If you’re thinking about an MBA because you’re interested in MBA-stuff (economics, corporate finance, managing a business) but also interested in recycling, pollution, electricity and climate change, AND you’re looking to drive yourself crazy… well then I have an idea for you. There are ways to combine all of these. 2018, my third year as an expat in Italy, was absorbed by a masters degree that squished 16 courses into seven months. Seven very intense months, adding up to something like a mini-MBA in sustainability.
I graduated from Bocconi University, in Milan, on March 15th, 2019 (don’t ask me why the ceremony wasn’t the same year that I went to school). But it worked out perfectly – that also happened to be the date of a climate strike that, at the time, was the world’s biggest environmental protest ever. In less than a year, that record has already been broken more than once. This was one of many coincidences, where everything happening in the world made me feel like I was studying the right thing at the right time.
So I decided to share a bit of the knowledge – after all, it’s a big part of what inspired me to start writing more about sustainability in the travel industry. I’m also writing this because this is the future. These are the most universal problems we face – no one is unaffected by air pollution or climate change, and there are massive business opportunities in solving them.
Certainly this list is incomplete. And usually I’m leaving out the technical parts.
That being said, here are a few of the things I learned and the questions that were answered in eco-energy-business school:
1. I’m not the only one who cares about this stuff!
From the beginning of the program, it seemed like the world was headed for a moment of immense change – and I wasn’t the only one. (No, I’m not talking about other students.)
The week after classes began, Larry Fink – chairman of BlackRock, the biggest investment company in the world – released his annual letter to corporate CEOs. (It’s less boring than it sounds!)
This letter was shockingly different from what anyone expected from the most influential money manager in the world: It said corporations have social responsibilities beyond making money. And he sent it one week after I started a degree with the words Corporate Social Responsibility in the title. It was too good to be true.
Larry’s letter said companies do not and cannot exist solely for the purpose of making money, because making money is not a purpose. And he said companies with no social purpose wouldn’t benefit from the bags of money under his control.
No one had heard anything like this (from someone like that) in more than a generation.
So it didn’t just fade away with the news cycle. It was the opposite of the non-ethics philosophy of business ethics that Milton Friedman popularized in 1970 (which we also studied in class).
Milton’s idea was more like this: Companies shouldn’t care about anything besides making money. And they shouldn’t spend money on anything besides making money. (So no employee health care, pensions, or parental leave. No sponsoring parks around their cities or building libraries unless those things are in the self-interest of the company. No fun at all – except for stockholders. Just money.)
Basically, Milton’s was the guiding philosophy of how the relationship between the US government, corporations, and workers has changed since the 1950s – unions losing strength, minimum wages and average wages losing ground to the cost of living, Reaganomics, corporate tax cuts, and the concentration of wealth with the people who don’t need any more of it.
But right when I started studying sustainable business, a massive figure in the business world took a stand against all of that. Was the stand the solution to all of our problems? No. But it was certainly a statement: Important people are paying attention.
2. We have to find ways to include the environment in the price of everything.
This is Environmental Economics 101, and I promise it’s the most economics-y part of this whole post.
This is (basically) the problem: Prices of things only include the cost of making the things. Prices don’t often include all the valuable free stuff the producer benefited from (and maybe also destroyed) in the process of making the thing. Examples of valuable free stuff are biodiversity, a healthy forest that supports life, natural places that attract tourists, clean air and clean beaches.
When companies mess up the environment and don’t have to pay for it, it’s called a “negative environmental externality.” Externalities are things that don’t count in the economy – they aren’t factored into prices. Some examples of externalities are greenhouse gas emissions, other types of pollution, deforestation, and beaches covered in trash.
Now you may think: But wait! The companies clear cutting forests have to pay for the trees they harvest, or they have to buy permits, and buy their saws and hardhats and stuff.
True. But none of that includes the price of not having a healthy forest anymore. No more habitat for animals to live in. No more carbon sink, no more nice place for tourists visit. All of these things are worth cash money, but no one is getting the bill for using them up.
