Cycling the Material Economy

By Scott Cassel

Nearly four decades ago, I roamed the Quad with piles of psych and English texts tucked beneath my arms, before leaving school for a “gap year” with my dog, Jackson, to jam the road with Kerouacic enlightenment. The Grand Canyon, Great Sand Dunes National Monument, and Big Sur posed questions to me I could not answer. Organic food gave me answers to questions I did not yet have.

I returned to Penn a year later and threw myself into the Geologic depths of canyons, streams, and tectonic plates to figure out WHY. And then I was faced with WHAT I could do to protect these great lands. What was MY personal responsibility to ensure the beauty would be there for me and others?

My Environmental Studies deepened. I was confronted with the Three Mile Island Nuclear Meltdown, acid rain in the White Mountains, uranium tailings on Native lands – all of which I was unequipped to stop. So I did what I could. I collected the neighborhood’s newspapers on my porch and shuttled them to trailer trucks at the now defunct Ecology Food Coop in Powelton Village; drove the Penn Recycling truck to gather newspapers from metal bins; and sold barrels of smashed glass containers to scrap dealers in West Philadelphia to fuel recycling parties and truck gas. I was saving a few resources if not saving the world. And I fit all the environmentalist stereotypes.

The American landscape fueled my passion; Penn academics kept me sober.

Back then, the Wharton Business School towered over me on Locust Walk like a shadow at dusk – mysterious, powerful, and foreboding. The drive for PROFIT drove me away. I did not know that the skills needed to run a non-profit business were right under my nose.

I am coming back now – and things have certainly changed. The old tensions between business and environmental interests have dissipated because there are no sides in a system that calls for (and could collapse without) cooperation. Wharton Genius can transform materials into all sorts of creative and useful stuff. But since stuff is depleting Earth’s raw materials, we need to cycle the stuff and keep it in commerce as part of a Circular Economy. What goes around comes around – from Recycling, Cradle to Cradle, and Zero Waste to the Circular Economy. Material to Product to Material to Product. Harnessing the value of the material economy. We have learned that we are better off walking in a cul-de-sac than down a one-way street.

But who is responsible for making these changes toward this circular economy? Who is responsible for wastes from mining? Emissions from burning coal, gas, and oil? Landfills filled with stuff? Pharmaceuticals in waterways? Old mattresses and tires in vacant lots? Toxics in our products?

Are these market failures? Or is this just the way the free market has been allowed to operate? We know that the free market is not free. But who is paying for the externalities that result from making and selling all the stuff? Is cleaning up a mess a voluntary effort? Or is this what we expect Government to do? And do companies pursue Corporate Social Responsibility only when it has marketing benefits that allow them to sell more stuff?

There are many questions to answer.

How do we create systems that balance regulation with the need to create a corporate consciousness that protects while it profits? How can we reorient our production and consumption patterns toward sustainability and reduce the level of material depletion? How do we create a new playing field so that product manufacturers design for recycling during product conception? And how do we link the benefits of sustainable development to the profit priorities that keep businesses running, producing, and solving problems?

The systems of production and consumption are piecemeal. We need to gather these pieces to develop an economic loop that creates value from waste all along the way, so that the loop keeps cycling over and over to unleash innovation and tap new ideas of which we can now only dream.

Join Scott Cassel, CEO and Founder of the Product Stewardship Institute, for a discussion about how Penn (and later MIT) equipped him to start an organization that engages consumer product companies to take responsibility for reducing the health and environmental impacts of the products they make and sell.

Earth, Water, Fire, and Air





By Austin Bream

These four elements define our modern environments, from the resources that nourish us to the habitats we live in to the motivators that fuel our actions. Just four elements and yet they form the basis for our everyday existence. For this basic reason, we, the Student Sustainability Association at Penn (SSAP), are hosting The Element Series. Over the course of this year, we will examine these four elements and how understanding them helps us understand sustainability and allows us to construct our future.

