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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.

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    Picture this: you’re tired of the spam in your inbox, so you download a new app for your browser that blocks it. While downloading, the Terms of Agreement pop up, and you click ‘Agree’ – because why wouldn’t you? Unbeknownst to you, while you are now enjoying your spam-free email, the Slice Technologies app is analyzing your emails for purchase receipts and selling this anonymized data to hedge funds.[1] Is that an invasion of privacy? Not quite, as you agreed to the terms. But why would hedge funds, and other investment advisers, want this information? Well, with this kind of alternative data, investment firms can make much more accurate predictions about a company’s sales revenue and its health. This new world of alternative data poses incredible alpha-creating potential for investment advisers, as well as new legal concerns for the courts and regulators.

  • Whats App uses encryption technology July 31

    American law enforcement agencies are advocating that technology companies be forced to compromise the encryption used in their products, to facilitate ongoing investigations.[1] Encryption is the computational tool used to protect every American’s digital communications and data from eavesdropping and tampering, and it plays a vital role in our economy and national security. A misguided attempt to weaken encryption would only damage our national interests, both with respect to economic wellbeing and business security. Hackers and foreign nations will target the introduced weaknesses, domestic firms’ ability to build and export security innovations will decrease, and the American competitive advantage in the technology sector will be lessened.

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  • Image: Consumer product diagram showing which parent companies control everyday items. Source: Visual Capitalist July 23
    In towns and cities across America, mom and pop shops seem to be closing down at a rampant rate. It is no secret that as America moves further into the 21st century, consolidation is placing more power in the hands of fewer companies. With billion dollar companies becoming the norm and giants like Target and Walmart seemingly on every corner, it becomes hard to understand the dynamics of today’s complex economy. There is a strong argument against big businesses; it is bad for the average consumer and allowing companies to grow only allows them more ability to exercise their advantage and prey on consumers. On the other side, there is compelling theory that with healthy competition, big business expedites innovation and optimizes production in ways small companies cannot, which results in lower prices and a more efficient consumer experience. Within this environment, the regulation of big business is known as antitrust law and as the economy grows more complex, so does the enforcement of these laws in America.
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    Land-use regulation usually comes in the form of permits or codes, and is intended “to ensure [that] private use of land resources [is] aligned with policy standards.”[1] In other words, it is a way for the government to control how certain privately-owned areas are used. There are clear benefits associated with these permits and codes – for instance, they may help ensure the preservation of a particularly historic area of a town. That said, land regulation also triggers some economic collateral concerns that are often overlooked, such as lost business profits and a widening income gap.
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    The 2000 presidential election posed countless issues, including butterfly ballots, partially punched cards, four to six million lost votes, and outraged citizens across the political spectrum. These issues led California Institute of Technology president David Baltimore and Massachusetts Institute of Technology president Charles Vest to approach the election technology failure more scientifically. With a team of computer scientists, mechanical engineers, and political scientists, they reimagined—and reengineered—the election process.[1] Although Baltimore and Vest pioneered advancements in the election process, the reliability of voting infrastructure today still remains questionable. As we approach the upcoming election cycle this Fall, policy and technology experts must come together to rectify a failing system.

  • Image: Uber debuts testing of its self-driving fleet in Pittsburgh, Pennsylvania. Source: Automotive News July 6

    Despite a modest decline in private vehicle ownership in the last four years, many Americans still employ cars as their primary mode of transportation.[1] Comparisons among census trends in the past few decades indicate that private vehicles amassed popularity among American households following more extensive car-centric city planning beginning in the early 1960s.[2]

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    At the end of the last century, the digital revolution ushered in technological advancements that most consumers would not want to live without. Information and communication technology (ICT), such as computers, cell phones and the Internet, have proliferated worldwide entering our homes, offices and classrooms. [1] However, while the expansion of this technology has been impressive, it has not been even. At both the national and global levels, access to ICT is still far from universal and its disparity reflects and exacerbates the inequalities that exist offline. According to the International Telecommunications Union, the Internet user gender gap was as high as 31% in some developing countries and 12% globally in 2016. [2] As ICT becomes increasingly important, those left behind face growing socioeconomic barriers. This is what is known as the digital divide. People unfamiliar or unable to access ICTs are disadvantaged when trying to enter higher paid jobs, join solidarity networks, utilize educational information and accrue cultural capital.

  • (Image: Consumer Financial Protection Bureau logo as seen at a field hearing on mandatory arbitration clauses in Denver, C... June 25

    Kaylee Heffelfinger of Arizona and Shahriar Jabbari of California had sued Wells Fargo for opening seven unauthorized bank accounts in their names, but their lawsuits were dismissed due to analogous mandatory arbitration clauses. Their cases were part of a larger scandal in which Wells Fargo opened at least 3.5 million unauthorized accounts on behalf of their customers but then astonishingly held those customers to the mandatory arbitration clauses they had signed for their legitimate accounts. Given the harm that mandatory arbitration may cause consumers, it is critical for policymakers to consider the implications of mandatory arbitration.

  • Fairchild Airforce Base Gay Pride Month May 23

    In June of 2016, former Defense Secretary Ashton B. Carter removed one of the final barriers to military service by announcing new rules that would allow transgender individuals to openly serve in the military.[1] Prior to this, transgender people would have been discharged or otherwise separated from the military just for their gender under Department of Defense Instruction (DODI) 6130.03: Medical Standards for Appointment, Enlistment, or Induction in the Military Services.[2] Just one year later, in July 2017, President Donald Trump tweeted that the U.S. “will not accept or allow transgender individuals to serve in any capacity in the U.S. military” because the military “must be focused on decisive and overwhelming victory and cannot be burdened with the tremendous medical costs and disruption that transgenders in the military would entail”.[3]

PENN WHARTON PPI
RESOURCE SPOTLIGHT:

  • <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>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>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>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>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>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>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>
  • <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>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>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>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>