GB590 Unit 7 Sustainability Trade-Off Paper Example

Tons Avoided or Aisles Opened: A Unit 7 Sustainability Trade-Off Paper on Supermarket Refrigerants

[Student Name]

Purdue University Global

GB590: Ethics in Business and Society

Unit 7 Sustainability Trade-Off Paper

[Instructor Name]

[Date]

The chain, its stores and every figure are composite and illustrative; the refrigerant properties, regulations, studies and sources cited are real.

The Figures

The chain's 38 stores run centralized rack refrigeration systems that use R-404A, a hydrofluorocarbon rated near 3,900 on the global warming potential scale, so one kilogram released traps roughly as much heat over a century as 3,900 kilograms of carbon dioxide. Each store holds about 1,600 kilograms of refrigerant, and the chain's service records show an average annual leak rate of about 22 percent, in line with the leak rates the Environmental Protection Agency reports for supermarkets in its GreenChill partnership (U.S. Environmental Protection Agency, n.d.).

Converted to carbon dioxide equivalent, the leaks amount to about 1,370 tons per store a year, or roughly 52,000 tons across the chain. The chain's 40 delivery trucks emit about 6,800 tons a year, and its stores' electricity about 38,000 tons. Refrigerant leaks are therefore the chain's largest climate impact, larger than the fleet and electricity together on some measures, and the least visible to customers.

The Regulatory Floor

Using authority Congress granted in 2020, the EPA is phasing down production of hydrofluorocarbons and has limited the use of high-warming refrigerants in new supermarket systems. Existing systems may keep operating, but the agency has extended leak-repair requirements to them. The rules set a floor: the chain must repair leaks and cannot install new R-404A racks, but it is not required to replace its existing systems on any timetable.

The Trade-Off

The chain's five-year capital plan has about $19 million available for discretionary projects beyond routine maintenance. Two uses compete for it. Replacing all 38 rack systems with transcritical carbon dioxide systems, which use a refrigerant with a global warming potential of 1, would cost about $500,000 per store, roughly $19 million in total. Building two new stores, each planned for a neighborhood without a full-service grocery store within a mile, would cost about $9.5 million each.

The Climate Case at Full Strength

Retrofitting every store would eliminate nearly all of the 52,000 tons of annual refrigerant emissions, about 60 percent of the chain's total climate impact, within five years. No other project available to the chain comes close. Each year of delay adds another 52,000 tons that cannot be recovered, and the harm falls on people everywhere, including future generations who have no voice in the chain's decisions. If the chain takes its climate commitments seriously, refrigerants are where it must act.

The Food Access Case at Full Strength

The two neighborhoods together have about 41,000 residents, many without cars, who now shop at convenience stores and dollar stores with limited fresh produce. A full-service store would shorten their trips, lower prices for staples and bring about 160 jobs. The benefits fall on identifiable people now, not on a global total in the future. Allcott et al. (2019) found that opening supermarkets in underserved areas changed residents' diets only modestly, because preferences and incomes matter more than distance. That finding weakens the health argument but not the access argument: residents still gain shorter trips, lower prices and jobs, even if their diets change slowly.

The climate case counts tons that harm everyone a little; the access case counts residents who are harmed a lot.

Who Decides, and Who Is Counted

A further difficulty is that the two goods are counted by different people. The climate benefit appears in the chain's sustainability report, read by investors and a few large customers, and it is measured in tons that no shopper sees. The access benefit appears in a neighborhood that has asked the chain for a store for years, and it is felt by residents who will judge the chain by whether it comes. A board that weighs only what its loudest audience asks for will choose whichever good that audience prefers. The paper therefore states both benefits in their own units and refuses to convert residents into tons or tons into dollars, because any single conversion rate would quietly decide the question.

There is also a timing difference. Refrigerant already released cannot be recovered, so every year of delay is a permanent loss on the climate side. A store delayed by two years, by contrast, still serves its neighborhood for decades once it opens, though residents bear two more years without one. That asymmetry favors acting on emissions early, which the sequence below does through its first-year leak program.

Three Options on Two Measures

Retrofit first, stores later. Retrofit all 38 stores over five years and defer both stores. Tons avoided over five years: about 156,000, since emissions fall gradually as stores are converted. Residents served: none within the plan.

Stores first, retrofit later. Build both stores in years 1 and 2 and defer retrofits. Tons avoided over five years: essentially none. Residents served: about 41,000 from year 2.

A sequence. Spend about $1.6 million in year 1 on leak detection, faster repairs and reduced refrigerant charge across all stores, which the chain's engineers estimate would cut the leak rate from 22 percent to about 15 percent once fully in place, about halfway through year 1. Build the first new store in year 1. Retrofit the twelve stores with the highest leak rates in years 2 to 4, and build the second store in year 4. Tons avoided over five years: about 115,000. Residents served: about 22,000 from year 2 and all 41,000 from year 4.

A Sequence, Not a Split

The sequence achieves nearly three-quarters of the climate benefit of retrofitting first while serving every resident by year 4. It works because the cheapest emissions reductions, leak detection and repair, come first and cost little, and because retrofits can be targeted at the leakiest stores, where each dollar avoids the most tons. The remaining 26 stores would be retrofitted in the next capital plan, and the leak program would keep their emissions about a third lower in the meantime.

Hawken (1993) argued that businesses should design their operations so that what is good for the environment and what is good for people do not have to be traded against each other. The chain cannot fully escape the trade-off, since its capital is limited, but it can order its choices so that neither good is sacrificed entirely. The sequence asks the chain to accept slower retrofits and slower store openings in exchange for making progress on both.

References

Allcott, H., Diamond, R., Dubé, J.-P., Handbury, J., Rahkovsky, I., & Schnell, M. (2019). Food deserts and the causes of nutritional inequality. The Quarterly Journal of Economics, 134(4), 1793-1844. https://doi.org/10.1093/qje/qjz015

Hawken, P. (1993). The ecology of commerce: A declaration of sustainability. HarperBusiness.

U.S. Environmental Protection Agency. (n.d.). GreenChill advanced refrigeration partnership. https://www.epa.gov/greenchill