We begin with Earth on October 7th. Green Architect William Marston opens our conversation on urban agriculture before our screening of Growing Cities. We gather to discuss our growing cities and explore how our food supplies can keep up.

We continue our conversations with Water in early November. As IGEL hosts a Water Conference, we too explore our relationship with water. Through a speaker panel and a collective trip to a water treatment facility we examine Philadelphia’s water treatment programs and how we can be better stewards of our water habitats.

After the semester break, we conclude our Element Series with Fire and Air. In conjunction with Penn Green Campus Partnerships’ Power Down Challenge in February, we host a forum on fire, exploring the burning of fossil fuels and the potential for improvements in the energy sphere. And we conclude with a discussion of air to analyze how this vital resource can be protected and utilized for our sustained existence.

Earth, Water, Fire, and Air. Four elements define our modern environments. Four elements form the basis for our understanding of sustainability. And thus these four elements serve as the cornerstone of our year-long series as we set out to redefine our relationship with our environment. Join us.

For more information, please visit

Finance for the Environment

By Melusine Boon Falleur, a senior in the Huntsman Program at the University of Pennsylvania

Many of us Wharton undergraduates decide to work in finance during our summer internships and after graduation. Amongst the glut of prestigious financial service companies, most of us choose the path of investment banking while paying little attention to the underlying sector such as telecommunications or commodities. However, finance is a great tool that can profoundly change a sector. Through my summer internship working for a project finance company specialized in renewable energy projects worldwide, I discovered the extent to which finance is essential to find attainable environmental solutions. In this article, I will explain why students should consider going into the green sector if they want a finance challenge while making an impact.

One of the biggest impediments for the deployment of renewable energy is very high upfront capital cost. Unlike other sources of energy, renewable energy has almost no operations and maintenance costs, but requires huge capital expenditures at the start of the project. The challenge with green energy sources therefore lies in the cost of capital and not – as we often assume – in innovation and technology. Through my summer internship in project finance, I soon learned that there is a huge demand for creative financial instruments that reduce the cost of capital for renewable energy projects. Companies who have thrived in the green industry are the ones who secure cheap financing, not the ones with the best technology.

SunEdison, a very successful solar energy company, has achieved the scaling of solar projects by designing a pioneering financing scheme. Instead of directly selling solar equipment to customers, SunEdison owns the solar panels and sells the energy produced to its clients. This transfers the burden of the upfront investment from the customer to the energy company, who is more efficient in securing cheap capital for the construction than individual consumers. Consumers who were reluctant to invest a large amount of money for an energy installation now simply just needs to lease the solar panels or buy the electricity from SunEdison. This is just one of the many innovative financial structures deployed in the renewable energy sector.

In addition, local and national policies, such as subsidies and tax credits, also affect renewable energy companies and open opportunities to create profit-maximizing tools. SolarCity is an example of a company that successfully used tax credits to secure cheap capital. By selling its tax credits to large firms such as Google and Goldman Sachs, SolarCity created a way to borrow money without having to pay it back in cash. Today, the tax equity market in the United States offers very attractive returns for firms with large taxable income and helps renewable energy companies raise capital.

Throughout the summer, I have been exposed to many challenges that project finance companies faces in the renewable energy sector. Whether in the United States or abroad, renewable energy is a nascent field met by a lot of skepticism from investors. This is why, as a project finance company, we spend a lot of time finding ways to show our partners that our projects are indeed profitable investments. In order to achieve an attractive margin on our capacity deployment, we constantly need to find ways to reduce our cost of capital. We also need to ensure that our customers will be able to pay for the electricity that we sell them, especially when installing solar panels on commercial and industrial buildings. This implies finding ways of creating credit ratings for firms who sometime don’t publish any information. Because our projects are long-term (sometime as much as 30 years), we also need to find ways to secure payments through long period with Power Purchase Agreements. All these tools need to be carefully designed, and small improvements can have huge impacts on the profitability of a project.