Too often, companies only pay the cost of extracting what they use, not the cost of degrading the resource and the surrounding environment for everyone else.
We have ways to fix this!
In fact, fixing this is the idea behind carbon taxes and carbon markets – two ways of putting a market price on greenhouse gas emissions.
Right after I finished my courses, the Nobel Prize in economics went to Yale professor William Nordhaus for studying carbon prices and the effect of climate change on the economy (which he’s been doing since the 70s).
3. The biggest drivers of climate change are the first things we do when we get up in the morning.
Housing, food and drink, and private transportation.
So how are we supposed to fix the problem if it’s caused by everything we do? By breaking it down into manageable pieces. For example:
Switch to a renewable energy supplier. This is something you can do. If you live in Illinois (like me) you can do it here. And turn off the light when you leave a room.
Eat less beef. Why? Beef emits many times more CO₂ by weight even compared with chicken or pork. Forests absorb carbon, and most deforestation is either to create farm land to grow corn and soy to feed to cows, or to use as pasture for cows. So by eating less meat, especially beef, you personally reduce climate change. (Notice I didn’t say zero meat, because perfect is the enemy of good. I’ll have an entire post about that soon.)
Take public transport if it’s available, and stop buying SUVs to drive around town if it’s not. Are big cars really the luxury we care most about? Do we really want an SUV more than we want biodiversity and dependable weather patterns? Let’s rethink what actually brings joy. And remember companies want us to change our preferences toward bigger cars because they cost about the same as smaller cars to produce, but sell for way more. Don’t be tricked into thinking you want the SUV for any reason other than Ford wants you to want it.
4. Carbon dioxide does… what exactly?
Maybe it shouldn’t have taken grad school to remind me of what I’m sure kids now learn in elementary school. But I won’t lie… a refresher came in handy.
I’m going to simplify this a lot:
Carbon dioxide (CO₂) is just one type of greenhouse gas (GHG), but it’s the most common one emitted by people. There are six big ones, or rather six big categories. Methane (CH4) is another. (Contrary to popular belief, cows do not fart methane, they burp methane. And they do it so much because they evolved to eat grass. The corn they eat while being raised in industrial agriculture makes them unhealthy. Here’s a vintage PBS interview with Michael Pollan, one of my favorite food writers, that explains it well early in the article. But I digress.)
Normally when sunshine hits the earth, about half of it gets bounced out and eventually escapes to outer space in one way or another, while the other half stays here and warms us up. (If you want more detail, here’s some from NASA.) The build-up of the sun’s heat over time is part of the reason why we’re not currently in an ice age, and it’s thanks to the naturally present greenhouse gasses.
Extra greenhouse gasses absorb more of the sun’s heat as it comes bouncing off the earth. The gasses heat up and bounce their heat back out in all directions instead of letting it escape. More gasses equal more warming.
CO₂ is the most common gas because it comes from burning fossil fuels, which we do a lot of. Coal, gasoline, diesel or natural gas – whether to heat a building or fuel a car, an airplane, a space shuttle, a steam ship, or a power plant. It all releases CO₂.
5. We still use how much coal?
Worldwide, about 41% of electricity still comes from burning coal and oil. (You can see this and more stats on the “power mix” by clicking here and selecting “energy supply” and “electricity generation by source.”)
Does that sound like shockingly a lot to you? It does to me.
Another 23% of power is from natural gas, which is definitely better than coal – but it’s still a fossil fuel, so it still emits CO₂. But much less. A gas power plant emits half as much CO₂ as even the newest, most efficient coal power plant. (I know this because I worked with a bunch of energy economics geeks for a year after grad school, dealing with these stats every day in a lot more detail. If you want to see a chart they made of the emissions differences, here it is.)
Only about 10% of global electricity is from renewables (mostly wind farms and solar panels). This has improved a lot just in my lifetime! But looking at how much coal we still burn shows how much we still need to improve. Nuclear is another 10% and hydroelectric dams another 16% or so. None of these are perfect in every way, but all are indisputably better than coal.
