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What is the Role of the Private Sector on Addressing Climate Change?

October 02, 2017
The private sector has a huge role in addressing climate change and other environmental issues. This was on full display during and after President Trump’s announcement to withdraw the U.S. from the Paris Climate Agreement. Silicon Valley’s Elon Musk gathered huge criticism for his advisory role to the President, but, in a belief that he could do more good from the inside, he pushed for the Trump administration to stay committed to the Paris framework. Apple’s CEO Tim Cook also spoke with the President to persuade him to stay, however, the President chose to follow through with his campaign promises.

By Rachel Huang

With the current Paris framework, nations establish targets for reducing their carbon emissions but are not legally bound to hitting them. These commitments are voluntary in good faith, and symbolic at most for the U.S., since the U.S. Senate never confirmed a 2/3’s vote on the Paris Climate Agreement as a treaty recognized by the Constitution. [1] Therefore, some could say that the withdrawal isn’t as severe because there are no legal consequences. However, all but Nicaragua and Syria, a total of 195 nations, signed the agreement, and will continue to uphold their commitments without U.S. leadership. What U.S. withdrawal means to the international community, time will tell, as some countries will champion the cause and others will potentially slack, seeing as the U.S. has stepped back as well.

Most were hopeful that the light shed on climate issues and the Paris Agreement will now provoke local communities and the private sector to take more charge. With a lack of leadership from Washington, the public looked to cities, states, and businesses. Just as well, a coalition called “We Are Still In” was formed as a response to the Trump administration’s withdrawal. Their webpage featured an “open letter to the international community and parties to the Paris Agreement from U.S. state, local, and business leaders.” [2] The list, spanning across diverse facets of the American economy, includes higher educational institutions, eBay, Airbnb, Lyft, Microsoft, Facebook, Target, Tiffany & Co. and many other fortune 500 and local businesses. [3]

Whether it speaks to their bottom line or their values as a company, many in the private sector are on the climate issue. Dubbed as a ‘direct threat to national security’ by a GOP-led defense bill, the private sector, too, sees the potential risk of global warming to their assets, investments, and customers. [4] Large companies say that they’re a prominent force in addressing and implementing climate issues and solutions through financial assistance and investments, technological advancements, and partnerships. Tech companies and their executives realize the ominous situation of climate change, like Bill Gates of Microsoft who said, “We need a massive amount of research into thousands of new ideas – even ones that might sound a little crazy – if we want to get to zero emissions by the end of the century.” [5] He has since launched the Breakthrough Coalition with 27 of the world’s richest to invest billions of dollars into researching new energy technology. [6]  These billionaires, including CEOs from Amazon, Alibaba, Facebook, and Hewlett Packard, all believe that their investments into several different areas, transportation, agriculture, electricity generation, will find a key to reaching zero emissions. Likewise, companies like Apple have transitioned 93% of its facilities to renewable energy and have its sight set on 100% renewable energy. [7] Apple invested $850 million into a solar energy farm to power their California stores, offices, HQ, and data center. Google has also set goals to buy enough clean energy to meet “its global needs this year.” [8] Investments like these not only cut down on fossil fuels and avoid impacting the environment, they also save these large companies money. In 2016, the 190 companies that reported on their targets saved $3.7 billion in that year alone. Other companies, such as Musk’s Telsa Motors, build innovation and sustainability into their brand through products like batteries and electric vehicles. Most top companies see sustainability and climate issues as a key driver of innovation.

Image: Greenhouse gas emissions (positive) and sinks (negative), by source, in the United States from 1990 to 2014.  Source: Climate Change Indicators in the United States, 2016

Image: Greenhouse gas emissions (positive) and sinks (negative), by source, in the United States from 1990 to 2014.

Source: Climate Change Indicators in the United States, 2016

Consumers expect that companies’ actions and their products are morally and ethically right for the environment and human health, or that the government will hold these companies accountable when something goes wrong. Despite public assumption, a company’s bottom line still matters and Volkswagen’s ‘diesel dupe’ was a prime example of how companies can play into ‘greenwashing’ and environmentally-friendly identities but not actually accomplish it. Dating back to 2015, the EPA found that VW’s diesel cars had a “defeat” software that knew when it was being tested and changed its performance to meet emission standards. [9] The diesel cars were heavily marketed as low emissions to consumers and led them to believe that this was an eco-friendlier diesel car. With the “defeat device,” VW could cheat and improve the results of test. As a result, when actually driven on the road and out of test mode, the engines emitted nitrogen oxide pollutants up to 40 times over U.S. regulations. [10] As of January 2017, VW agreed to pay $2.8 billion in criminal penalties and $1.5 billion to cover EPA’s claim for civil penalties. [11] In overall history, ExxonMobil, BP, and Chevron have also been big emitters of pollution. [12] And likewise, though those CEOs have been pushing for a more environmentally-friendly image, there are still lobbyists for the oil and gas industry pushing their agenda in Washington.    