Wharton Students who want to intern and work in the financial sector should consider the following: if you enjoy thinking creatively and using finance as a problem-solving tool, then the renewable energy sector (and the sustainability sector at large) is an amazing field to unlock your potential. There is a big demand for individuals who can think outside the box and find new models to reduce the cost of green energy. Not only will your work be interesting, but you will also have the fulfilling feeling of bringing positive change to the world.

Melusine Boon Falleur is a senior in the Huntsman Program at the University of Pennsylvania. She studies Environmental Policy and Management at the Wharton School.

Imagine H2O to launch inaugural Water Policy Challenge with $25k prize

PrintProgram sources policies that accelerate the use of water tech to combat California’s drought.

By Nimesh Modak

Imagine H2OTM, a leading accelerator for water innovation, today announced its 2015 California Water Policy Challenge. The Challenge aims to identify policy approaches that help California’s cities, farms and industries deploy water technologies. The winning entry will receive up to $25,000 in support. Students, faculty and other groups affiliated with Wharton IGEL are encouraged to apply today.

According to a recent UC Davis study, California’s drought has already resulted in an estimated $2.7bn in lost revenue and 18,600 lost jobs. Water available to agriculture in 2015 will be 67% below average. Policy that enables the deployment of water technology can not only address the state’s pressing water needs, but also create new economic opportunities, now and in the future.

Imagine H2O, whose accelerator portfolio represents over $1 in every $10 of early­ stage financing in the water sector, will work with some of the state’s leading water experts to identify policy ideas that effectively balance impact and political feasibility to drive the market for water innovation.

“This is an original, constructive approach to support the adoption of technology which will allow our economy to produce more with less water,” said AG Kawamura, Challenge Judge and former California Secretary of Agriculture.

Many of the technologies required to reduce the water intensity of California’s economy already exist. The problem has been incentivizing water users to deploy them. Policy improvements could remove obstacles to using worthy water tech solutions and create incentives for broader adoption of water tech.

“California’s success in renewable energy is largely a result of forward thinking policy,” said Buzz Thompson, Professor at Stanford Law School and Director of the Woods Institute for the Environment who will also be judging the Challenge. “It’s time California gave water the same attention it has given energy. Imagine H2O’s approach allows us to identify practical, intelligent policy solutions that can get technology deployed in California.”

Winners will be determined by an independent panel of California water experts. Finalists will participate in a showcase event in Sacramento in early 2016 after receiving mentorship from leading water policy practitioners. The winning entry will receive up to $25,000 in support to develop the policy idea.

Please visit to learn more and register online today.


About Imagine H2O

Imagine H2O inspires and empowers people to turn water problems into opportunities. The Imagine H2O Accelerator has helped over 60 innovative water companies win customers and receive more than $1 in every $10 of early stage financing in the water sector. To learn more about Imagine H2O’s global ecosystem for water innovation and connect with water entrepreneurs from around the world, please visit

Environmental Safeguards: Is AIIB Going to Follow the Rules?

by Tao Hu, Yanyang Wu, Li Zhu

Representatives of the 57 Prospective Founding Members (PFMs) of the Asian Infrastructure Investment Bank (AIIB) signed the Articles of Agreement of AIIB in Beijing on June 29th, 2015. Now AIIB has entered a more substantive preparatory stage that will lead to its operation at the end of 2015.

Is AIIB going to adopt the environmental safeguards comparable to those of the existing multilateral development banks? Will AIIB follow the World Bank and Asian Development Bank to implement the safeguards rigorously in its planned operation?

Environmental Safeguard Policies of Multilateral Development Banks

The World Bank, Africa Development Bank (AfDB), Asian Development Bank (ADB), and other multilateral development banks have over the years developed a series of standards and policy requirements for environmental protection, known as the “best practices”.

