Intergenerational Fairness and the Crowding Out Effects of Well‐Intended Environmental Policies

Abstract

Sustainability involves the drive to ensure intergenerational fairness. However, the results of actions taken to achieve sustainability often lie far into the future and efforts to promote the welfare of distant generations may or may not ultimately be successful. While both governmental policies and entrepreneurial innovation have been cited as being indispensable to the achievement of sustainability, the manner in which they co‐exist and interact over very long periods of time remains unclear. Using a computational model spanning more than two centuries, this study asks: Do well‐intended environmental policies facilitate or inhibit environmental entrepreneurship? By simultaneously considering both the ethical and economic consequences of efforts to arrest environmental degradation, our study answers the call to develop multi‐disciplinary perspectives and integrative frameworks when addressing the challenges of sustainable existence. Contrary to widely held perceptions, our findings suggest that policy actions may, in the long run, result in less intergenerational fairness by crowding out environmentally desirable innovations and organizations. Our examination of the long‐term interactions between policies and markets offers insights and opportunities for scholars, entrepreneurs, environmentalists, ethicists and policymakers to develop solutions that preserve and extend the essential contributions of both policy actions and entrepreneurial innovations.

Entrepreneurship as a Platform for Pursuing Multiple Goals: A Special Issue on Sustainability, Ethics, and Entrepreneurship

“…In conducting research on organizational forms, business model innovation, and governance, the articles in this Special Issue introduce normative and conceptual aspects and developments that are novel and compelling. The articles also resonate with research on social benefits (McWilliams and Sie gel, 2000), enrichment of the social and even political order (Friedland et al, 2014), and environmental and societal welfares (Hunt and Fund, 2016;Waldron et al, 2016). We feature detailed summaries of the articles shortly but first, as a prelude, we argue that SEE enterprises seek to improve environmental, social, and economic conditions, and that they do so primarily by exploring new organizational forms, business models and innovation, and new governance mechanisms.…”

“…For example, the nested model perspective would likely subordinate the world of trade-offs that is central to economics to a world based on a hierarchical prioritization, thus taking many commercial possibilities off the table. These ending conditions as a start might be fruitfully examined then by researchers using models such as those discussed by Hunt and Fund (2016) or by Shevchenko et al (2016).…”

“…Of course, this lesson is not entirely new. However, we reiterate it to instil a sense of urgency and to stress that many policies that aim to advance sustainability continue to be filtered through single-disciplinary lenses, and that is one of the reasons why narrow solutions are subject to chronic, almost inevitable failure (Funtowicz and Ravetz, 1993;Hunt and Fund, 2016;Perrow, 2011).…”

Creation of ICT-Based Social Start-Ups in Iran: A Multiple Case Study

“…Compared to incremental innovations, imitative ones are less expensive and risky; then, it might be reasonable to choose this kind of innovation. However, social start-up founders are social change agents who look for something more than just an imitation; then, it is more likely for them to follow an incremental innovation plan (Hunt and Fund, 2016).…”

Environmental entrepreneurship as a multi‐component and dynamic construct: Duality of goals, environmental agency, and environmental value creation

“…Moreover, it is frequently assumed that any effect of EE would be positive, but does EE have any negative externalities? For instance, regulations favoring EE in renewable energy might cause crowding‐out effects for private environmental investments or alternate technological developments (Hunt & Fund, ). Does a solution to environmental market imperfections trigger other types of market failures that cause environmental harm?…”