Q&A: A Law Professor Studies How Business is Making Climate Progress Where Government is Failing

Michael Vandenbergh says the marketplace is cutting emissions and reaching people skeptical of climate action, but can’t make up for a lack of political leadership.

Sep 4, 2020
 Michael Vandenbergh

Photo Courtesy of Michael Vandenbergh

For more than a decade, Michael Vandenbergh has studied the growing role private businesses are playing in the effort to tackle climate change as public interest in the issue surges.

Despite the unprecedented coronavirus pandemic and the economic devastation that came with it, curbing climate change remains a top priority for Americans, with the issue likely to play a vital role in this year's election, one recent survey found.

That public concern—combined with what many see as a slow and inadequate response from governments—is a major reason why more and more businesses are taking steps to address their own role in the climate crisis and offering solutions to help mitigate its impacts, said Vandenbergh, the director of Vanderbilt Law School's Climate Change Research Network.

Under the Trump administration, officials in charge of federal action to address climate change have not only hit the pause button, but in many cases, moved in reverse. President Trump announced the withdrawal of the U.S. from the Paris climate accord in 2017, a process that will be completed on the day after the coming November elections. His administration is responsible for scaling back or eliminating over 150 environmental protection measures, including those that seek to reduce greenhouse gas emissions. 

But those moves are likely having an inverse effect on the private sector, researchers like Vandenbergh say. Since January, some of the world's biggest companies—including Microsoft, Starbucks and Nike—have pledged to reach net-zero carbon emissions by mid-century. And pressure from investors to address global warming is also driving the finance industry to move away from fossil fuels and improve its transparency.

In his 2017 book, "Beyond Politics: The Private Governance Response to Climate Change," Vandenbergh argues that the private sector has a significant role to play in the world's response to the climate crisis, and that businesses could reduce greenhouse gas emissions by a billion tons a year over the next decade.

With the presidential election just two months away, we spoke with the Tennessee law professor about the benefits—and limitations—the private sector brings to the fight against global warming. Businesses, he said, may already be helping to change some minds in areas where addressing the issue has typically been met with scorn.

This conversation has been lightly edited for clarity.

You've dedicated more than a decade to researching this topic, which now has become a major talking point for politicians and companies alike. What have you learned from your work? What are some of the key takeaways you've gathered from it?

The first key takeaway is that we need to be very realistic about whether government can act as quickly and as aggressively as it needs to act. It's important to remember that we started working on a BTU tax, which is a form of carbon tax, in 1993—'94. We still don't have something like that today.

So my work is founded on the idea that we need to take a very aggressive approach to climate change. But we can't be naïve to government offering us a panacea. We have to push for government change, but also push for all the other tools that we can use to get rapid and substantial emissions reductions.

Ultimately, your work has shown that there is a role for the private sector to play, and we're seeing some of that happening now.

That's right. Starting 15 years ago, I started documenting the extent to which companies, investors, lenders and others were motivated to reduce greenhouse gas emissions, even if they weren't doing so for what we might call benevolent reasons.

They simply had motivation to do so because their customers, either retail customers or corporate customers, were demanding it. They were profiting from efficiencies, which also reduced greenhouse gas emissions; their lenders were demanding disclosure of environmental risks; investors were seeking environmental, social and governance outcomes, not just profit outcomes; employees couldn't be recruited or retained without addressing environmental issues.

Underneath all this, I think that the principal thing to recognize is that, whether you're looking for government action, or private sector or household action, the question is: What are the preferences of the American population?

And study after study has shown that well over half of the U.S. population wants more aggressive environmental protection, wants to do something about climate change. But our constitutional design of our government does not allow for rapid change. And so, companies are responding in the marketplace to that same set of preferences. I think that's what's happening.

What we've seen in the last 15 years is massive growth in the amount of market driven pressure on companies to reduce emissions.

You wrote a book about this. The private sector appears to be stepping up its efforts at a time when people aren't satisfied with government action to curb climate change. What are some ways you're seeing the private sector stepping up to fill in those gaps?

An example of a recent one is the uptake of LED light bulbs has resulted in carbon emissions reductions in the U.S. of around 127 million metric tons in 2018. That's huge.

Was there some government role? Yes, the government adopted efficiency standards. But the real uptake occurred when Walmart announced it would make, as its house brand, LEDs if they were attractive and sold for less than $10 a bulb. And manufacturers stepped up to do that. Now many retailers are promoting inexpensive and attractive LEDs, and that started in roughly 2013.

Energy Efficient Lightbulb Push Tied to Declining Household Energy Use

The change is dramatic, that we have seen a leveling off, and a beginning of a reduction in household electricity use, per capita basis, in the United States.

Another example of large emissions reductions is the commitment to renewable power by major companies in the U.S. and around the world. These are particularly important because, in some cases, they're occurring in states that are not trying to reduce their greenhouse gas emissions.

In my state of Tennessee, Facebook and Google's requirement to provide renewable power for their new data centers is one of the largest drivers of the uptake of renewable power in this region. We estimated that new data centers recently built by Amazon in North Carolina, and by Amazon and Facebook in Virginia, have totaled more than 750 megawatts of capacity and have reduced greenhouse gas emissions by close to 400,000 megatons.

So, in some ways, the private sector has helped spur climate action in areas where there's political resistance to those kinds of efforts?

People underestimate the incredible importance of worldview or ideology or identity on climate beliefs and policy support. We can't look at the population as being a homogenous group. We have to see it as different subgroups with different worldviews. And much of the pressure for a Green New Deal or a carbon tax is resisted by people who have a more conservative worldview, who fear big government more than they fear climate change.

One of the great advantages of private sector response to climate change is it can provide a way for that part of the population to participate in climate mitigation and to get comfortable believing that climate mitigation is an important action.

Walmart has to be the best example of that. Walmart is one of the largest installers of solar panels or buyers of solar power in the country, has made massive emissions reductions and has committed to a billion tons of carbon emissions reductions in its supply chain by 2030, with oversight by environmental advocacy groups.

There's an example of a company that is not typically thought of as being a liberal company in terms of its management, but that is taking steps to address the climate problem directly. When I speak to conservative audiences telling them what Walmart has done, it's a very valuable way to open the door to having a conversation about why climate change is important and what can be done about it. Because it's not easy to dismiss what Walmart is doing if you have a conservative mindset.

In your work, you also argue that the private sector could reduce greenhouse gas emissions by a billion tons a year over the next decade. But it's difficult to imagine just how much that is. Is that a significant amount?

That is the equivalent of a country the size of Germany or Japan, the sixth or seventh largest emitters in the world, going carbon neutral. So, a billion tons is equal to the total national emissions of roughly the sixth or seventh largest country in the world, depending on how you run the calculations. It's a very significant number.

These all seem like very positive developments. Does that mean we should worry less about what our government is doing since market forces seem to be prompting more action?

Absolutely not. And I think it would be a major mistake to view this area as a reason not to worry about the government. The private sector can produce major emissions reductions, but we are learning about the urgency and the importance of this problem every day.

The need for government action is greater than it ever has been. And I'm only hoping that the private sector can buy us a little time.

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