The World Bank requires its clients to implement the Environmental and Social Assessment and Management System (ESMS), in order to identify and manage potential environmental and social risks. AfDB requires its clients to conduct environmental assessment in accordance with its Environmental and Social Assessment Procedures (ESAPs). While both the World Bank and AfDB require all their investment projects to follow similar environmental assessment procedures, ADB classifies its projects into 4 categories based on their potential environmental impacts and applies different levels of environmental assessment requirements, including Environmental Impact Assessment (EIA), Initial Environmental Examination (IEE), and Environmental and Social Assessment and Management System (ESMS). There are also some projects with moderate or negligible environmental impacts, for which environmental assessment is not required according to the classification of ADB. China is a member state of these three banks, so making a comparison between their environmental standards is beneficial and informative for this new China-led development bank (Table 1).

Table 1


Since this is the first time China has led a multilateral financial mechanism, whether the Chinese government will follow the international standards and principles has been the center of attention for the international media. The United States has seen the AIIB as a potential competitor and challenger to the West-dominated international financial institutions established after the World War II, such as the World Bank and IMF where the US has the veto power, and the US/Japan-led Asian Development Bank (ADB). In one statement in response to UK’s move to join AIIB, the White House National Security Council said: “Based on many discussions, we have concerns about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards … The international community has a stake in seeing the AIIB complement the existing architecture, and to work effectively alongside the World Bank and Asian Development Bank.”[i] In a similar fashion, the United States Treasury Department has also raised its concern that AIIB might not meet the environmental standards, procurement requirements and other safeguards embraced by the World Bank and the ADB.[ii] Many other interested parties in the West continue to watch the progress of AIIB closely to see how it will be structured and governed so that it doesn’t undercut the existing environmental standards. Because they believe failure to do so will likely prompt multilateral development banks to race to the bottom in weakening environmental safeguards in order to attract clients.

AIIB’s Pledges and Actions

Mr. Jin Liqun, the secretary-general of the AIIB’s interim secretariat and possibly first president, clearly stated that the Asian Infrastructure Investment Bank would ensure that projects it funds are sustainable and environmentally friendly. At a think tank summit in Beijing last week, he said that “the regulations on AIIB lay out a set of environmental criteria for projects it will fund. It will explore a new development model that will try to address the conflict between improving people’s livelihood and environmental protection.” He also said that the “green” principle is to design a set of “high-standard” rules: “The bank has already drafted an environment-related document to be approved by member countries. It will also promote adoption of energy saving and environmentally-friendly technologies in its projects”. Mr. Jin also mentioned that the AIIB’s headquarters in Beijing will be an eco-friendly building.

AIIB is also actively cooperating with its international peers. Since last year, AIIB has been exchanging experience and lessons learned actively with the World Bank, IMF and ADB. In 2014, AIIB also invited former World Bank senior official and well-respected impact assessment expert, Stephen F. Lintner, to assist in crafting its environmental and social sustainability criteria. This gesture is very much an indication of AIIB’s intention to adopt high standards for environmental assessment, procurement process, and social impact of investment projects from the beginning.[iii]

Is AIIB Going to Fulfill its Pledges?

One major aspect of China’s mission to establish AIIB is to create a new governing model for multilateral financial institutions in contrast to the existing models of the World Bank and Asian Development Bank. Given the extraordinarily high stakes China has in this ambitious undertaking, China has every intention to ensure the success of this endeavor. And China has a very good track record in delivering such success stories, where it clearly has the political will and determination to deploy all resources at its disposal. The 2008 Beijing Olympic Games and Shanghai WorldExpo 2010 are perfect examples. Therefore, when the international community raises concerns over AIIB’s environmental and social safeguards, China listens and responds. For the Chinese policy makers, AIIB is as much a political and symbolic proposition as an economic and substantive one. Given this broad political context, it is therefore fair to say that to think that AIIB tends to automatically downgrade the environmental and social safeguards is purely speculative and misguided.

