The idea of public benefit is well established in welfare economics. In fact, Pigou already in the early twentieth century (1937: 184) described situations in which positive externalities exist and, in doing so, he provided some of the first examples of public benefit or public goods (the two terms are not synonymous) that are created through private actions:
It is true, in like manner, of resources devoted to afforestation, since the beneficial effect on climate often extends beyond the borders of the estates owned by the person responsible for the forest (ibid.).
Public goods, like a better climate described by Pigou (1937), are characterised by non-rivalrous consumption and non-excludability (Bannock et al., 2003).
But environmental goods are often common goods, meaning that it is rivalrous (unlike public goods) but non-excludable (like public goods). The best example would be fish stock. No-one can be excluded from fishing, but catching a fish means that it is unavailable to the next person, i.e. it is rivalrous (Ostrom, 1990; Hardin, 1968).
3.6.2 Socio-environmental value
Narrowing the construct of value to only economic value has been criticised on the grounds that it could obscure aspects of value that extend beyond profit and economic return (Harrison & Wicks, 2013: 98; Hausman & McPherson, 2006). The researcher suggests that environmental coopetition creates socio-environmental value in addition to the potential for economic and knowledge value (Dagnino & Padula, 2002).
The term socio-environmental value is closely comparable, but not limited, to the value provided through eco-system services as defined by Alcamo and Bennett (2003) and Total Economic Value as defined by Pearce and Moran (1994). Table 3.4 provides a comparison of different classifications of value.
From Table 3.4 it follows that socio-environmental value includes both anthropocentric value (Hattingh, 2009) and intrinsic value (Rolston, 1986), and excludes value that is rivalrous, i.e. value that can be captured by companies as common or private benefit. Socio-environmental benefits as used in this dissertation are thus best described as the sum of intrinsic ecological value and benefits that accrue to society because of environmental improvements.
By implication, all environmental value is public, but not all public goods are socio-environmental in nature. For instance, in the joint logistics example used earlier (see Table 2.5), there is a potential reduction in carbon dioxide emissions. The benefit to society is an improved environment and reduced climate change. Such a benefit would be a socio-environmental value and a public good. On the other hand, it may be that the initiative leads to lower maintenance costs of roads, which is a public good but not a socio-environmental benefit.
Table 3.4: Comparison of value-related terminology
Categories
Value of provisioning services such as the actual use of the produce of nature (fish, timber, etc.).
Indirect use value
Ecosystem functions that provide value in the form of regulating services (flood control, disease control) and supporting services (nutrient cycling and habitat provision).
Option value
The willingness of an individual to pay to safeguard an environmental resource for
using it in the future.
Non-use value
Bequest value
The benefit accruing to any individual from the knowledge that others might benefit from a resource in future. This may include the value of spiritual, recreational, aesthetic benefits (cultural services).
Existence
value Value deriving from a person’s concern for simply the existence of any particular environmental asset, for instance the African Rhino, although they have never seen one.
Intrinsic value
The value of a species or nature when there
is no one to do the counting (Rolston, 1986).
Public goods are non-rivalrous (the consumption of the good by one person does not deprive another of its use), non-excludable (it is impossible to exclude a person from using it) and are often (but not always) also non-rejectable in that individuals cannot abstain from using it, even if they wish to. (Bannock, Baxter & Davis, 2003)
Common goods are non-excludable but rivalrous. (Ostrom, 1990; Hardin, 1968)
Source: Adapted from Pearce & Moran, 1994; Alcamo & Bennett, 2003; Hattingh, 2009;
Ostrom 1990; Hardin, 1968; Bannock et al., 2003.
3.7 CONCLUSION
This chapter reconciled different bodies of knowledge with that of coopetition literature in order to form the foundations for the theoretical model to follow in the next chapter.
The chapter introduced the three broad drivers of environmental activities, namely: legitimacy, the financial business case and the moral responsibility argument (see the grey pie-chart area at the centre of Figure 3.11). Legitimacy translates to value through secondary mechanisms like lower interest rates on loans and reduced reputational risk. Because the dissertation explores value, the chapter therefore continued to explore legitimacy and the financial case more than the moral case.
This chapter introduced the idea that companies create value through the strategies that they choose, albeit to lower costs, to protect their reputation, or to build reputation. Through collaboration with competitors it is possible for companies to increase the efficacy of their strategies, particularly strategies that rely on industry standards.
Environmental
RQ1: What types of value do companies create and appropriate in environmental coopetition?
RQ2: How do different types of value interact (i.e.
value dynamics) in environmental coopetition?
Figure 3.11: An overview of topics dealt with in Chapter 3
The chapter also introduced stakeholder theory as an expanded lens to assess the impact of environmental (and generic) coopetition. A wider view of coopetition could therefore easily incorporate stakeholder theory. In stakeholder theory, one would also consider public goods that accrue to society (see the grey areas on the right in Figure 3.11).
The chapter lastly introduced the concept of socio-environmental value (see the grey area on the left in Figure 3.11). Socio-environmental value is created when companies collaborate to address environmental issues, but which is a public good, meaning that the benefits are rivalrous, non-excludable and sometimes non-rejectable. Socio-environmental value could also include intrinsic value.
The following chapter explores the coopetition value matrix as conceptual model.