While some large companies make strides to provide innovative solutions to the world’s problems and make climate issues a current issue, others finagle their way around it and ‘greenwash’ their image to gather public acceptance and follow trends. This is where government comes in and regulates industries and actions of companies. And despite the turmoil in D.C., states and cities have more governance over U.S. energy policy and have committed to staying on track with the Paris framework. The best way to prosper with these climate issues is if the private sector shapes their actions towards a better future and policymakers, to the best of their extent, create opportunities that allow these companies to do the right thing.

Student Blog Disclaimer
  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

References

  [1] Fein, B. (2017, June 05). Paris Climate Accord was no treaty. Retrieved August, from http://www.washingtontimes.com/news/2017/jun/5/paris-climate-accord-was-no-treaty/

  [2]   [3] We Are Still In. (n.d.). Retrieved August, from http://wearestillin.com/

  [4] Price, Greg. “GOP-Led House Passed a Bill That Calls Climate Change a ‘National Security Threat.’” Newsweek, 14 July 2017, www.newsweek.com/climate-change-national-security-republicans-637174.

  [5]   [6]   [7] “What Five Tech Companies Are Doing About Climate Change.” State of the Planet What Five Tech Companies Are Doing About Climate Change Comments, blogs.ei.columbia.edu/2016/03/04/what-five-tech-companies-are-doing-about-climate-change/

  [8] Toor, Amar. “Apple, Google, Microsoft, and Amazon Will Continue to Fight Climate Change despite Trump’s Order.” The Verge, The Verge, 31 Mar. 2017, www.theverge.com/2017/3/31/15135066/apple-google-microsoft-amazon-climate-change-trump-obama.

  [9]   [10] Hotten, Russell. “Volkswagen: The Scandal Explained.” BBC News, BBC, 10 Dec. 2015, www.bbc.com/news/business-34324772.

  [11] “Learn About Volkswagen Violations.” EPA, Environmental Protection Agency, 11 Aug. 2017, www.epa.gov/vw/learn-about-volkswagen-violations.

  [12] Starr, Douglas, et al. “Just 90 Companies Are to Blame for Most Climate Change, This ‘Carbon Accountant’ Says.” Science | AAAS, 26 July 2017, www.sciencemag.org/news/2016/08/just-90-companies-are-blame-most-climate-change-carbon-accountant-says.

  • (Image: The Fukushima Daiichi nuclear disaster of 2011. Source:  NYTimes) February 1

    Nuclear energy has the potential to assist nations in tackling climate change and sustain a rapidly growing world population. In the first part of this series on nuclear energy, I analyzed why nuclear energy is superior to other energy sources in achieving this end but also why current market forces prevent its growth. However, even if US legislators decided to pass legislation that aggressively expanded the country’s nuclear infrastructure, there are three primary non-market challenges with current U.S. policy, or lack thereof: a hostile public, the absence of a centralized nuclear waste disposal site, and concerns with proliferation and the imperilment of U.S. national security objectives. In order to responsibly expand nuclear energy capacities and prevent proliferation to hostile states, policy-makers have an obligation to address these issues. Not doing so may bear worse consequences than wantonly enlarging the United States’ atomic sector.