Also China’s credibility and reputation is staked on stewarding AIIB into an inclusive, transparent, and efficient multilateral organization that is built on a solid suite of policies, procedures, and best practices that have proven to stand the test of time. Without such building blocks in place, it would be very hard for AIIB to attract AAA rated countries, or to borrow competitively in the credit market. Given this, the belief that AIIB would be the convenient cash machine to finance China’s newly unveiled “One Belt One Road” Strategy is also unsubstantiated. For project financing that involves higher environmental and social risks under the “One Belt One Road”, it’s reasonable to believe that AIIB would tread very cautiously and exercise abundant restraint. From China’s perspective, it has ample choices in terms of financing vehicles in their toolbox, ranging from the China Development Bank, China ExIm Bank, to the Silkroad Fund, for such more contentious projects.

Besides, eight of the nine countries rated AAA by all main rating agencies (Standard & Poor’s, Moody’s, and Fitch) are AIIB members. These include Australia, Denmark, Germany, Luxembourg, Norway, Singapore, and Sweden. Given their shared values on and approach to environmental and social safeguards, they will likely act in unison when reviewing and deciding on such issues. Together their combined voting shares would enable them to effectively veto any lending proposals under AIIB they deem inappropriate or unacceptable. Therefore the alleged scenario where China would abuse its vetoing power to push through environmentally damaging projects is more a myth than reality.

Others in the US argue that AIIB would export the adverse side-effects of China’s industrialization to other parts of the region. Again this is highly speculative and unfounded. If we take a look at China’s commitment and performance under many international environmental treaties, China is doing quite commendably. China is one of the countries in the world that have signed most of the multilateral environmental agreements (MEAs), which is quite remarkable even compared to many Western countries.

Based on the analysis above, it is our belief that the environmental performance of AIIB in the future should be much more encouraging and positive than many people currently believe. Of course, for anything that’s just emerging, there is still a steep learning curve ahead.




Let Your First Credit Card Really Matter

By Arthur Newman

SustainGreen logo

Do you prefer organic food and support local farmers? Do you look beyond pretty packaging to seek out natural beauty products and household cleaners? Do you prefer to buy from companies that support social causes? If so, you are part of the majority of American consumers who are becoming socially and environmentally conscious shoppers. While this ethos has become commonplace in consumer goods, it is about time that the same scrutiny be applied to consumer financial products. Credit cards, those incredibly useful and ubiquitous rectangles of plastic, are an excellent starting point, particularly when you are seeking your first card. Look beyond the financial fine print to see if your credit card company shares your values.

While most credit cards work the same way, there are substantial differences in their commitment to social good. Your benefits can extend beyond airline miles and cash-back, which are often minimal and unsatisfying. Not surprisingly, a recent study showed most consumers place little value on traditional reward programs. Instead, consider a socially responsible credit card that gives back to a cause you support. Additionally, consider the environmental damage caused by the roughly 500 million credit and debit cards that end up in dumps each year – that’s a lot of plastic that will remain long after most of your purchases. Make a difference by getting a biodegradable credit card. It will not dissolve in your wallet, but once cut up and buried it will decompose. Finally, look into the issuing bank’s record on sustainability initiatives and social programs. Do their values coincide with yours?

Currently there are a limited number of credit cards tied to social causes and only one biodegradable credit card. Maybe the options are limited because banks underestimate the demand. It is up to consumers to drive change in this category, just as they have in consumer products. Not so many years ago, organic food was a fringe category, but last year Whole Foods had over $12 Billion in revenue. You can help drive a new revolution with your choice. Let your first credit card really matter.

About the author: Penn alumnus and eco-entrepreneur Arthur Newman is founder and CEO Sustain:Green. He combined his background in finance, green technology, and carbon markets with a passion for sustainable living to create the Sustain Green MasterCard®, biodegradable credit cards that reduce the cardholder’s carbon footprint with every purchase, while additionally funding rainforest preservation. Newman is now re-launching Carbon Rally, an information rich web-based gamification platform designed to reduce your CO2 footprint and save you money through individual and group challenges.

