Category Archives: climate change

Energy Policy Now Podcast: How Alberta Overcame Discord to Enact Carbon Tax

Contributed by the Kleinman Center for Energy Policy, via Andy Stone

Carbon policy unexpectedly made headlines last week when a pair of Republican party elders proposed a national carbon tax with a few unique twists. The proposal from Treasury secretaries George Schultz and James Baker actually looks similar to the carbon tax that the Canadian province of Alberta enacted on January 1st with unusually broad buy-in from environmentalists, the energy industry (Canada’s oil sands are in Alberta), indigenous groups and government.

Energy Policy Now, the podcast from Penn’s Kleinman Center for Energy Policy, interviews Alberta’s senior diplomat to the United States on details of the tax and the collaborative process that made it reality.

Gitane De Silva, Senior Representative to the United States, discusses plan details including the rebate checks to the majority of Albertans to offset higher energy costs. De Silva also provides insights into the provincial government’s intended uses for the balance of the C$9.6 billion in tax revenue over the next five years.

IGEL at the COP22

By Eleanor Mitch, CEO and Founder of EM Strategy Consulting, Wharton alumna

The swift approval and ratification of the Paris Agreement[1] (104 countries of the 197, or 58%, have ratified the agreement!) was nothing short of “miraculous” in CIDCE[2] president Michel Prieur[3]’s words. Never before had an international agreement been so rapidly approved and adopted by so many nations in such a short span of time (approximately 1 year). Indeed, Prieur, one of the “fathers” of the principle of non-regression in environmental law, was instrumental in ensuring the addition of “this momentum is irreversible” in para.4 of the Marrakech Action Proclamation[4]. He has participated in the drafting of many international conventions since the 1970s and sees great hope in the rapid action even though we and future generations will still have to face the grave effects of climate change.

As part of this historic movement of awakening to the realities of the changes climate change must bring about, Wharton IGEL was represented with a presentation in absentia[5] by Eric Orts[6] on the implications for business of the Paris Agreement. Indeed, one of the key sectors that will be facing changes is the business sector. While markets have already chosen more sustainable energy sources in some areas (investments in wind and solar power, and Morocco boasts the world’s largest solar power plant, which just went live in 2016[7]), much more needs to be done, all throughout the supply chain, especially in Operations.

For the first time ever at a United Nations Framework Convention on Climate Change Conference of the Parties (UNFCCC-COP), an event uniting the ITC[8], IFAD[9], WTO[10], UNCTAD[11], UNFCCC[12] and UNFCCC Subsidiary Body for Implementation[13] was held to discuss how to move forward with business and trade on the Paris Agreement. During the event, Wharton IGEL Alumni Eleanor Mitch raised the point of the role of business schools, and especially IGEL’s, in leading the way to new business opportunities and innovation in sustainability. Given that Wharton graduates and those of other business schools will become business leaders, it is important to strengthen ties with the international law-making, enforcing bodies and business schools to prepare graduates to provide services and products for the challenges the world faces: environmentally displaced persons, sea-level rising, sustainable energy and consumption among others. Innovation and creativity-driven prosperity can come hand-in-hand with sustainable development.

 

[1] https://unfccc.int/resource/docs/2015/cop21/eng/l09.pdf

[2] http://cidce.org/

[3] http://cidce.org/structures-institutional/

[4] http://unfccc.int/files/meetings/marrakech_nov_2016/application/pdf/marrakech_action_proclamation.pdf

[5] Eleanor Mitch, presented for Eric Orts

[6] http://cidce.org/presentations-cop-22-cop-22-presentations/

[7] http://www.greenprophet.com/2016/02/worlds-largest-solar-power-plant-goes-live-in-morocco/

[8] http://www.intracen.org/

[9] https://www.ifad.org/

[10] https://www.wto.org/

[11] http://unctad.org/en/Pages/Home.aspx

[12] unfccc.int

[13] http://unfccc.int/bodies/body/6406/php/view/reports.php#c

After Fossil Fuels: The Next Economy

By Eric W. Orts, Guardsmark Professor of Legal Studies and Business Ethics, The Wharton School, University of Pennsylvania; Faculty Director, Initiative for Global Environmental Leadership

October 10, 2016

David Orr asked me to serve as a rapporteur for the conference that he organized (with a little help from his friends) at Oberlin College and was held from October 5-7, 2016, and I happily agreed. Wharton’s Initiative for Global Environmental Leadership was one of the first of a number of other organizations to agree to co-sponsor this conference, but the work of attracting a remarkable group of leading experts fell mostly to David and his staff. And what an impressive group they assembled! I have gone to conferences relating to the topic of climate change for more than twenty years, and this was by far the most impressive group of its kind. Headline keynotes were given by celebrity “top influencers” including Bill McKibben, Arnold Schwarzenegger, and Tom Steyer. In addition, the top executives of organizations including the Sierra Club ad CERES attended, as well as such other well-known names as Gar Alperovitz, Robert Kuttner, Hunter Lovins, and Bill Ritter.