  • (Image: U.S. one dollar bill. Source: NeONBRAND on Unsplash) January 30
    In 2015, Seattle legislators signed a bill to gradually increase the city’s minimum wage to $15 an hour over several years. Businesses with fewer than 500 employees will still have until January of 2024 to deal with the full ramifications of the act. However, businesses that do not provide medical benefits and employ over 500 people were forced to pay their workers $15 dollars an hour starting this past January [1]. Since then, two major studies have been published on the effects of the act, one concluding that it has had a positive effect on economic activity and employment and the other stating that it has made the labor market far too rigid.
  • (Image: A hallway of jail cells. Source: Penn Criminology) January 25
    Today private prisons house about 126,000 federal and state inmates [1]. Orders issued under the Obama Administration to phase out the use of private prisons are now being reversed under the Trump Administration, which has caused some debates over the efficacy of private prisons to resurface. Chiefly, this reversal has sparked controversy over the economic benefits of private prisons in America, as the most avid dissidents highlight problems with the economic argument for private prisons and even moderate objectors point to inconclusive data as a poor indicator of their advantages.
  • “Tech giants” or even the “Frightful Five,” the collective names given to Amazon, Apple, Facebook, Microsoft, ... December 15
    From checking the weather to reading the news, from interacting on social media to shopping for gifts, it is evident that technology plays an integral role in our daily lives. We can attribute the products that we use every day with just a few prominent technology companies. “Tech giants” or even the “Frightful Five,” the collective names given to Amazon, Apple, Facebook, Microsoft, and Google (and by extension, its parent company Alphabet) underscore the idea that these technology companies significantly influence both our daily routines and the political and economic changes in our nation at large [1].
  • (Image: Winnie Palmer Hospital in Orlando, FL (NOT AN ACO). Source: Wikimedia) December 13

    Healthcare spending accounts for just under one-fifth of the US economy, amounting to an enormous $3.4 trillion in 2016 [1]. Politicians from both sides of the aisle have tried their hand at passing cost containment measures to slow its growth, which has consistently outpaced GDP growth rates. With the passage of the Affordable Care Act in 2010, the Center for Medicare and Medicaid Services (CMS) attempted to cut costs by reshaping the way providers are paid to manage care. As a result, it began to recognize and reward a new hybrid structuring of providers: Accountable Care Organizations (ACOs). As ACOs become more popular under new payment schemes, it is essential to track their ability to reduce costs and improve quality. The Trump administration’s policy changes stand to shape not only providers’ care coordination, but also the trajectory of the healthcare industry.

  • Hurricane Maria has brought light to how disaster relief has impacted Puerto Rico. December 5

    Since Hurricane Maria struck Puerto Rico, the island’s leaders have been asking the federal government for more emergency aid and long-term recovery funds.[1] Resident Commissioner for Puerto Rico Jenniffer Gonzalez-Colon requested, “Congress [approve] an aid package that is commensurate with the level of devastation,” while Congresswoman Madeleine Bordallo of Guam said she will, “Seek a firm commitment that the House provide fair and robust emergency assistance to U.S. territories devastated by natural disasters in any bills considered for the remainder of the Congress.” [2] The federal government must determine how much assistance is required to adequately respond to a natural disaster of this scale and how to balance the need for short-term relief and long-term recovery.

  • (Image: Soda bottles on the shelf. Source: Flickr) December 5

    Sugar sweetened beverage taxes, commonly referred to as soda taxes, have been on the rise in American municipal governments as a potential policy solution to both a public health crisis and a revenue shortage [1]. However, in cities like Philadelphia where these sugary beverage taxes have been implemented, they have become a target for the scrutiny of residents and economists alike. Governments that have implemented soda taxes commonly cite how the tax revenue and the tax itself could help tackle obesity, but this claim is still subject to debate.

  • (Image: President Obama & King Salman of Saudi Arabia (Sept. 2015). Source: Public Domain TV) November 30

    Since 1976, private citizens have been barred from introducing private lawsuits against foreign nations under the Foreign Sovereign Immunities Act (FSIA). This law has been the basis for United States’ domestic legal engagement with other countries for decades, and has undergone significant revisions since its inception. Actions taken by the legislative branch over the past few decades have drastically changed the original FSIA and introduced new challenges regarding implementation and potential ramifications against the United States in legal systems abroad. This article explores how a recent amendment to the FSIA known as the Justice Against Sponsors of Terror Act (JASTA), as well as prior revisions, represent a significant reduction in the sovereign immunity laid out in FSIA, as well as a public policy and diplomatic challenge for the United States moving forward.

  • (Image: Narendra Modi. Source: Aadhar News) November 30

    First proposed in 2009, India’s Aadhaar biometric ID system represents a complete overhaul of India’s approach to identification. The Aadhaar ID links your fingerprint and iris to everything from tax filings to bank accounts. Despite criticism relating to privacy concerns, proponents argue that Aadhaar has the potential to propel the Indian economy towards business transparency and fraud reduction.