The Economic Power of Water

By Eugene Wu-Bin Chao

More and more communities are facing acute water scarcity issues due to population growth, urban sprawl, resource overuse, and climate change. In the past two decades, water demand has exponentially increased and this trend will continue. By 2050 the world will demand 55 percent more water and 70 percent more energy. Water reuse, recycling, and other innovative water treatment technologies and emerging solutions have been well-presented, discussed, and received on June 3 Wharton Initiative for Global Environmental Leadership (IGEL) and General Electric (GE) The Economic Power of Water Conference at Wharton EMBA San Francisco office.

The conference serves as a multilateral dialogue platform for government officials from Department of Interior, USAID, SF Public Utilities Commission, Orange County Water District., decision-makers and CEOs from GE, Electronic Recyclers Intl’., water entrepreneurs from WaterSmart Software, World Research Institute (WRI), scientists, water solution developers, to exchange ideas and form strategic partnership.

Jon Freedman, a member for Wharton IGEL, co-author with Colin Enssle, released a white paper: Addressing water scarcity through recycling and reuse: a menu for policymakers. The paper analyzes a broad range of international practices and identifies appropriate policies, which serves tremendous value across government agencies and water industries. In the paper, water reuse policy focuses on four categories: education and outreach, removing barriers, incentives, mandates and regulations. This helps governmental authorities form and think through their options and great practices for increasing recycling and reuse of water.

Wharton IGEL is dedicated to help government, private sectors, and global leaders, etc. to develop long-term partnership, to build coalition, and to provide access to public engagement in sustainable solutions across energy and water industries.



Helping Business Adapt to Climate Change

By Anthony Wagar

Corporations are keenly concerned about climate change. This was one of the conclusions that came out of an earth day conference panel at Wharton School of Business in conjunction with the Initiative for Global Environmental Leadership (IGEL).

The conference was entitled “Business Takes the Lead: How Innovation Will Drive Our Mitigation and Adaptation to Climate Change.” I was involved in the “Innovative Capital Deployment – Helping Business Adapt to Climate Change” panel session with business leaders from other industries.

Our discussion explored the role of capital in climate change mitigation and adaptation and discussed the potential business opportunities and risks associated with climate change and extreme weather-related events. There were essentially two main points that came out of our discussions.

Climate Change is High on Corporate Risk Concerns

Climate change continues to rank among the top 10 corporate risk concerns. Businesses feel a host of climate change concerns, but they tend to center around these five:

  • financial risk (in the form of legal liability and defense costs)
  • potential fines and penalties
  • government or regulatory concerns
  • financial disclosure requirements
  • reputational risk and public relations surrounding good corporate citizenship
Climate Change Represents a Huge Unknown

Investors and those involved in the deployment of capital don’t like unknowns. They like certainty and risks that can be managed. We demonstrated the supporting role of insurance and how the absence or presence of insurance can either deter or attract investments. In its simplest form, insurance exists to help manage/transfer risk and protect against the potential financial downside due to loss(es) so that businesses feel more comfortable operating and continue to invest in the future.

As one of the world’s largest industries, insurers are best positioned to assess and analyze risk, influence risk reduction behaviors and develop products and solutions to respond to risk (all the while managing their underwriting and investment income risk from loss and setting aside enough financial reserves/surplus to ensure sustainability of their business).

An effective response to climate change requires a combination of emissions reductions coupled with risk mitigation and loss prevention so everyone needs to do their part—including the insurance industry.


– See more at:

The New Insider Trading: Environmental Markets within the Firm

By As originally posted on Columbia Law School’s The CLS Blue Sky Blog

Global climate change is the most pressing environmental problem of our time. This fact has led legal scholars and policymakers to debate the relative environmental effectiveness, efficiency, and justice of different public policy instruments such as carbon taxes, cap-and-trade systems, and prescriptive regulation. Such scholarship tends to assume that the government is the key (or only) player setting and enforcing environmental standards against private firms, which are regulatory targets.