My charge here is to attempt to review the overall course of the conference and to distill some of the major themes. My apologies in advance to anyone at the conference who may feel that I give them short shrift. Inevitably, my own intellectual bias will intrude in selecting the most important themes, but I hope to be as objective as possible in my reporting role. I will also try to be brief.

The conference divided roughly into three parts which were addressed on each day. Of course, different speakers crossed over into different areas, but in general there was an attempt to follow an agenda of organization that would lead to cumulative learning and engagement. Day 1 was devoted to a series of presentations on “theory.” Day 2 focused on elements of the post-carbon “next economy.” Day 3 considered “politics.” This report will follow this division, with transitional keynotes discussed as bridges between the categories.

Day 1: Theory

Elements of the theory needed to make progress on addressing the very large problem of global climate change were addressed by various presentations. These elements included the following.

Vision of sustainability. One must have a working definition of the goal one seeks to accomplish, and perhaps the best reference one can give here is to David Orr’s most recent book, Dangerous Years: Climate Change, the Long Emergency, and the Way Forward (2016). Both economics and politics are necessary to engage, as well as the science providing a background understanding of the challenge. A social transformation is needed to wean human civilization from the destructive use of fossil fuels—namely, coal, oil, and natural gas—and to replace them with renewable energy—such as solar, thermal, wind, and others. Making progress in greater efficiency and conservation in the use of energy is another imperative.

Systems approach. The study of interactions between the natural environment and social behavior and organizations requires a theoretical orientation appreciative of systems, rather than a reductive focus on linear processes. The “next economy” requires innovative new design and reform at both micro (local) and macro (global) levels.

Ethics and values. A general theoretical challenge is to incorporate a new sense of sustainable values and ethics into the social processes of business, work, capital markets, politics, and government. Views of business and markets as concerned strictly with “profit maximization” are inconsistent with this moral requirement. Seeing government as only a game used by people to gain power and influence is similarly impoverished.

Optimistic narratives and stories.   We know from studies in psychology that “optimism is functional” (see Martin Seligman’s work), and a general prescription from the conference seems to be that an optimistic attitude is best even when dealing with the very hard facts of current and impending climate change, including the relentless rise in global concentrations of greenhouse gases, and the fact that average global temperatures continue to set new records. Several presenters noted that 2014, 2015, and 2016 have been progressively the warmest years on record. Fourteen of the last fifteen years have been the hottest ever recorded. Nevertheless, theoretical attitudes toward solving the problem cannot succeed if they fall victim to pessimistic despondency and inaction. New language, metaphors, and concepts are needed. My own view, for example, is that rethinking the purpose and design of business firms is needed as one part of the larger solution (see Orts, Business Persons (2015)). Various presenters focused also on a need to rethink traditional concepts such as “capital” and “eco-system services.” The meanings of “sustainability” itself and somewhat newer ideas of “resilience” are also evolving.

Measurement and accountability. Scientific assessment of progress at all levels is needed as part of the theoretical background. Progress cannot be assumed, and the Paris Agreement opens the door toward better international accounting and verification of greenhouse gas emissions and various mitigation or adaptation strategies adopted by and within nation-states. Other large institutions, such as business corporations and nonprofits, should also install reliable internal accounting standards and practices, following the well-known mantra that “you manage what you measure.” Questions were raised about whether older measures of economic progress such as gross domestic product (GDP) continue to be useful—or whether it would be better to develop and follow new measures of well-being, sustainability, happiness, and freedom from hunger and homelessness.

Fairness and justice. Other key principles—emphasized, for example, by Nikki Silvestri—are fairness and justice, including especially racial justice. The phenomenon of Trump indicates also that many poor and working class whites in the United States have been hurt by current status quo policies. Everyone should be considered when making proposals for change, reform, and reinvention. Progress on climate change will not occur unless all citizens and consumers are respected and included.

McKibben Keynote

Bill McKibben provided a keynote in Finney Chapel at the end of the first day, and as a leading environmental activist (and indeed perhaps the best known activist who led the fight that shut down the Keystone Pipeline) his discussion focused on the need for a citizens’ movement to counteract the inertia and special interests supporting the status quo. McKibben struck three main themes.

Time.   First, climate change is unlike other social problems because incremental, slow progress will not be enough. Adverse effects from global warming are occurring faster than had been predicted twenty years ago. Arctic ice has melted. Ocean have acidified. Very soon, vast amounts of methane may release into the atmosphere from northern tundra landscapes. “If we do not solve [the problem] fast,” said McKibben, “we will not solve it.”

