionality with little infrastructural support from within.

            Barcena emphasized the need to develop a system of monetary valuation for natural resources, which she believes is derived from increased links between macro- and micro- economic policies in order to take into account local ecosystemic concerns as well as open possibilities for small and medium-sized businesses to benefit from increased environmentally safe practices. Also crucial is the need for clear and transparent consensus between society, governments and the business community as to the rules, incentives and goals for sustainable economic development in the region.

            Most panellists agreed that biodiversity, as a highly-prized environmental "good," helps the region. Old growth forests, such as the Amazon, should be preserved so that continued medical and scientific research can take place. At present, however, there is still a sharp need to develop cogent standards for valuing biodiversity and enforcing environmental regulations in regions that are particularly important in terms of biodiversity. In a comment from the floor, Edward Luttwak, owner of a ranch deep in the Amazon, suggested that existing mechanisms to maintain biodiversity are lacking. NGOs focus almost exclusively on studies, reports and organizing summits, and national parks in the region do not adequately protect endangered species, as is evidenced by continued poaching. Aldo Zuccolillo of the Paraguayan daily ABC Color also joined the discussion from the floor, pointing out the difficulty in protecting the old-growth forests in light of the land problem in Mercosur countries, which causes invasions by landless peasants and, in turn, increases landowners' desire to cut down forests as quickly as possible.

            Sustainability is clearly a key issue in both environmental and economic discussions in the region. The absence of a strong system for evaluating - in economic terms - sustainable development underscores an important concern for Mercosur countries. Increased demand for sustainably produced goods in the world market sharpens the need for a clear consensus between businesses, governments and society, as well as the need to focus on developing an infrastructure for responding to emerging environmental concerns.
                       *{Contributors:       Barcena Ibarra Alicia
                  Dyer Geoffrey
                  Leichner Maria
                  Lima Reis Mauricio José}