ABSTRACT
In this chapter we discuss how companies are implicated in the global carbon crisis. We use the term “carbon constraints” in a broad sense to refer to limitations regarding established utilization patterns of the element carbon and the corresponding impacts on business conditions. These limitations pertain to direct, physical effects as well as to indirect, human-induced effects. Furthermore, they also involve carbon-related feedback loops, which comprise impacts on weather, river and mountain systems, and agriculture. As such, our use of “carbon” in the term carbon constraints does not follow a narrow definition; it also covers other non-carbon-containing greenhouse gases as well as the direct negative effects of climate change (Lowe 2000; Hashimoto 2004; Busch and Hoffmann 2007; Hoffmann and Busch 2007). From a business standpoint, we define “constraints” as any sort of influence that limits the conditions by which firms conduct business and their efforts towards attaining profit. As such, carbon constraints are directly related to the profitability of corporate production processes and activities. This chapter examines the potential negative effects of carbon use in the industrial process along with its respective sources. How important it is for businesses to strive for low-carbon opportunities and generate competitive advantage 14through proactive climate change and carbon management strategies will be discussed in the third chapter.