  • (Image: Cannabis Cash, Source: North Bay Business Journal) November 20

    Over the span of recent decades, the federal legalization of marijuana has been a popular topic of discussion within the political arena. One aspect less frequently introduced is the financial impact legalization has within the banking sector. At the moment, most cannabis companies are unable to take out federal loans or establish any form of credit, since marijuana is federally illegal and therefore federally regulated banks are unable to work directly with marijuana businesses. A few states have legalized the use and distribution, of cannabis, both recreationally and medicinally, but this legal standing is insufficient for distributors to access services provided by national banks. All of this has led to volatility within the marijuana business structure and a business model built in violation of banking standards.

PENN WHARTON PPI
RESOURCE SPOTLIGHT:

  • <h3>The World Bank Data (U.S.)</h3><p><img width="130" height="118" alt="" src="/live/image/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg" class="lw_image lw_image484 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 2x, /live/image/scale/3x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 3x" data-max-w="1406" data-max-h="1275"/>The <strong>World Bank</strong> provides World Development Indicators, Surveys, and data on Finances and Climate Change.</p><p> Quick link: <a href="http://data.worldbank.org/country/united-states" target="_blank">http://data.worldbank.org/country/united-states</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Reserve Economic Data (FRED®)</h3><p><strong><img width="180" height="79" alt="" src="/live/image/gid/4/width/180/height/79/481_fred-logo.rev.1407788243.jpg" class="lw_image lw_image481 lw_align_right" data-max-w="222" data-max-h="97"/>An online database consisting of more than 72,000 economic data time series from 54 national, international, public, and private sources.</strong> FRED®, created and maintained by Research Department at the Federal Reserve Bank of St. Louis, goes far beyond simply providing data: It combines data with a powerful mix of tools that help the user understand, interact with, display, and disseminate the data.</p><p> Quick link to data page: <a href="http://research.stlouisfed.org/fred2/tags/series" target="_blank">http://research.stlouisfed.org/fred2/tags/series</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>HUD State of the Cities Data Systems</h3><p><strong><img width="200" height="200" alt="" src="/live/image/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg" class="lw_image lw_image482 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 3x" data-max-w="612" data-max-h="613"/>The SOCDS provides data for individual Metropolitan Areas, Central Cities, and Suburbs.</strong> It is a portal for non-national data made available through a number of outside institutions (e.g. Census, BLS, FBI and others).</p><p> Quick link: <a href="http://www.huduser.org/portal/datasets/socds.html" target="_blank">http://www.huduser.org/portal/datasets/socds.html</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>USDA Nutrition Assistance Data</h3><p><img width="180" height="124" alt="" src="/live/image/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg" class="lw_image lw_image485 lw_align_right" srcset="/live/image/scale/2x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 2x, /live/image/scale/3x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 3x" data-max-w="1233" data-max-h="850"/>Data and research regarding the following <strong>USDA Nutrition Assistance</strong> programs are available through this site:</p><ul><li>Supplemental Nutrition Assistance Program (SNAP) </li><li>Food Distribution Programs </li><li>School Meals </li><li>Women, Infants and Children </li></ul><p> Quick link: <a href="http://www.fns.usda.gov/data-and-statistics" target="_blank">http://www.fns.usda.gov/data-and-statistics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>NOAA National Climatic Data Center</h3><p><img width="200" height="198" alt="" src="/live/image/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg" class="lw_image lw_image483 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 3x" data-max-w="954" data-max-h="945"/>NOAA’s National Climatic Data Center (NCDC) is responsible for preserving, monitoring, assessing, and providing public access to the Nation’s treasure of <strong>climate and historical weather data and information</strong>.</p><p> Quick link to home page: <a href="http://www.ncdc.noaa.gov/" target="_blank">http://www.ncdc.noaa.gov/</a></p><p> Quick link to NCDC’s climate and weather datasets, products, and various web pages and resources: <a href="http://www.ncdc.noaa.gov/data-access/quick-links" target="_blank">http://www.ncdc.noaa.gov/data-access/quick-links</a></p><p> Quick link to Text & Map Search: <a href="http://www.ncdc.noaa.gov/cdo-web/" target="_blank">http://www.ncdc.noaa.gov/cdo-web/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Congressional Budget Office</h3><p><img width="180" height="180" alt="" src="/live/image/gid/4/width/180/height/180/380_cbo-logo.rev.1406822035.jpg" class="lw_image lw_image380 lw_align_right" data-max-w="180" data-max-h="180"/>Since its founding in 1974, the Congressional Budget Office (CBO) has produced independent analyses of budgetary and economic issues to support the Congressional budget process.