Stop fossil fuels now. According to one recent report, coal, oil, and natural gas companies own reserves that amount to four to five times the amount of carbon that can be safely emitted without blowing through the two degree Celsius average global temperature ceiling agreed as a target in the recent Paris Agreement. Another more recent report has found that current resources already being tapped by these companies will be enough to push the world past two degrees. For McKibben, and for some other environmentalists at the conference, such as the Sierra Club, this means that all expansions of fossil fuel production and distribution should be opposed and, if possible, immediately halted.

Force the change. McKibben sees the status quo, as represented by big fossil fuel companies such as ExxonMobil and their political influence, as the primary obstacle to positive change. Citizens coming together in a broad-based movement is the only way to counter the political influence of big oil and other large energy companies. A “Keystone-ization” needs to spread to other controversies, such as the current standoff at the Standing Rock Sioux Reservation to block the Dakota Access pipeline. There has been a long string of recent victories, and McKibben makes a strong argument that these should continue. Politics at the national level also matters, and McKibben opposes Trump on grounds that his campaign denies climate science and threatens to withdraw from the Paris Agreement.

Day 2: The Next Economy

                  Day 2 was devoted mostly to what the “next economy” in a post-carbon world would look like. Some participants, such as Gar Alperovitz, focused on the need for new local initiatives that break with the standard model of capitalist financing and management. Many examples of creative grassroots economic development were given, and a key lesson from many presentations is that good jobs are necessary for any environmental reform to succeed. The next economy must provide for secure and well-paid new jobs, because otherwise there will be no political will to make the change from business-as-usual. At the same time, other participants, such as Hunter Lovins, argued that big companies must become part of the solution too. Unilever and Walmart were discussed as positive examples, though a general consensus appeared to support the view that most large corporations were clueless, too casual, or actively dissembling (greenwashing). This widespread lack of true engagement by most businesses in finding climate solutions needs to change.

The financial markets play a large role in the problem as well. Mindy Lubber, the CEO of Ceres, examined various success stories of institutional investors pressuring public companies to disclose risk and performance measures regarding greenhouse gas emissions and climate change. In the U.S., the Securities and Exchange Commission has an important task to set “materiality” disclosure standards relating to climate change. Although the size of social impact investing may not yet have had a huge influence, it seems to be growing, and interest on college and university campuses regarding investment policies for endowments (including divestment) has been increasing too.

Mark Campanale of Carbon Tracker provided a well-received analysis of the “carbon bubble” that he and his colleagues have found in the disclosures of fossil fuel companies. A large percentage of assets currently owned by these firms “can’t be burned” if the two degree limit is to be respected. As a result, many of these companies may be financially overvalued—on the optimistic assumption that the political will is forthcoming to curtail this business model. At the moment, however, major investors do not seem perturbed—and they appear to be betting, then, that the two degree limit will be exceeded.

As for solutions, Campanale and other pointed out that the scale of the problem requires massive government (as well as private) investment. Historical low interest rates should be used to finance as much as $70 trillion in global investment in the repair and enhancement of infrastructure, including new smart grids and the development of renewable energy sources. (This very large number compares with $60 trillion as the approximate value of all publicly traded companies in the world.) A number of presenters spoke of the need for a scale of investment to address climate change similar to the expenditures made in fighting World War II. (And one questioner usefully asked: What will be the equivalent of a “Pearl Harbor moment” to provide sufficient motivation for this scale of investment?)

The need to engage with all people, especially those who feel disenfranchised or ignored by globalization, was emphasized, including urban black and white rural populations. Religious groups provide an essential organizational nexus for transformation at the local level. And leaders such as Pope Francis can have large influence at the global level. The role of cities, which account for 72 percent of greenhouse gas emissions globally, is also key. Joan Fitzgerald noted that the average greenhouse gas emissions in large cities were commonly much less that the average emissions of their countries as a whole. For example, average per capita emissions in New York and San Francisco are less than a third of average emissions of the United States as a whole.

New paradigms were also discussed, such as a need to move toward an objective of “plenitude,” as advocated by Juliet Schor, instead of economic growth. An attitude of plenitude adopts a view that natural resources should be enjoyed rather than exploited. And climate change policies need to fit into a larger strategic template that include other large-scale problems, according to Mark Mykleby and Patrick Doherty. Sustainability should go hand-in-hand with policies promoting economic prosperity and national security.

Brune Keynote

Michael Brune, the executive director of the Sierra Club, gave a transitional keynote speech that echoed McKibben’s call to oppose the expansion of the fossil fuel industry as a primary target. He first noted an impressive record of success for environmentalists, particularly in the Beyond Coal campaign. Of 200 coal plants proposed fourteen years ago, for example, 90 percent were stopped by coordinated activism and litigation. Six years ago, there were 523 coal plants in the United States, and today more than half of them have been retired. The well-known example of stopping the Keystone Pipeline has been replicated by a string of recent environmentalist victories against similar pipelines and projects. Finally and perhaps most importantly, the overall cost of solar and wind technologies has become very competitive with, and often cheaper than, traditional coal, oil, natural gas, and nuclear alternatives.