In a recent article, entitled, The New Insider Trading: Environmental Markets within the Firm,[1] (available here) I challenge these assumptions through a close examination of British Petroleum’s (BP’s) use of a private carbon emissions trading scheme and Microsoft’s use of a private carbon fee. I argue that this new “insider trading” should be considered as part of an expanded toolkit of options to address climate change. However, some caution is warranted when evaluating these forms of private environmental governance along various normative dimensions to ensure that they are not merely greenwashing. This argument fits within an emerging literature recognizing and assessing the role that private actors, including business firms and non-governmental organizations, may play to address environmental problems like climate change.[2]

In 1998, BP’s CEO announced publicly that BP would reduce its carbon emissions by ten percent (compared to a 1990 baseline) by 2010. To achieve this goal, BP created an internal emissions trading system. By 2002, BP terminated the program, having met its goal eight years ahead of schedule. BP adopted its emissions trading system for several reasons, including to develop expertise in emissions trading in anticipation of future public regulation, to reduce emissions at zero net cost to the firm in light of the firm’s decentralized structure, and to enhance its reputation – particularly at a time when many of its peer energy firms were continuing to oppose climate legislation vociferously worldwide. In creating its emissions trading system, BP faced many of the same challenges that public regulators face, including how high to set the cap, how to distribute permits/allocations among business units, how to enforce the trading rules, and how to set up the trading system.[3]

More recently, in 2012, Microsoft announced its intention to become “net zero” or carbon neutral in certain aspects of its business, including data centers, software development labs, offices, and employee business air travel.[4] To achieve this goal, Microsoft has implemented a tax-like private “carbon fee” on the emissions generated in these activities. Like BP, Microsoft faces many of the same issues that public regulators face in designing a carbon tax, including setting the right “price,” determining the scope of the program, and determining how to administer and enforce the program to ensure compliance by managers. In Microsoft’s case, the firm has touted publicly the benefits of adopting an internal carbon fee—which it still employs – in part because of strategic synergies with its software and cloud computing business. For example, if other firms adopted a carbon fee like Microsoft’s, Microsoft contends that they could reduce emissions by by transferring data to Microsoft’s cloud computing system or by using Microsoft cloud-based software to monitor and report emissions.[5]

Other private actors are now considering carbon charges and fees. For example, on April 20, 2015, Yale University’s Presidential Carbon Charge Task Force issued a report recommending that Yale adopt an internal carbon pricing system, with the charge set at the social cost of carbon, to properly align incentives for decision makers to reduce their energy use and carbon emissions.[6] The President and Provost of the University reported that Yale would begin with a pilot project. The full report of the Task Force is available here.

Such private environmental governance could potentially have a significant impact to reduce greenhouse gas emissions, and that the impact could be global in scope. For example, BP’s global carbon footprint arising from its onsite activities and purchased electricity is comparatively larger than that of sixteen states.[7] Indeed, according to data reported by firms to the CDP (formerly known as the Carbon Disclosure Project), the top fifty reporting business firms accounted for approximately three-quarters of all emissions in 2013.[8] These firms have some degree of control over the reduction of emissions globally – when individual nation-states lack the jurisdiction to reach global emissions. In addition, public regulators and private firms may benefit from dialogue over issues of design in ways that improve the effectiveness or justice of climate policy and practice. Finally, I argue that private emissions trading and carbon taxes send an expressive message – that everyone, including the private sector, has an obligation to take action to address climate change. In the absence of a single “magic bullet” to combat climate change, action by multiple actors – public and private – may be the best option.


[1] 34 Stan. Envtl. L.J. 3 (2015).

