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Business & Society Questions

Business & the Environment

The UPS Green Fleet

A United Parcel Service (UPS) store is located in Chambersburg, Pennsylvania. The company has established a number of initiatives that are environmentally friendly, not the least of which is the conversion of a portion of their fleet to hybrid electric vehicles. In fact, as of February 2011, the UPS delivery fleet using alternative fuel and technology had driven 200 million miles since the alternative fuel vehicle fleet (AFV) was established. That's the equivalent of circling the globe more than 8,600 times or the equivalent of nearly three round trips to Mars. At the time the 200 million mark was accomplished, UPS had more than 1,900 AFV vehicles and had placed an order for an additional 62 vehicles. All things being equal, UPS believes the AFV will accomplish another 200 million miles mark by the year 2017. The UPS AFV fleet operates in the United States, Canada, Germany, France, Brazil, Hong Kong, and the United Kingdom.

In addition to the Green Fleet, Ups purchased 48 new tractors that operate on Liquefied Natural Gas (LNG) in northern California. UPS will also construct a LNG fueling station that can be accessed by the public. For its operations in London, England, Ups purchased 14 Modec electric vehicles (London has rigorous inner city use standards and restrictions). United Parcel Service continues to explore alternative fuel technologies. Eight different technologies have been utilized, beginning in the 1980s with Compressed Natural Gas (CNG) and propane. In 1998, Ups invested in hybrid-electric vehicles (HEVs) and then in 2004, UPS introduced all-electric vehicles to the fleet. Also in 2004, the first LNG tractors were deployed. In Korea, UPS uses trucks that run on Liquefied Petroleum Gas and is experimenting with hydraulic-hybrid and hydrogen fuel cell technologies.

Given the impact that UPS transportation and delivery operations could have on the environment, the investments that the company has made over the past three decades is remarkable and commendable. That the Chambersburg municipality is stressed by environmental contaminant on the ground (see Figure 1 below) and in the water makes the efforts of companies like UPS to improve air quality all the more important.

Figure 1. Environmental Contaminants - Chambersburg Municipality / Surrounds

Sources: http://www.city-data.com/city/Chambersburg-Pennsylvania.html

http://www.pressroom.ups.com/Press+Releases/Archive/2011/Q1/Expanding+UPS+Green+Fleet+Travels+200+Million+Miles

Economics of Recycling

Chambersburg, Pennsylvania -- Part of a Recycling Chain that Works

A recent study by the United States Environmental Protection Agency (EPA) titled U.S. Recycling Economic Information (REI), demonstrated the economic benefits of recycling to the national, state, regional, and local economies. The study was conducted through a cooperative agreement with various states -- including the Pennsylvania Department of Environmental Protection -- and the National Recycling Coalition. The study concludes that "Recycling is Working." Recycling and reuse programs add direct value to the U.S. economy, generating payrolls of well in excess of $37 billion and grossing over $236 billion in annual revenue.

The Pennsylvania REI results are as follows: There are 3,247 recycling and reuse establishments with 81, 322 employees who are supported by an annual payroll of $2,886,264,000 and which generate annual revenues of $18,398,776,000. Taking these facts to a local level, the total budget for solid waste management in the city of Chambersburg, Pennsylvania, and surrounds is $1,907,000. The amount budgeted per resident is $102.83. The current total cost to operations of the solid waste management department is $1,769,000. The corollary per resident charge is $95.38.

Over 1,700 Pennsylvania communities recycle, which is over three times the number required to recycle by Act 101. Pennsylvania recycling programs supplied industries with over 4.7 million tons of scrap metals, paper, glass, plastics, wood, organics, and other materials in 2004. Pennsylvania encourages variable trash collection rates so that customers pay only for the trash that is collected and is not recyclable. The Pennsylvania Recycling Markets Center is one of several business alliances that ensure the availability of recycled materials.

Downstream economic impacts are generated by local reuse and local recycling programs. Private sector investment in manufacturing that is based on recycled materials help to promote economic growth. The business side of recycling has an indirect impact on industries in the support sectors of office supply firms companies, accounting firms, and vehicle (fleet) maintenance and repair. Employees of the reuse and recycling industry spend money in their local economies that, nationwide, translates into receipts of about $146 billion. The government benefits also as approximately $12.9 billion in taxes was generated, with roughly 80% of the tax revenue directed toward state and federal government.

Recycling encompasses 26 different types of recycling, including organic composters, plastic lumber manufacturers, and computer de-manufacturing, and pavement producers. In fact, four major manufacturing industries conduct more than half of the business that converts recycling and reuse to economic activity. These four industries are plastics converters, steel mills, paper mills, and iron & steel foundries. The recycling business demonstrates vertical integration as it begins with curbside collection of materials, involves a wide range of processors in the recycling stage, and results in the manufacturing of new products that are made wholly or partially of recycled content. The reuse industry benefits substantively from business contributions, particularly with regard to pallet rebuilding, materials exchanges, and computer de-manufacturing. On the low tech end, the reuse industry includes traditional local thrift stores and antique shops. The reuse industry generates annual revenues in the neighborhood of $14.1 billion and supports a payroll of approximately $2.7 billion annually.

Sources: http://www.epa.gov/osw/conserve/rrr/rmd/rei-rw/index.htm

http://www.portal.state.pa.us/portal/server.pt/community/benefits_of_recycling/14061

Government Regulation of Tobacco Products

The most recent battle between the government and tobacco companies has to do with the placement of graphic warning labels on packages of cigarettes. Five tobacco companies, including Reynolds America Inc. (RAI) and Lorillard Inc. (LO) are suing the FDA in U.S. District Court on the basis that the graphic images are violations of the First Amendment's free speech clause. Notably, the Altria Group Inc. (MO), which is the parent company of Philip Morris USA, has expressed concerns about the graphic images but is not a party to the lawsuit.

Reynolds approach to governmental regulation of tobacco has been alternately hostile or arm's length. Cigarette manufacturers were found guilty of having violated federal racketeering laws in the manner in which they sold, advertised, and marketed their products. The cigarette makers are being made by the court to issue and publically display corrective statements. In 2009, a law was enacted that gave the FDA authority to regulate tobacco products. Tobacco companies are arguing that they should not have to respond to the Justice Department when the FDA will be the authority with oversight for tobacco products. The Justice Department claims that the "restrictions on the tobacco industry are important and necessary -- and are unaffected by [the 2009 law]." In 1999, the Clinton administration brought nine tobacco companies and two trade associations to court for engaging in a "50-year conspiracy to deceive the public about the dangers of smoking." The result was a nine-month trial in 2005, at which the defendants were Altria Group, R.J. Reynolds Tobacco Co., British American Tobacco, Ltd., and Lorillard Tobacco Co.

By and large, the tobacco industry has worked diligently to deceive both policymakers and the public about the harmful effects of tobacco use. The tobacco industry has manipulated science and kept research secret and hidden from consumers, it has used third-parties to ensure its agenda is promoted. In addition to interfering with public policy and regulatory policy processes, the tobacco industry had purposefully targeted vulnerable populations.

Altria supports three areas that are intended to impact the way consumers use tobacco. The first is the communication of the health effects of tobacco. This initiative includes health warnings on packaging, small brochures placed n packs of cigarettes, and warnings on websites. The second area is to help reduce the use of tobacco by underage consumers. The company argues…[continue]

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