Brune then drew several lessons from his experience that provided a bridge to discussion about politics in the final day of the conference.

Keep winning. Recent environmentalist victories against the expansion of fossil fuel facilities should continue and, if possible, accelerate.

Reach out to Republicans and Independents as allies. Brune was the first to tag this theme which was later repeated by others. Many of the Sierra Club “wins” have occurred in very politically conservative areas of the country. Climate change cannot remain a cause only of one major party in the United States. Polls show majorities of Republicans believe in climate science and support transitional strategies (despite the rhetoric to the contrary expressed at the top national level). Supermajorities of the American public support policies to counter climate change as well, including many business leaders.

Get active.   People must organize and vote in order for change to happen. Solutions also must work for everyone (a repeated theme throughout the conference). Businesses that embrace climate friendly policies should be welcomed. And “what victory looks like” must include new well-paying jobs, including for unemployed coal miners and persistently marginalized populations.

Moss and Steyer Keynotes

A tag-team keynote session with Otis Moss and Tom Steyer highlighted themes of religion, race, and generational engagement as important. Moss reflected on his own effort to explain and translate environmental issues such as climate change to his religious constituents in order to make change “by any greens necessary.” Environmental justice links with racial justice in the United States, and Moss also emphasized the essential task of engaging younger people.

Tom Steyer agreed with the need to engage youth and described his efforts with NextGen Climate which, for example, has a presence now on fifty college campuses in Ohio. Steyer cited polls that indicated extremely high levels of support for clean energy solutions (around 80% of younger voters) and a transition to a 100% clean energy economy (91% of Millennials according to one poll).

Religious leaders are important as well, and the recent encyclical by Pope Francis carries great weight. Historically conservative icons such as leaders in the military provide another fulcrum from which change may be leveraged.

Day 3: Politics

It is fair to say that the outsized Arnold Schwarzenegger stole the show on the last day of the conference. The former Republican Governor of California made an impassioned case for both parties to tackle the challenge of climate change in a bipartisan manner. His catchphrase, riffing on a famous speech by Obama, was that “there is no Democratic water and Republican water; no Democratic air and Republican air.” He embodied pleas by other participants that Republicans had to come to the table, and he was hard to miss or ignore.

Sharing the stage with Tom Steyer, a Democrat who is known for bankrolling politicians who embrace climate friendly positions, the former Governor elevated California as an example that the rest of the United States could follow. Simply “copy us,” said Schwarzenegger, and I “guarantee” economic growth as well as climate progress. He compared California’s economic and environmental success to Germany’s.

In addition, Schwarzenegger emphasized that the fossil fuel companies (which he described as mostly coming from Texas) had to be opposed. He claimed, with respect to their attempts to lobby against reform, that “we terminated them.” (At the same time, he recognized the ability to work with them on climate-friendly projects such the introduction of hydrogen fuel by Chevron in California.) He reiterated a theme heard throughout the conference that policies to address climate change had to provide good jobs too. In his view, California provides an example for other states (including Ohio and Texas) that green policies can lead to economic prosperity. Interestingly, Schwarzenegger found that some of the biggest opponents of environmental policies or initiatives were in fact environmentalists. For example, proposals to build new solar plants in deserts were opposed and delayed on grounds of threats to endangered species such as tortoises.

Steyer largely agreed with Schwarzenegger on the main points. Both argued for economic growth (which was a contested idea for other participants who see a conflict emerging between growth and sustainability). Both emphasized the importance of jobs. Both made the case of a shift toward bipartisan engagement at the national level.

Earlier in the day, Robert Kuttner provided an incisive commentary on the current political situation. White working class people hurt by governmental policies for several decades appear to have become a wild card supporting the likes of Trump and his anti-establishment, anti-globalization, and anti-science rhetoric. Commenting on “the presence of prophetic voices” at the conference, such as McKibben, Kuttner argued that the deeper roots of Trumpism had to be recognized and countered in order to establish a political consensus to address climate change.   He argued against the “liberal elitism” that embraced climate change as a major issue and yet ignored large losses in wealth and well-being of large swaths of the population. A “possible politics” to remedy the situation could focus on reducing levels of material consumption and reversing the incentives that encourage what he called “predatory capitalism.” He also echoed calls by others at the conference for a massive investment in infrastructure, taking advantage of historically low interest rates. Climate change is a challenge “such as we’ve never faced,” he said, and we are “groping for analogies (but not in Trump’s sense of groping).” Kuttner concluded with one memorable quote from the conference, reflecting on the need to take our grandchildren’s perspective into account: “We need not just to be right; we need to win.”

