Discuss Economic Factors Private And External Affecting Comp

Discuss Economic Factors Private And External Affecting Company Econ

Discuss economic factors, private and external, affecting company economic decisions for transportation options. Discuss the social costs associated with various forms of energy sources required to fuel transportation vehicles. Use the forum to discuss topics as you would in a "live" classroom. The idea is to learn from each other based on reflecting on reading and providing insights. Be sure to cite all assertions.

CO5: Describe the economic impact of green logistics on the industry Video Tim Van Blaricom, & Kyle Justice (Producers), & Tim, V. B. and Justice, K. (Directors). (2014). Green Vehicles. [Video/DVD] Film Ideas.

Paper For Above instruction

The transportation industry is profoundly influenced by a complex array of economic factors, both private and external, which shape decision-making processes regarding transportation options. These factors include operational costs, fuel prices, regulatory policies, technological advancements, and societal expectations. Each element impacts how companies evaluate their logistics strategies, especially in the context of growing environmental concerns and sustainability initiatives.

Privately, companies are primarily concerned with the costs associated with transportation — this encompasses fuel expenses, vehicle maintenance, labor, and infrastructure investments. Fluctuations in fuel prices, influenced by geopolitical events or market dynamics, can significantly affect transportation budgets, prompting companies to explore alternative energy sources or more efficient routes (Lai & Wong, 2012). Additionally, technological innovations, such as electric vehicles or alternative fuels, present both opportunities and risks, motivating companies to adapt their fleets to reduce long-term expenses and comply with emerging regulations (Shaviv & Steinberg, 2006).

Externally, government policies and environmental regulations exert a critical influence on transportation decisions. Stringent emission standards, carbon pricing, and incentives for green transportation modes compel transportation companies to incorporate sustainability into their strategic planning. International agreements on climate change, such as the Paris Accord, further incentivize industries to reduce greenhouse gas emissions (Rogelj et al., 2016). These external pressures encourage investments in renewable energy sources like biofuels, electricity, and hydrogen, despite their current social and economic costs.

Social costs associated with various energy sources are an essential component of this discussion. Traditional fossil fuels, such as gasoline and diesel, are linked with significant pollution, greenhouse gas emissions, and health problems, which impose external social costs. These include increased healthcare costs due to pollution-related illnesses and environmental degradation affecting communities and ecosystems (Stern, 2006). Conversely, cleaner energy sources like electricity derived from renewable sources may reduce these social costs but entail higher initial investments, infrastructure development, and energy storage challenges (IEA, 2021).

The environmental implications of fuel choices extend beyond immediate costs. Utilizing renewable energy in transportation can promote long-term sustainability, energy security, and reduced dependency on finite resources. However, the transition raises questions about social costs related to the extraction and processing of raw materials needed for batteries and renewable energy infrastructure, such as lithium or rare earth elements (Dunn et al., 2015). Balancing these costs with environmental benefits is critical for informed decision-making.

Furthermore, the rise of green logistics, which emphasizes eco-efficient transportation practices, has notable economic impacts on the transportation industry. These include potential cost savings through fuel efficiency, reduced carbon taxes, and enhanced brand image, which can attract environmentally conscious consumers (McKinnon et al., 2020). The shift towards sustainable transportation modes, including electric and hydrogen vehicles, reflects a broader societal push for environmental responsibility while also presenting economic opportunities and challenges.

In conclusion, economic factors—both private and external—play a decisive role in shaping transportation decisions in today's industry. Companies must navigate a landscape of fluctuating fuel prices, technological innovations, regulatory policies, and societal expectations. Transitioning to greener energy sources, despite social costs, offers a pathway toward sustainability, reduced environmental impact, and future economic resilience. Careful assessment of these factors is vital for developing effective, sustainable transportation strategies that align with ecological and economic goals.

References

• Dunn, J. B., Gaines, L., Sullivan, J., & Obrovac, M. N. (2015). The significance of Li-ion batteries in the context of transportation. Energy & Environmental Science, 8(1), 5-12.
• International Energy Agency (IEA). (2021). Global EV Outlook 2021. IEA Publications.
• Lai, K.-H., & Wong, C.-W. (2012). The impact of fuel prices on logistics service providers’ decisions. Transportation Research Part E: Logistics and Transportation Review, 48(6), 125-135.
• McKinnon, A., Browne, M., Whiteing, A., & Piecyk, M. (2020). Green logistics. Kogan Page Publishers.
• Rogelj, J., et al. (2016). Paris Agreement climate proposals need a boost to keep warming well below 2°C. Nature, 534(7609), 631–639.
• Shaviv, E., & Steinberg, D. (2006). Time-to-build in a competitive industry: Green logistics and strategic investment. Transport Policy, 13(3), 192–204.
• Stern, N. (2006). Stern Review on the Economics of Climate Change. HM Treasury.