Environmental Policy Brief Assignment

The Ripple Effect of Environmental Policy

I think it helps to give a little bit of a sense of my own personal background to explain where my research comes from. Before coming to Wharton, I spent ten years as a federal prosecutor in New York. I was an Assistant United States Attorney for the Southern District of New York. And in that capacity, I participated in kind of traditional law enforcement, particularly with respect to environmental laws. And so the traditional model of environmental law is that Congress passes a law and the government enforces it against business firms which are the polluters, right? So that's kind of the traditional understanding of what environmental law is. My research, what I tried to do is I kinda flip that around. So I ask, what if the government is not the regulator, but instead private firms are regulators? And what if the government is not the regulator, but instead as a polluter? So my research kinda falls into two categories right now. The first is exploring the role of the government as a polluter. And the second is exploring the role of business firms as sources of environmental standards. The side of my research that focuses on the government as polluter, I think one of the key takeaways is that the military does not always stand opposed to the idea of environmental protection. There are kind of two narratives about the role that the military plays in society with respect to the environment. One is that the environment and national security stand opposed to one another and that the environment needs to bend if national security is at issue. But what I suggested my research in a paper called The military environmental complex is that right now because the military is the nation's largest consumer of fossil fuels. And because many thousands of soldiers have died guarding fuel convoys in recent conflicts in Iraq and Afghanistan, the military has this tremendous internal incentive to reduce its fossil fuel use and replace it with renewables. And so is investing heavily in that right now. And so that sort of turns the traditional narrative on its head and suggests that the military actually has a very important role to play in supporting the development of clean and renewable energy technology. So on the other side of my research, which focuses on the idea that business firms can be a source of environmental standards. I think that fact in and of itself is surprising. When you study environmental law in a traditional law school environment. The focus tends to be on the laws that Congress passes and business firms as polluters and the targets of government regulation. But what you see in this environment here in the Business School, and I think that is of great interest, is that business firms can themselves be sources of environmental standards. So for example, if Walmart imposes requirements on its supply chain, that suppliers need to disclose their greenhouse gas emissions in order to have contracts with Walmart. That in and of itself is an environmental standard. Similarly, non-profit organizations like the Marine Stewardship Council or the Forest Stewardship Council, create certification programs whereby you can certify a fishery or fish catching or forest timber practices as sustainable. And in order to warrant the label, the certification, the business needs to comply with certain rules which are then audited by third parties. Those are themselves environmental governance, although maybe not in the most traditional sense. And so I think it can be eye-opening for people to understand that certain forms of corporate environmental, social responsibility are actually that they have broader implications than just for the firms themselves. So I think the most surprising conclusion has come in connection with some empirical work that I've been doing with colleagues here at Wharton to test the hypothesis that I put out in an article called valuing national security. So in the article called the military environmental complex, I suggest that the military is playing an important role in stimulating innovation in technological advancement in the clean energy arena in valuing national security, I suggest that the military, by focusing on renewable energy development and reducing its fossil fuel use, actually has the potential to affect policy debate and individual behavior in the kind of climate change arena. The mere fact that the Department of Defense is using solar panels has the potential to drive individuals to want to use solar panels. At least that's the hypothesis. So I've been working with colleagues here at Wharton to test this hypothesis empirically. And just a few days ago, we received some preliminary test results. We suspected that the difference would be among conservative survey participants, people who generally don't tend to favor environmental protection, but do tend to value the role of the military in society. What we found was actually that People who self-identify as liberal were more likely to want to purchase renewable energy from their utility when they learned that the Department of Defense was actively using renewable energy technology, the sample size wasn't large enough for conservative, so we don't know yet what the result is on that front, but we plan to follow up with additional testing. There are really three practical implications of my research at this point. The first is that I think we need to be thinking much more broadly. Scholars and regulators need to be much more broadly about what constitutes environmental law and environmental governance. It is not simply laws passed by Congress or regulations passed by EPA. It includes private environmental governance, that is, actions by firms and non-governmental organizations to set environmental standards. So I think that's really the first implication. The second implication relates to the work that I'm doing on valuing national security. That is, I think it's extremely important to recognize that if we want to change individual behaviors in the climate change context, that we need to think broadly about how to frame climate change. We shouldn't simply be framing climate change as an environmental issue. It needs to be framed as a national security issue as well. The third implication is very specific. One of the reasons why the military has been able to leverage its purchasing power to stimulate the development of renewable energy technologies is because Congress gave it a particular statutory authority. That statutory authority allows it to enter into what are called power purchase agreements, whereby the military purchases power from an energy generating entity. And so the military is able to enter into power purchase agreements for 30 years, which is necessary in order to allow the entity that that builds the generating facility on military land to recoup its initial investment. You can't do renewables on a very short timeframe because the upfront costs tend to be high. Other government agencies are limited to ten-year power purchasing agreements. So I make a very specific recommendation in the military environmental complex that Congress should consider lengthening the term for other government agencies as well, such that they could enter into these long-term 30-year power purchase agreements because I think that that would allow them to stimulate the development of renewable energy technology as well. Obviously, my research focuses on environmental governance, but the point is broader and I think it's important to recognize that the idea that private governance is not limited just to the environmental arena. Private governance exists in firms where they're setting labor standards for their suppliers and in their supply chains. There are also private financial standards. Recently two candidates for higher office entered into a contract whereby they agreed to certain campaign finance rules. So rather than relying on Congress to set campaign finance rules to candidates privately agreed that they would not accept certain money or not spend more than certain amounts. So the phenomenon of private governance actually extends quite broadly. And I think it's important to recognize that the news is full of stories recently about the impact of climate change. The Intergovernmental Panel on Climate Change has been releasing various working group reports which demonstrate that climate change is happening, that climate change is anthropogenic, and that the consequences of climate change may be dire for society. In addition, a group of 16 retired generals from the military recently last month, I believe, put out a report saying that climate changes is posing a national security threat and that climate change act as a threat multiplier that destabilizes countries that has the potential to increase conflict, to create climate refugees and other situations in which the US military is going to be called upon to address these conflicts. So I think the idea that climate change is a national security issue is certainly in the news. What sets my research apart in part comes from where I'm situated in what my background is. Most lawyers who decided to become professors go on to teach in law schools. But I chose to come to a business school. Obviously, my research is very connected to the idea of the role that business plays in society. So I think what sets my research apart in part is the fact that I'm kind of bridging these two worlds and try and have a conversation not only with other legal scholars, but also with business and management scholars. I'm following up on this research and a number of different ways with respect to valuing national security. I am currently working with colleagues here at Wharton to empirically test the hypothesis. So we're going to be following up additional studies in which we frame climate change as a national security issue or demonstrate military leadership with respect to renewable energy use to see what impact that has on individual behaviors and beliefs and attitudes toward climate policy and reducing fossil fuel use. I'm also working with some colleagues here at Wharton on an empirical study to understand how business firms talk about climate change in their Securities and Exchange Commission disclosures? Do they talk about it as an issue of strategic advantage? Do they talk about it as an issue of environmental protection and morality? Do they talk about it as an issue of national security? And in particular, four major military contractors, How did they talk about climate change? And to the extent that the ways in which they've talked about climate change over time have changed what can account for the change. So those are some empirical projects that I'm working on with colleagues here at Wharton. I'm also continuing to do my own work on more kind of normative theories of private environmental governance to try to argue about how it fits into larger views of what constitutes environmental law.