Conclusion

Many others paid tribute to David Orr at the conference, and his inspiration informed many contributions. I will do so here as well, and mention again that these reflections are sifted through my own particular lenses. I would urge interested readers to consult sources provided at the conference for further avenues of self-edification and engagement. I will leave the last word to Orr, though, and quote the following from his new book, which I believe embraces the spirit of the conference overall:

I do not believe that we are fated to destroy the Earth by fire, heat, or technology run amok. But if there is a happier future it will come down to this: to act with compassion and energy, our hearts must be in it; to act intelligently, we must understand that we are but one part of an interrelated global system; to act effectively and justly, we must be governed by accountable, transparent, and robust democratic institutions; and to act sustainably, we must live and work within the limits of our natural system over the longterm. (Dangerous Years, p. xi)

If we are as a civilization in some measure successful in addressing the massive challenge of climate change, the Oberlin conference on “After Fossil Fuels: The Next Economy” will have had some role in inspiring and informing this future success. It was a privilege to be there for the experience, for the education, and for the inspiration.

Following the Green Brick Road with MES and IGEL to Real-World Sustainability

By: Nathan Sell*

January to July 2014 were the quickest and perhaps busiest months of my life to date. As a Masters student in the Environmental Studies program at Penn I was finishing up my degree, joining the Initiative for Global Environmental Leadership (IGEL) team, and job hunting. My time at IGEL was an invaluable experience in many ways. I joined in the thick of event planning just as the annual conference and a host of other events were all being planned.  This “trial by fire” had me leveraging my new knowledge as an MES student, as well as my educational background, and building a new set of communications and outreach skills.

I was in awe at the audience that IGEL has and the power that its events have to bring together leaders in sustainability and push the discussion on what companies can do for business and the environment. A lot of the skills I refined while at IGEL both caught the attention of my current employers and have served me well in my new role.

As a participant in the ORISE (Oak Ridge Institute for Science and Education) program, I’m working with the EPA Office of Water at the headquarters in Washington, DC. As part of the Climate Change Team, I work on issues closely tied to sustainability.  Balanced between communications and research, a portion of my work is dedicated to facing EPA’s message to the public through social media and outreach. My research at the moment focuses on “Blue Carbon,” carbon sequestered within coastal marine ecosystems such as mangroves, sea grass beds, and salt marshes. Blue Carbon is getting a lot of attention, and for good reason. These ecosystems are shown to store carbon up to 100X faster than terrestrial ecosystems such as forests, and store this carbon for incredibly long periods of time. They’re part of the puzzle to building climate change resilience. Seeing how policy can be leveraged for additional protection and expansion of these threatened environments, and seeing where business can build blue carbon into international carbon markets are some of the drivers that will be increasingly important in the future.  It’s an exciting intersection of science, policy and business that I’m thrilled to be working on, and an amazing way to begin putting my MES degree and IGEL experience to use.

*Nathan is the former IGEL Coordinator and currently works with the EPA Office of Water on their Water Policy Staff.  @mister_sells

Adapting to Climate Change: Environmental Liability

By: Anthony Wagar

Over the past several years, more and more companies are becoming increasingly aware of climate change issues and the necessity for sustainability/resiliency planning.  This awareness comes in many forms but primarily centers on how their business might be affected financially (through legal liability, fines/penalties, government regulations, and financial disclosure requirements) or just simply public relations surrounding responsible corporate citizenship. 

As the climate change threat becomes more real, based upon its estimated path into the future, industries are preparing for the potential impact, the importance of sustainability planning and facing that possibility that they may need to be prepared to pay a price on their carbon output.

This is not isolated to only major oil companies or large manufacturing companies who utilize vast amounts of coal to generate energy (some companies that have already taken the initiative to consider sustainability planning include firms such as Microsoft, General Electric, Walt Disney, ConAgra Foods, Wells Fargo, DuPont, Duke Energy, Google and Delta Airlines just to name a few).

Storm Surge and/or Flooding

Adverse weather events such as flooding, storm surges, droughts and heat-wave could lead to unexpected clean-up costs and/or pollution legal liabilities issues.  A few “real life” examples illustrated below.

Historic/Pre-Existing Contamination

Properties having historical or pre-existing contamination could be disturbed and, subsequently, carry pollutants to multiple locations resulting in the cross-contamination of various parts of the property and/or neighbouring properties.

Landfills

Heavy water infiltration can cause landslides carrying with it pollutants and/or contaminated waste water into nearby waterways or sensitive third party receptor areas.

Drums and Storage Tanks

Drums containing hazardous waste and storage tanks containing oils and other chemicals could be raised afloat and damaged during transport from their original locations, thereby distributing pollutants downstream.

Sewerage Authorities

Sewerage authorities have limited storage and processing capacity, therefore, large unanticipated volumes of water could result in the overflow and/or release of raw untreated sewage.

Mold Damage

Mold can grow at alarming rates given proper moisture, temperature range and food source (cellulose based substrate) following a saturation event.

“Green” Materials

Many environmental insurers are now providing coverage which give Insured’s an option to replace property with “green” materials following damage from pollutants, hence, further reducing their “carbon footprint” and addressing sustainability issues.

