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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: Tissue donation in the United States is in need of a transparent national policy. Source: Health Matters.) April 12
    It is estimated that one individual organ, eye, and tissue donor can save up to 75 lives [1]. Currently an average of 22 individuals die each day waiting to be matched for a transplant [2]. Donated tissues and organs both have lifesaving potential, but unlike donated organs, donated tissue is also purchased by biotechnology and cosmetic companies for research purposes. Most donors, however, are not aware of the differences between organ and tissue donation, including how it is removed, used, and regulated [3]. Even fewer are aware that by registering for organ donation, they have become tissue donors by default and that their tissues can be sold for up to $80,000 to profitable companies [4]. In order to increase transparency and not lose informed consent of donors, registration for tissue donation and organ donation in the United States should be separate processes.
  • Image: The digital divide. Source: MIT Tech Review.  April 10

    Google, Facebook, Twitter, Snap, Amazon, Microsoft, Apple — these companies have become household names, and the world today heavily relies on their services. To many, the benefits of cheap and easy connection to information are obvious, ranging from increased educational and career opportunities to an increased rate of technological innovation. However, as the pace of this progress accelerates, two distinct issues have remained concerning: the use of these technologies and access to them. The topic of this article mostly focuses on how people still lack access to the Internet. This lack of access to and of use of the Internet is known as the “digital divide.”

  • Uber's app interface. April 3

    Leo drives a mid-2000s Acura TSX and arrives at the pickup point in front of a train station in Trenton, New Jersey. I’m headed home from New York City for the Thanksgiving holiday. Leo gives me a hand with my suitcase, and in under a minute, we’re off, driving Interstate 276 West most of the way there. The 26.66 mile trip takes 45 minutes. It costs me $34.68 on one of the most popular rideshare platforms, of which Leo receives about $25, minus the cost of gas, tolls, and vehicle mileage. Leo is a pretty talkative guy, and the subject turns to the various driving platforms, like Uber and Lyft. Leo is a young guy, and he tells me he’s one of the approximately 1 in 4 drivers who does not have health insurance.

  • (Image: Farm scene with city of Philadelphia in the background. Source:  Yipa.org)  March 23
    Many young Americans leave home and never return. In particular, this trend can be seen in rural America. 1,350 counties “non-metro” counties have lost population since 2010.[1] Since the mid 1990s, rural population growth has been significantly lower than urban areas.[2] The movement of people has resulted in national economic growth, but there are consequences. Behind these numbers lie worrisome consequences.
  • (Image: Coffee cups floating in front of an image of the globe, alluding to the Boston Tea Party and Br... March 21
    Caffeine has been heralded as the world’s most popular drug. However, as more people want their coffees to go, the industry has failed to confront the waste from single-use cups. In the last two decades, the United Kingdom has seen a 400% increase in the number of coffee shops. The sheer volume of waste affects both the environment and the country’s waste management infrastructure [1][2]. In the UK alone, people throw away 2.5 billion disposable coffee cups a year [3]. The scope of this problem is magnified by the difficulty of recycling wax-lined paper (the most common material for coffee cups), with only 0.25% of these cups being reprocessed [4]. In order to combat the growing practical and environmental effects of throwing away single-use cups, UK lawmakers have stepped in, and are considering instituting a “latte levy,” a new tax to influence on-the-go coffee drinkers.
  • (Image: Pharmaceutical drug price hikes are now commonplace in American news. Source: Pixabay.) March 16
    Pharmaceutical drug price hikes have now become a common feature in American news. From Martin Shkreli’s infamous Daraprim price hike that saw a $737 increase to the chemotherapy drug Cosmogen that currently sells for $1,400 in the U.S. compared to $20-30 overseas, the problem is clearly systemic [1]. Many important cancer drugs, including Gilead’s Sovaldi, Merck’s Keytruda, and Vertex’ Kalydeco all cost over $80,000 for a course of treatment [2]. Often prices increase are unrelated to any new research and development done. There is a clear need to address such drastic drug price increases in order to prevent these dramatic hikes and create a more stable biopharmaceutical market.
  • (Image: Construction on the Tappan Zee Bridge in New York, the result of a public-private partnership, has generated over ... February 28

    The state of American infrastructure figures prominently in current national policy discussion, prompted by poor report cards, energized political campaigns, and recent executive initiatives. Severe underfunding of needed infrastructure projects has prompted proposals from both sides of the political aisle, with public-private partnerships (P3s) featuring prominently. This article evaluates and offers perspective on different types of P3s, examining their benefits and costs and the Trump administration’s plans.

  • (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.

PENN WHARTON PPI
RESOURCE SPOTLIGHT:

  • <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>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>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>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>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>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>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>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 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>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>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>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>