In 1987 the World Commission on Environment and Development, sponsored by the United Nations, conducted a study of the world's resources. Also known as the Brundtland Commission, their 1987 report, Our Common Future, introduced the term sustainable development and defined it as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" (WCED 1987). The underlying purpose of the commission was to help developing nations manage their resources, such as rain forests, without depleting these resources and making them unusable for future generations.
The concept of sustainable development has also resonated in the richer countries since it addresses intergenerational responsibility while acknowledging continuing technological change. Unstated was the assumption that intergenerational equity is a core ethic, and that future generations deserve as much opportunity to achieve a high quality of life as present generations.
If the process of sustainable development succeeds, it will lead to sustainability, or that stage of economic and technical development where the use of material and energy is at a steady state. The means for attaining sustainability is green technology, a term that recognizes that engineers and scientists are central to the practical application of the principles of sustainability to everyday life. Green technology will make it possible for sustainable development to lead us to sustainability.
At present human populations are not approaching sustainability. Wackernakel et al (2002) provides evidence that humanity's demand for natural resources has rapidly increased in the last few decades. In 1961, demand corresponded to 70% of Earth's capacity for biological productivity; by the 1980s, demand began to exceed the biosphere's capacity; and by 1999, humans were using 120% of the natural resources the Earth was able to regenerate. In other words, it would require 1.2 Earths to regenerate what humanity used in 1999 (Wackernakel et al 2002). Clearly, this does not meet the test of sustainability.
If sustainability is to be achieved, it has to occur within and in accord with the prevailing economic system. In today's world, the free market system is predominant, and it seems to be gaining ground in competition with others. Therefore, sustainability has to occur within this system, and private corporations have to start practicing green technology if we are to move toward sustainability. The objective of this paper is to ask whether our free market system fails to facilitate the adoption of green technology and perhaps even blocks such adoption. We analyze one example where a large company has expressed its determination to adhere to principles of sustainability and green technology, but has found that such management objectives conflict with the requirements for profitability.
2. Motivation for engaging in green technology
The primary motivation of private business has been profitability, and corporate leaders are judged on their ability to achieve financial success. As Milton Friedman stated so famously, "The one and only social responsibility of business [is] to use its resources and engage in activities designed to increase its profits so long as it ... engages in open and free competition, without deception or fraud" (1962).
About twenty years ago some companies discovered that if they followed the requirements and recommendations of governmental agencies they could alter their production or use of materials and actually save money. This notion became known as pollution prevention pays (PPP) and was embraced by regulatory agencies such as the U. S. Environmental Protection Agency as proof that doing the right thing is actually beneficial. The companies that decided to promote this ideal discovered that not only were they saving money, but they had created a public relations bonanza--they could promote environmental regulations and make money at the same time. …