Many businesses experienced these scenarios during Hurricane Sandy, which resulted in costly remediation, bodily injury/property damage and staggering legal defense costs.

Droughts and Heat-Waves

While most of these loss scenarios discussed above would be addressed under a pollution legal liability policy, there are other “non-pollution” related environmental damages that would not be covered. For example:

Loss of Operating License

A major soft drink company lost their lucrative operating license in India because of an exhaustion of water resources used as raw material.

Supply Chain Disruption

A major footwear and clothing manufacturer was disrupted because an extreme weather event negatively affected cotton growth (which as one of their primary raw materials).

From a risk-management perspective, all of these exposures affect a company’s business risk and, ultimately, how insurers may view them in terms of underwriting appetite, coverage, premium, and limit for certain classes of risk.

While public policy and government intervention can help raise the importance and address the climate change issue, it’s actual corporations that can make the most impact through their own individual greenhouse gas reduction and sustainability efforts to ensure their own business success and longevity.

Climate change will continue to be one of the top concerns facing businesses across the board. Therefore, adapting proper risk management strategies and loss control planning measures early on is key.

– See more at: http://blog.willis.com/2014/04/adapting-to-climate-change-environmental-liability/#sthash.7eCgYB7w.dpuf

Is Your Business Safe from Climate Change?

By: Anne Coglianese

Climate change poses global threats to the environment, but do you know how it will affect the quality of life where you live and work? If you own a business, do you know how climate change will affect your bottom line? A recent report called Risky Business: The Economic Risks of Climate Change to the United States helps businesses identify and prepare for the specific, local risks that climate change poses.

To the average citizen, climate change may feel abstract, and many people believe that only coastal communities will be affected. However, the Risky Business report draws attention to effects far beyond sea level rise, including mortality, storm surge, crop yields, and energy, to name just a few.  For the first time, individuals can narrow in on their region to learn which issues are most relevant in their state, discovering how closely climate change will affect all of us.

The report was released by the Risky Business Project, started in the fall of 2013 when the nongovernmental organization Next Generation paired up with Bloomberg Philanthropies and the Paulson Institute to research climate change’s economic threats. The report stresses “this is not a problem for another day. The investments we make today—this week, this month, this year—will determine our economic future.”

The Risky Business Project’s website makes the group’s report highly interactive and more informative. Due to the many videos, images, and charts found on the website, visitors can easily digest information on climate change risks.  For example, the website contains a video designed to help individuals understand the progression and threat of extreme weather changes.

What makes the report truly unique is the focused analysis provided. By breaking the US into regions and states, Risky Business targets the climate concerns in specific parts of the country as well as nation-wide.  The website then allows individuals to scroll through date on their prospective locations.

The report focuses on climate risk education in order to provide businesses with the information necessary to begin taking action to sidestep catastrophe. It highlights three areas to reduce risk: business adaptation, investor adaptation, and public sector response. Throughout various sections of the report, one thing becomes clear: a shift towards sustainable business and investment needs immediate action.

Former New York City Mayor, Michael Bloomberg, a co-chair of the Risk Business Project, and a key player in the development of this report, recently stated in an interview:

Damages from storms, flooding, and heat waves are already costing local economies billions of dollars—we saw that firsthand in New York City with Hurricane Sandy. With the oceans rising and the climate changing, the Risky Business report details the costs of inaction in ways that are easy to understand in dollars and cents—and impossible to ignore.

To learn more about climate change and find your business’ next move, visit the Risky Business Project website.

The Win-Win-Win of Impact Investing

By: Nathan Sell*

Ask not what your investment dollars can do for you, but ALSO what they can do for others, and the environment. That’s the idea behind Impact Investing, an emerging paradigm shift in philanthropy. This form of socially responsible investing generates both measurable social and environmental impact as well as returns on investment. Mark Tercek, CEO of the Nature Conservancy and former Managing Director at Goldman Sachs is at the forefront of linking business and the environment for a better world as he discusses in his recent book “Nature’s Fortune.” Tercek, and the new wave of impact investors are proving that your investments can make money AND do good.

Impact investing in the environment is quickly coming to scale as the value of ecosystem services to clean air and water, armor shorelines, as well as climate change mitigation and adaptation is being realized. Cities like Philadelphia are leading the way in green infrastructure investment. Over the next 25 years, Green Stormwater Infrastructure will help the city to combat the extreme weather patterns as well as prevent Combined Sewer Overflows resulting in greener cities and cleaner waters for which the initiative is named.

Novo Nordisk entered China in 1994 and immediately noticed that a diet high in starch was leading to diabetes in a large portion of the population. Combined with rapid pathogen spread due to urbanization, the health of the people in China was (and continues to be) at risk. Novo Nordisk put their efforts toward alleviating some of these health concerns. By training doctors in diabetes care and prevention, the company has helped to save over 140,000 life years. The shared value of impact investment ensures companies like Novo Nordisk remain profitable while helping the communities in which they work.