6. Which is cleaner – gas or diesel?
It depends on which kind of pollution you prefer: Pollution that kills you now or pollution that kills you later.
Basically, gasoline emits less nasty air pollutants per mile driven (so we have cleaner city air) but more CO₂. (CO₂ is a kind of pollutant that causes climate change – AKA pollution that kills you later.)
To drive the same mile, diesel emits less CO₂, but more toxic stuff that you don’t want in your lungs (pollution that kills you now).
The toxic stuff, more specifically: PM (fine particulate matter – tiny pieces of stuff that cause cancer) and NOₓ (nitrogen oxides, which damage our respiratory systems, and which Volkswagen lied to the world about for years. VW rigged vehicles’ test systems to make engines appear legal, while they actually released 40 times more NOₓ than allowed. Other companies also cheated, but none to the same degree.)
There’s an easy-to-read, short but more detailed description of the technical differences between gas and diesel emissions here. For more on Volkswagen’s scam, there’s the first episode of Netflix’s one-hour documentary series called Dirty Money.
Since there’s really no good answer, it’s probably better to switch to electric cars, and transition the entire world’s electricity production away from burning stuff – whether it’s coal, oil, natural gas, or garbage.
7. Should I buy an electric car?
If you buy a new Tesla to replace a car that still runs, you’re only considering the use phase of a car’s lifecycle, but ignoring everything that goes into producing a brand new car. Driving your Tesla will be cleaner than driving an old gas-guzzler, but overall it’s probably better to just not replace things that still work.
The simple answer:
If it ain’t broke, don’t replace it. Replacing something that still works is just another form of wastefulness.
The complicated answer is what I learned from my endlessly frustrating Life-Cycle Assessment class. A life-cycle assessment is a way to figure out all of the environmental impacts of something, whether it’s a product (like a T-shirt) or a service (like a flight). First you list every stage of that something’s production and existence (raw materials, transportation to the factory, production, packaging, transportation to the consumer, use by the person who buys it, disposal, and probably a few others that I forgot). Then you use a computer program to figure out where the most pollution and/or waste happens.
Don’t get me wrong – this was one of my favorite classes. But it was frustrating because it made clear how, in lots of cases, figuring out where the negative impacts come from and how to minimize them is endlessly complicated.
The answers from the computer are often not satisfying at all:
For example: Where in the lifecycle of a bottle of shampoo are the most resources consumed? What do you think? I thought transportation – shipping all that heavy liquid around the world. Right? Or adding another plastic bottle to the pile of plastic that has to be dealt with in some way.
But no. The worst thing about shampoo is using the shampoo. Apparently the shampoo companies have the supply chain, production, and transportation so optimized that treating and heating the water we wash down the drain in our long showers is actually the worst part.
To me, that just doesn’t feel like it answers the question. No matter what the computer program says, it is clearly better to use shampoo in a bar that doesn’t require a plastic bottle because we need to get off plastic. And just because heating water is the worst part doesn’t mean shipping shampoo around the world is something we should be okay with.
So my answer is this:
In the end, this class made me see that the best choice is just to consume less. Of everything. Less stuff is better. If something still works, maintain it well and keep it in use. Buying used is always greener than buying new.
Should you buy an electric car? Ideally, every time a car needs to be replaced, we should replace it with an electric one. But only replace your car if you need a new car anyway. Buying unnecessary things isn’t a very efficient way to become more sustainable.
(This is also what I learned from the beginning of my sustainability education – being cheap. More on that coming soon.)
8. Not all electricity is created equal… yet.
A global “energy transition” is happening. A big part of that is building power plants to produce electricity without crapping out greenhouse gasses.
Around the world, 300 times more electricity was produced by wind in 2017 than in 1990. For solar, it’s 600 times more. This sounds great! Such fast change! But we need to push harder. Remember, 40% of our electricity is still the dirtiest kind we know how to make.
Another aspect of the energy transition is switching everything (from building heating systems, to cookstoves, to public busses and private cars) to electric power.