[2] Michael P. Vandenbergh, Private Environmental Governance, 99 Cornell L. Rev. 129, 133 (2013) (arguing that private environmental governance should be recognized as a form of law); Sarah E. Light & Eric W. Orts, Parallels in Public and Private Environmental Governance, 5 Mich. J. Envtl. & Admin. L. (forthcoming 2015) (arguing that public and private actors employ parallel forms of the primary categories of instruments to address environmental problems, including prescription, property rights, market approaches, tradable permits, informational governance, procurement and insurance).

[3] Light, supra note 1, at 31-41.

[4] Tamara “TJ” DiCaprio, Microsoft Corp., Becoming Carbon Neutral: How Microsoft is Striving to Become Leaner, Greener, and More Accountable (2012), available at; Tamara “TJ” DiCaprio, Microsoft Corp., The Carbon Fee: Theory and Practice (2013), available at

[5] See Carbon Fee, supra note 4, at 15, 36 (recommending Microsoft cloud-based software to monitor and report emissions; discussing increased efficiency of using cloud computing).


[7] BP Sustainability Review 2013 8 (2013), available at; CO2 Emissions from Fossil Fuel Combustion (2014), available at

[8] CDP Global 500 Climate Change Report 2013 8, 56 (2013), available at Sixteen American firms make the list of top fifty emitters of greenhouse gases (in alphabetical order): Air Products & Chemicals, American Electric Power, Apache, AT&T, Chevron, ConocoPhillips, Devon Energy, Dow Chemical, Duke Energy, E.I. du Pont de Nemours, Exelon, ExxonMobil, FedEx, Occidental Petroleum, Praxair, and Wal-Mart.

The preceding post comes to us from Sarah Light, Assistant Professor of Legal Studies and Business Ethics at the University of Pennsylvania, WhartonSchool. The post is based on her recent article entitled “The New Insider Trading: Environmental Markets within the Firm”, which is available here.

Rethinking our Relationship with Resources

By Patrick Cairo, Senior Vice President, SUEZ Environnement North America

5 9674-2Humanity’s relationship with the environment has reached a turning point. Ecosystems and economies are in transition and in trouble. Growing populations are exhausting an increasingly degraded climate and environment. Overburdened and obsolete infrastructure is in desperate need of investment. Taken together, all of this amounts to a gathering resource crisis on a global scale.

At SUEZ Environnement we recognize this mounting resource crisis as an opportunity – to lead the way from a crisis to a resource revolution.

On a global scale, we are advocating for a transition to a circular economy. That transition from an economy that over-consumes natural resources to an economy that optimizes management and use of resources can make a strong contribution to carbon reduction goals and go a long way towards securing resources for the future.

On a local scale, we are implementing concrete and measurable resource management solutions in collaboration with citizens, governments and industries.

From my vantage point, we can’t talk about our natural resources without talking about infrastructure. Infrastructure is the conduit for all of our resources––for their capture, their transport and their delivery.

california water waste CaptureOur water infrastructure––which stretches more than 30 times the length of the interstate highway system––is aging and leaking. In some parts of the U.S. our water infrastructure wastes more water than it delivers. Shockingly every day, approximately 6 billion gallons of water are lost to avoidable leaks––enough water to supply the entire state of California.

IMG_2027Speaking of opportunities in challenges, over the next two decades, our nation needs to collectively dedicate some $4.8 trillion to our water infrastructure just to maintain a state of good repair––with nearly $400 billion needed just to maintain a safe supply of drinking water. SUEZ Environnement, in partnership with KKR, developed a framework to tap the billions in private capital that has been described as “waiting on the sidelines” to invest in infrastructure projects.

Specifically, in Middletown, PA, and Bayonne, NJ we have implemented a win-win solution that brings together city authorities and private equity funds to finance local infrastructure needs and improve water quality.

Combining our own operational expertise with private equity’s long-term investment power, we are rebuilding outdated water treatment and sanitation systems and installing state-of-the-art smart metering technology that reduces wasteful leaks.

We need to act now to make infrastructure the centerpiece of our resource revolution––the foundation upon which we secure a safer, more prosperous future for all.