</p><p> The agency is strictly nonpartisan and conducts objective, impartial analysis, which is evident in each of the dozens of reports and hundreds of cost estimates that its economists and policy analysts produce each year. CBO does not make policy recommendations, and each report and cost estimate discloses the agency’s assumptions and methodologies. <strong>CBO provides budgetary and economic information in a variety of ways and at various points in the legislative process.</strong> Products include baseline budget projections and economic forecasts, analysis of the President’s budget, cost estimates, analysis of federal mandates, working papers, and more.</p><p> Quick link to Products page: <a href="http://www.cbo.gov/about/our-products" target="_blank">http://www.cbo.gov/about/our-products</a></p><p> Quick link to Topics: <a href="http://www.cbo.gov/topics" target="_blank">http://www.cbo.gov/topics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Bureau of Economic Research (Public Use Data Archive)</h3><p><img width="180" height="43" alt="" src="/live/image/gid/4/width/180/height/43/478_nber.rev.1407530465.jpg" class="lw_image lw_image478 lw_align_right" data-max-w="329" data-max-h="79"/>Founded in 1920, the <strong>National Bureau of Economic Research</strong> is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.</p><p> Quick Link to <strong>Public Use Data Archive</strong>: <a href="http://www.nber.org/data/" target="_blank">http://www.nber.org/data/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>MapStats</h3><p> A feature of FedStats, MapStats allows users to search for <strong>state, county, city, congressional district, or Federal judicial district data</strong> (demographic, economic, and geographic).</p><p> Quick link: <a href="http://www.fedstats.gov/mapstats/" target="_blank">http://www.fedstats.gov/mapstats/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Center for Education Statistics</h3><p><strong><img width="400" height="80" alt="" src="/live/image/gid/4/width/400/height/80/479_nces.rev.1407787656.jpg" class="lw_image lw_image479 lw_align_right" data-max-w="400" data-max-h="80"/>The National Center for Education Statistics (NCES) is the primary federal entity for collecting and analyzing data related to education in the U.S. and other nations.</strong> NCES is located within the U.S. Department of Education and the Institute of Education Sciences. NCES has an extensive Statistical Standards Program that consults and advises on methodological and statistical aspects involved in the design, collection, and analysis of data collections in the Center. To learn more about the NCES, <a href="http://nces.ed.gov/about/" target="_blank">click here</a>.</p><p> Quick link to NCES Data Tools: <a href="http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4" target="_blank">http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4</a></p><p> Quick link to Quick Tables and Figures: <a href="http://nces.ed.gov/quicktables/" target="_blank">http://nces.ed.gov/quicktables/</a></p><p> Quick link to NCES Fast Facts (Note: The primary purpose of the Fast Facts website is to provide users with concise information on a range of educational issues, from early childhood to adult learning.): <a href="http://nces.ed.gov/fastfacts/" target="_blank">http://nces.ed.gov/fastfacts/#</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The Penn World Table</h3><p> The Penn World Table provides purchasing power parity and national income accounts converted to international prices for 189 countries/territories for some or all of the years 1950-2010.</p><p><a href="https://pwt.sas.upenn.edu/php_site/pwt71/pwt71_form.php" target="_blank">Quick link.</a> </p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Aviation Administration: Accident & Incident Data</h3><p><img width="100" height="100" alt="" src="/live/image/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg" class="lw_image lw_image80 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 2x, /live/image/scale/3x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 3x" data-max-w="550" data-max-h="550"/>The NTSB issues an accident report following each investigation. These reports are available online for reports issued since 1996, with older reports coming online soon. The reports listing is sortable by the event date, report date, city, and state.</p><p> Quick link: <a href="http://www.faa.gov/data_research/accident_incident/" target="_blank">http://www.faa.gov/data_research/accident_incident/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Internal Revenue Service: Tax Statistics</h3><p><img width="155" height="200" alt="" src="/live/image/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg" class="lw_image lw_image486 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg 2x" data-max-w="463" data-max-h="596"/>Find statistics on business tax, individual tax, charitable and exempt organizations, IRS operations and budget, and income (SOI), as well as statistics by form, products, publications, papers, and other IRS data.</p><p> Quick link to <strong>Tax Statistics, where you will find a wide range of tables, articles, and data</strong> that describe and measure elements of the U.S. tax system: <a href="http://www.irs.gov/uac/Tax-Stats-2" target="_blank">http://www.irs.gov/uac/Tax-Stats-2</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>