International business and global climate change

Approaches to climate change: Technology and institutions

Climate change represents the ultimate trade-off between human wellbeing and the burden placed on the natural environment. The criticality of this trade-off appears in stark relief when the UN's Human Development Index is graphed against the earth's current bio-capacity. The earth's bio-capacity is characterized by the ecological footprint, the ratio of the demand for products divided by the availability of resources. In 1980, a few countries appeared in the rectangle marking the intersection of “high human development” and “a sustainable ecological footprint”; by 2006, there were none (Ewing et al., 2009). Countries with sustainable ecological footprints, primarily in Sub-Saharan Africa, have low levels of human development. Countries with high levels of human development, typified by the OECD, have unsustainable ecological footprints.

While this represents a challenge for all international business (IB) scholars, it is particularly relevant for technology scholars and those who study international institutions. Technology scholars are concerned with the supply side of the trade-off. Improving technology guided by appropriate technology policy increases the bio-capacity of the earth by making possible high human development with fewer resources or the discovery or invention of new resources (Smith, Voß, & Grin, 2010). International institutions mainly work on the demand side, by addressing the problems of negative externalities that give rise to “tragedies of the commons” (Mudambi & Navarra, 2002). Relatively poor, emerging economies are less willing to sacrifice economic growth on the altar of sustainability than are prosperous ones. Institutional rather than ad hoc solutions are necessary to resolve these understandably different ideological viewpoints.

Lundan's review analyzes a very important attempt by IB scholars to come to grips with this crucial challenge. She reviews the literature, places the research in context and makes cogent arguments that suggest important directions for new research.

Ram MudambiJIBS Book Review Editor

REFERENCES

• Ewing, B., Goldfinger, S., Oursler, A., Reed, A., Moore, D., & Wackernagel, M. 2009. Ecological footprint atlas. Oakland: Global Footprint Network

• Mudambi, R., & Navarra, P. 2002. Institutions and international business: A theoretical overview. International Business Review, 11(6): 635–646.

• Smith, A., Voß, J.-P., & Grin, J. 2010. Innovation studies and sustainability transitions: The allure of the multi-level perspective and its challenges. Research Policy, 39(4): 435–448.