Abstract

In March 1989, the Exxon Valdez ran aground in Prince William Sound, Alaska. It was an environmental tragedy that revealed how ill prepared the nation's ports were for a major oil spill. It also had an unforeseen benefit: it helped launch a new cleanup industry, bio-remediation. The experience further underscored how central corporate responsibility has become to the country's reconciliation of its economic and environmental aspirations, especially if progress in cleaning up our air and water, which has been substantial the past quarter century, is to continue. This reconciliation lies at the heart of the concept of sustainable development. Sustainable development is not just about achieving greater efficiency in the use of energy and materials, which is important, but also envisions fundamental product innovation and the use of less materials. One dimension of the challenge of sustainable development is for government to craft incentives to foster innovation without prescribing corporate behavior. Another is to engage the developing world constructively on such critical issues as water and private investment, which can improve the lives of people, especially the poor. Without the cooperation of developing countries, it is unlikely that global environmental problems like climate change can be addressed effectively.