The source of the electricity is a factor in the EV vs Regular Car decision, just like in all of these other transitions, but here’s how I see that:
Yes, driving an electric car pollutes less than driving a gas or diesel car. (Remember the entire life cycle.) But there’s pollution at the source of the electricity if your utility company is still burning coal to power your EV.
No, a coal-powered electric car is not perfect. But we can’t let that be the end of the conversation. We can’t wait for all electricity to be green before switching to electric cars, just like we can’t wait for all cars to be electric before switching to renewable electricity.
(I once gently argued with the founder of Lonely Planet about this concept at a conference. That story is coming soon.)
9. New leadership is emerging. The world is changing fast.
I had a charming Belgian professor who said, “If the climate will be saved and the planet will be saved, it will be thanks to the Chinese.”
Yes, China produces a terrifying amount of CO₂ and their energy demand is skyrocketing in a way that is literally off the charts. But China is also the world’s biggest producer of renewable energy. They installed four times as much renewable energy capacity in the last five years as the US did, and twice as much as Europe.
A lot of their CO₂ is from using outdated technologies like coal to heat buildings and produce electricity, but some is from producing all the stuff we buy from them.
When production of consumer good moved from the East coast of the US to East Asia, air pollution got better on the East Coast, but got worse on the West Coast of the US, because the pollution floats right across the ocean from Asia back to the US.
So again, the best thing is probably just to buy less stuff.
10. The biggest challenge (and $ opportunity) for renewables is how to store them.
Solar panels and windmills are great, until the sun has gone down and the wind isn’t blowing, but people still want electricity. That’s why coal has been so successful: it’s a dependable backup. You can burn it anytime of the day or night and know it will deliver.
If you have an idea for a battery that doesn’t cost a fortune to produce and doesn’t rely on rare earth metals like cobalt and lithium that are causing violence in the Congo, then you have a bazillion dollar idea.
Besides regular batteries, there are lots of promising new ways to store electricity, including salt batteries and pumped energy storage. But we need some innovation to scale them up to the point where we can store enough power to get through any crazy weather event, or even a normal dark night.
11. The Duck Curve.
I feel like half of my degree was “the duck curve.”
It’s the name for the graph of the electricity demand at every hour throughout the day, and it’s vaguely the shape of the profile of a duck.
It’s also the reason for my point above about batteries: Electricity demand gets higher right when renewables stop producing. That is, when people get home from work and want to cook dinner, do laundry and take a shower at the same time, when there’s no sunshine or wind to power those things.
That’s also why you probably have demand pricing on your power bill – higher electricity rates at peak use times.
12. Education fixes everything.
I don’t know whether my non-journalist classmates would put this on their lists, but I kept hearing the same thing from every professor: Education and consumer awareness are already changing the game.
Do you think our friend Larry from BlackRock (point #1) decided he wouldn’t give money to dirty companies just because he’s a nice guy? No. He did it because consumers are asking for sustainability and pushing industries to change. He just wanted to be ahead of the curve. (I assume. Let me know if I’m wrong, Larry!)
It’s happening across industries.
In my Energy Economics classes, the trend of people getting woke was called “consumer activation.” It means we’re starting to pay attention – even to the point of actually reading our electricity bills and asking our utility companies for renewables energy (which you can do, as I mentioned in #3).
13. Environmentally friendly is now business friendly.
Let’s look at a few things we know:
- Consumer awareness of the link between business and environment is increasing.
- Investors (and individuals) are beginning to move money away from oil companies.
- Climate change is expensive for all of us. As in it’ll cost 10% of the US economy by the time I die of old age.
- Polluting and wasting resources are expensive for companies. (So is providing healthcare for employees who are sick because of pollution. Bad air now kills at least as many people as tobacco.)
- Companies are smart, and they usually have someone who’s good at math. Organics, eco-friendly products and green investing used to be niche, and not necessarily profitable. But that’s just not true anymore.
14. Fixing Climate Change Fixes A Lot of Other Problems...
My degree wasn’t only about climate change and energy. I learned about other kinds of air pollution and water pollution, waste management and recycling, labor rights and inequality.