Impact investing also has the potential to bring promising technologies to scale. Without investment, it’s possible that companies like d.light may never have gotten off the ground. With the help of investment, this for-profit social enterprise has been able to sell affordable solar lamps to those without reliable power. The result? D.light is bringing safe, bright and renewable lighting to people around the world, allowing students to do their homework, families to cook, and an overall better quality of life to over 34 million people.

Impact investing may prove better for people and the planet than charitable giving. Investing in businesses that do good by people and the planet can ensure the success of their mission, allowing for long term solutions, rather than a potential band-aid in the form of a grant or gift. If your investment could benefit the triple bottom line, rather than just YOUR bottom line then you’ve found the rare win-win-win scenario. The next time you invest, think strategically about what your money can really do.

*Nathan is a recent graduate of the Master of Environmental Studies program at the University of Pennsylvania and a current ORISE Fellow with EPA Water.

The Impact of Climate Change on Global Food Production

By: Anne Coglianese

Water scarcity is a growing global issue and one that is significantly exacerbated by climate change. Agricultural industries around the globe are facing drastic consequences due to limited access to freshwater. According to the Intergovernmental Panel on Climate Change [IPCC], the change in supply will “exacerbate competition for water among agriculture, ecosystems, settlements, industry and energy production, affecting regional water, energy and food security.”

Such scarcity may seem surprising because the world holds 332.5 million cubic miles of water, a seemingly infinite supply. However, very little of this is life-sustaining freshwater. In fact only 2.5% of water on earth is fresh, and much of this tiny amount is inaccessible for human use due to storage in either glaciers or the ground. According to the US Geological Survey, water sources, such as “rivers and lakes, only constitute about… 1/150th of one percent of total water.” However, these are the very water sources upon which humans rely most heavily.

The IPCC states in its 2014 report that climate change is projected to strain freshwater resources significantly. The report also states “each degree of warming is projected to decrease renewable water resources by at least 20% for an additional 7% of the global population.”

My interest in issues surrounding climate change and water grew as I attended a semester abroad last year with the International Honors Program, studying climate issues in four countries: the US, Vietnam, Morocco, and Bolivia. I, along with 25 other students, looked at ways to mitigate and adapt to issues that climate change will bring to food, water, and energy. Throughout the semester, I conducted independent research on the impacts that climate change and water scarcity have and will continue to have on agriculture around the world.

I learned quickly that the two are viciously linked: food production will be drastically affected by water shortages caused by climate change, but conversely agriculture plays a huge role in creating water shortages.

Technology is making great strides to help farms conserve water resources and adapt to an increasingly arid climate. Most farmers around the world use open-air irrigation systems, such as sprinklers or channels, which lose a large quantity of water to the air as vapor, long before reaching crop roots. This means that significantly more water is being used in irrigation than is being effectively used in crop production.

Drip irrigation systems have been developed to reduce water needed for irrigation. These systems dispense water directly to the crop roots through underground hoses that slowly release water. The implementation of drip irrigation can do an incredible job of reducing the strain agriculture puts on limited water resources.

Unfortunately, the average farmer in most countries cannot easily implement this technology. Whether in the US or in countries like Morocco, farmers already face narrow profit margins and struggle to become more sustainable without the financial support and education needed to implement new technologies.

Advances in technology are going to become key in preserving agricultural sectors around the world; however, technology will not be enough to sustain farming in many regions. It will become increasingly important for farmers to begin tailoring the food they produce to match the climate.

In the last fifty years, our export-oriented world has driven farmers to seek out the most profitable crops and grow them in the highest quantity possible. For example, Morocco has high fruit exports and high imports of grains; however, the arid farms of the Atlas mountains would be better suited to growing less water-demanding crops, like grains, rather than the more water-intensive crops, like fruits. Around the world, crops produced for export often lead farmers to strain the natural capacity of the land, requiring the use of fertilizers and extensive irrigation, which threaten water supplies.

The scope of the issue of water scarcity and food production is vast and growing due to climate change. No one individual or farmer has the power to reverse this scarcity, but with needed support from governments and corporations the agricultural sector can transition to widespread sustainable food production in order to avoid looming social and economic fallouts.

A Global Push For Climate Finance

By Aubrey Sherretta

June 3rd 2014 marked the launch of the Global Innovation Lab for Climate Finance, a partnership between the US, UK and German governments with several private sector representatives to develop and promote climate finance instruments globally.  The lab includes leaders from governments and financial institutions who will identify and analyze financial opportunities for private investment that could have large-scale impacts on both climate change mitigation and adaptation.  Overseeing the analysis of proposed climate finance instruments are the Climate Policy Initiative and Bloomberg New Energy Finance.

