In a Greening World, Smog No Longer Means Profit


Imagine that, as a business, you had to pay a service tax for every ecosystem you disrupted. In this hypothetical situation, all the money taken for this tax would be used to increase the productivity of the unsettled ecosystem, effectively creating a sustainable economic practice. While this seems like an awful burden for any business, our Earth provides innumerable amenities free of charge. From providing clean air to breathe to fertile soil for growing sustenance, high profit depends on high ecosystem productivity. But how much are these free services worth? Robert Costanza, an ecological economist, and his team tried to tackle this hypothetical, placing the number at around $33 trillion. That is roughly a third of today’s global Gross National Product (GNP).

As industrialized nations work to clean up their mess, China—the world’s biggest polluter—has only recently begun cleaning up its ecological nightmare. In terms of Air Quality Index (AQI), measured in parts per million, Chinese cities are permanently above what the World Health Organization considers healthy. In response, Chinese policymakers have finally created an initiative to reduce emissions. How bad did the AQI have to get before an initiative was created? This January, Beijing had a record-breaking AQI of 755. New York, by comparison, usually scores in the mid-to-upper 30s, a world of difference from Beijing’s 755.

Though China’s GNP is increasing, a study done by MIT found that air pollution cost the Chinese economy $112 billion in 2005 alone. Why? When smog—fog combined with smoke and other atmospheric pollutants—becomes too dangerous for public transportation to run, some major Chinese cities have to shut down, effectively halting factory work until the smog clears.

Not only do air pollutants in Chinese cities affect other regions in the country, easterly winds often blow higher atmospheric pollutants right across the Pacific Ocean to California. Commonly referred to as a commons, our atmosphere is shared by the rich, the poor, the powerful and the weak. What one country does to the air becomes a problem in another. So when China spews billions of tons of carbon dioxide into the atmosphere, a global concern arises.

China is not the only country so heavily invested in coal. Surprisingly, universities all over the United States put their money into stocks of fossil fuel companies because they consider it a safe investment. However, a local CUNY program is trying to change the scene.

CUNY Divest is trying to persuade the CUNY Board of Trustees to halt all investments in fossil fuels permanently. Furthermore, the program is also working towards the complete withdrawal of the top 200 dirty investments, replacing a good number of them with renewable alternatives in the market as well as green infrastructure here at CUNY.

Whether it is the United Nations, 350.org, Greenpeace or any other activism campaign, no one seems to be able to convince most major corporations that green can also mean profit. Can a company actually profit from being green?

According to the World Wildlife Fund and the CDP, a company’s return on investment (ROI) after participating in green initiatives can reach up to 233 percent. This number is not fluff; there are plenty of examples of businesses that have reduced carbon emissions while also increasing profits. According to The Guardian, “DuPont, one of the early adopters, committed itself to a 65 percent reduction in greenhouse gas emissions in the 10 years prior to 2010. By 2007, DuPont was saving $2.2 billion a year through energy efficiency, the same as its total declared profits that year.”

A study commissioned by the World Wildlife Fund also found that, “79 percent of U.S. companies in the S&P 500 reporting to CDP earn more on average from investments aimed at reducing carbon emissions than on their overall capital expenditures.” How does a company actually reduce emissions? It’s the small stuff. The easiest way to save money while reducing carbon emissions is to invest in LED lighting, which uses 7 percent of the energy incandescent bulbs use.

Companies can also utilize what’s known as source reduction to reduce packaging, carbon emissions and shipping costs. Perhaps the most successful electronics companies in the world, Apple, is also a leading environmental producer. According to Apple, “The packaging for the iPhone 5 is 28 percent smaller than the packaging for the original iPhone shipped in 2007. That means that up to 60 percent more iPhone 5 boxes fit in each shipping pallet and fewer boats and planes are used.” Apple also uses a marketing trick to advertise its green practices to increase revenue. With a market cap of $415.7 billion, Apple makes it clear that being green certainly pays off.