But fixing climate change is also good for all the other problems. A couple of examples:
Driving and flying less not only means fewer greenhouse gasses, but also less particle matter and other pollutants emitted (cleaner air to breathe).
Eating less meat means clearing fewer forests. Less deforestation means less climate change, but also more species preservation and keeping the Amazon rainforest intact.
Eating seasonal, organic food from local farms means less fossil fuels burned to transport our food, but also less water pollution from fertilizer and pesticides, and more diversified, decentralized and stronger local economies. Not to mention healthier food in our bodies. (Here’s the Italian method for all of that.)
This interconnectedness is great because it simplifies everything. If working on climate change also fixes other problems, let’s just work on climate change! Yay, easy! But… there’s always a but.
15. … But climate change is hard to fix because it has so many causes.
The bad part about this interconnectedness is that it makes climate change more complex to solve.
Remember the hole in the ozone layer? That problem went away on its own, so this climate problem probably will too, right?
Not so much. Not only was the ozone problem was a simpler one, but it didn’t go away on its own.
The hole in the ozone layer (which still exists) was caused by fewer pollutants coming from more limited sources. (Mostly CFCs, mostly used in refrigerators, AC, spray deodorant and whipped cream cans. Basically.) That’s a relatively narrow scope to regulate. And here’s the other thing: WE DID REGULATE IT.
Banning CFCs is considered the most successful international environmental treaty ever. If we had done nothing, NASA says the ozone depletion would have gotten so bad that by 2050 it would have taken just 10 minutes to get a sunburn in New York City. (Probably five minutes for me.) The world agreed there was a problem, and agreed to fix it together.
CFCs are also one of the six categories of greenhouse gasses, so stopping ozone depletion also slows climate change. (The interconnectedness is actually helping this time.) At least we know we’re able to put a lid on one of them.
But then there are the other five categories. So far, we haven’t done as well with those. Carbon dioxide is the most famous (because it’s the most common, and it stays in the atmosphere longer than anything except CFCs).
I won’t go into where the other GHGs come from more than I already have. But to understand the scale of the problem, think of it this way: To fix the ozone layer we had to stop using a few ingredients in refrigeration, switch to roll-on deodorant, and make our own whipped cream. (Basically.) To fix climate change, we have to change the way we eat, shop, commute, travel, invest, heat and cool our houses… We have to sort of change everything.
16. Should we just give up now?
Probably not. But there were a lot of moments throughout this program when I thought, “We’re fucked.”
It’s easy to think so. This mess is complex.
But I swear, that’s not how I felt at the end of it, and it’s not how I feel now. Because we already have the solutions.
Of course we also need big institutional changes – regulations and incentives and politicians who want to do more than die rich. But what people can already do, without asking for anyone’s permission or sending letters to any politicians, is massive.
Remember: The majority of our problems come from the first things we do when we get up in the morning: food and drink, housing, and private transportation. Choices matter.
We’re not powerless while we’re waiting for politicians to act. Consuming, buying, eating, storing, and throwing away less stuff makes a difference. Less meat, less air-conditioning, fewer miles in the car and (guilty) in airplanes.
I don’t think this means giving up everything fun and comfortable in life.
It means being smarter about these things. And, yes, it means putting in some effort and reconsidering some things: Is a bigger car, with its bigger gas bill and bigger pain to park, really a luxury?
Do we enjoy and feel good eating meat every day, or are we just in the habit of it?
Is it really more convenient to take a one- or two-hour flight instead of the train? (Sadly, in the US, it often is.)
Is it even comfortable to keep our homes at sweater-weather in the summer and T-shirt-weather in the winter?
None of these questions demands a life-altering change. So let’s stop saying it doesn’t matter what we do because we’re just individuals. It’s simply not true.
Maybe most of these things are obvious. Are they? You tell me. I think a lot of them become obvious once you know them. And sustainability advocates probably don’t spend enough time demystifying them for people who haven’t spent a year (or a way longer) studying sustainability.