Lab Principal Purna Saggurti, chairman of global corporate and investment banking at Bank of America Merrill Lynch said: “We look forward to sharing our experience from structuring and financing numerous transactions in clean energy, green bonds, and environmental markets.”  Bank of America, a Wharton IGEL corporate advisory board member, along with Merrill Lynch have already committed to mobilize 70 billion dollars for low-carbon business opportunities.

Large-scale investments are required to reduce emissions and adapt to the effects of climate change, according to the United Nations.  The Global Innovation Lab for Climate Finance’s push to incentivize climate investment may be viewed as a major step towards mitigating the adversities of a changing climate.  The lab has already attracted more than 80 ideas for potential climate finance instruments from the public and private sectors, and hopes to attract billions in private investment for climate-conscious investment opportunities in developing countries.  Changing the dialog around climate change from financial burden to opportunity may be the greatest motivator to bring about a new era in climate action.  Keep an eye out for chosen ideas to be released by the lab in the coming weeks.

Also, stay tuned for Knowledge@Wharton Special Report on this topic coming later this year.

The Malaysian Airlines Flight Disappearance and the Future Epic Battle between Data for Good and Evil

By Gary Survis*

It was only a matter of minutes after the discovery of the missing Malaysian Airlines flight MH370 that questions began to be asked about the data.  How could a Boeing 777 jet airliner disappear without a digital trace?  What about the data the airplane collected?  What about the tracking data?  The transponders?  How about the satellite “pings”?  What can  the cell phones’ GPS’s tell us?  It was assumed that the quickest path to answering questions about the mysterious flight disappearance was to decipher the big data digital stream that the plane must have created.  One response was a “crowd sourced” effort to use big data to locate the plane.  People believed that in this age of data omnipresence that leveraging data to solve the mystery was the obvious next step.  Some of the same people who feared the NSA’s intrusions and monitoring, were hoping that data held the answer to this enigmatic puzzle.

Malaysian flight 2

But, as the story began to unfold, it became apparent that whoever was perpetrating this “deliberate” act also understood the power of data.  The slow discovery that the transponder and ACARS system (used to transmit maintenance data to the ground) were “turned off” showed a high level of sophistication and knowledge of the data a modern jet creates.  In fact, during a typical 6 hour flight, an airplane will create between 250 and 500 Megabytes of data.  Those responsible for taking action on this flight understood data, how it might be used to locate the plane, and the need to control it.

And so it seems that we are embarking on a journey to a new era where there will be an epic battle between those that will use data for good and those that will seek to control it for evil purposes.  Today, when we talk of big data, we recognize that we are only in the early stages of this transformation.  The internet of things promises even more data in the future from a multitude of industrial devices and sensors.  Who controls this data and for what purpose will be one of the defining discussions of our age.

starwars

One area where there is hope for data being leveraged for good is in the area of sustainability.  We face many seemingly intractable challenges to our future including feeding our population, evolving to respond to the reality of global climate change, and managing our finite resources in the face of unrestrained development and growth.  The list of projects where big data is being used to attack these issues is encouraging.  Space Time Insight is using geospatial visualization to help utilities deliver the smart grid and integrate more renewables into their mix.  Google and the University of Maryland are partnering to develop satellite driven high resolution interactive maps that can track deforestation due to fire, logging, and other sources.  Companies like Monsanto and DuPont are developing “prescriptive planting” technologies that gather and then feedback data to farmers on everything from planting depth, distance and farm machinery productivity.

And these are but a few of the many very promising uses of big data in sustainability.  On March 27th, the Wharton School’s Initiative for Environmental Leadership (IGEL) will be hosting a conference to examine this topic entitled Sustainability in the Age of Big Data.  Companies such as Shell, SAP, IBM, Dow, and others will be grappling with both the power and promise of big data in the sustainability space.  The hope is that business will begin to harness the immense potential of big data to be used for good and begin to solve some of our society’s most pressing problems.

It is still early days in defining how we will use all of this data that we will be creating in virtually every aspect of our lives.  At Syncsort, where I work, we are helping the Fortune 100 begin to discover how to employ this data in transforming their business.  I remain optimistic that good will prevail over evil.  But, I am also realistic.  With open source technologies like Hadoop, massive open data projects, and increasingly inexpensive computing technology, it has never been easier for those that wish to use data for evil to have sophisticated tools previously available only to governments and the largest commercial enterprises. As with the Malaysian Airlines flight disappearance, people want data to be used for good, but it can also play a more sinister role.  Let us hope that we truly understand data’s power and that good prevails over evil in this epic battle for the future of big data.

*Gary Survis is Chief Marketing Officer, Syncsort Data Integration, leading Syncsort’s global Big Data integration marketing team. Gary is a seasoned marketing executive with experience combining traditional and digital marketing tools to provide practical solutions to today’s marketing challenges. He is also currently a Lecturer at Wharton and a Senior Fellow at Wharton’s Initiative for Global Environmental Leadership.