l sense of the word "value," we can conclude that both organizations call people's attention to environmental issues, lobby business to change policies, and influence governments to put laws in place to improve environmental conditions.
However, looking at value from an economic point of view, we need to shift to the idea of comparing willingness-to-pay (WTP) to cost. In class, we work through a hypothetical example by asking students, How much are each one of you willing to contribute each year to protect the earth against degradation? While figures range, students are asked to imagine that every human being puts $1 toward the protection of the earth, which equates to approximately $6 billion per year. On top of that we hypothesize the WTP of major corporations. If we take the top 5,000 global corporations, we could ask how much each would be willing to pay. It would take $200,000 per company to come up with another $1 billion. For the sake of class discussion, we can say that governments will contribute another $1 billion to bring the total up to $8 billion.
Now, we can move to the cost side. If we take the expenses of the campaigns of WWF and Greenpeace in their last fiscal years, the total would come to about $677 million. Therefore, there is a very large hypothetical wedge between WTP and cost of about $7.2 billion. The point is not to argue on an exact figure for WTP, but rather to highlight that even though neither organization has a profit objective, both still strive to drive a wedge between WTP and cost.
Q: Do the organizations themselves capture any value?
A: In a purely economic sense, no, WWF and Greenpeace do not capture any value for themselves except maybe goodwill and credibility, which then leads back into their ability to fundraise. Nearly all of the value that is captured is for the public good. Here, we have the problem of free-riding, whereby people are able to enjoy the public good such as cleaner air and uncontaminated water without doing anything themselves.
From this, we can conclude that WWF and Greenpeace create value by increasing the world's WTP on environmental issues. It still leaves us with the original question of whether they are effective. How can we possibly measure their effectiveness? Some pundits point out that the earth should be in 'better shape' than when WWF and Greenpeace started in 1961 and 1971, respectively. In defense of environmental NGOs, most scientists agree that the earth is deteriorating at a faster rate than during the 1960s and 1970s, but it would be worse off had it not been for their tireless campaigning.
Q: Both cases look at these organizations as they attempt to influence the G8 meetings held in June 2007. Were they effective?
A: As we're entering into geopolitical territory, it is hard to determine how effective both organizations were during the June 2007 G8 meetings. From a media perspective, WWF and Greenpeace as well as other NGOs were mentioned repeatedly. Part of this was aided by the extensive media coverage of Greenpeace protesters entering into the restricted area in a speedboat. Aside from the media bravo, the organizations played an important role in providing an external opinion as to whether the climate change talks were substantive.
Upon conclusion of the G8 meetings, both organizations summarized the outcomes in slightly different manners. WWF's press release stated that the G8 leaders took important steps to reduce emissions in the longterm, even though no specific measures or time horizons were provided. Greenpeace called the meetings an outright failure given that no clear targets were set for emissions reductions.
Q: Do WWF and Greenpeace collaborate?
A: Yes, both directly and indirectly. Indirectly, there is considerable overlap in both organizations' programs. The one exception is the nuclear disarmament and nuclear power issues, which are more prominent in Greenpeace campaigns. The organizations' programs are:
Directly, WWF and Greenpeace have collaborated throughout their histories. Most of the collaboration is working together to campa