It all started with a Fin 1 case on acid rains. The case explained how Southern Company, a coal power plant operator acquired sulfur dioxide (So2) allowances to offset its polluting emissions. Inspired by the story, NI decided to apply the same market mechanisms to offset its emissions of CO2, one of the main greenhouse gases (gases responsible for global warming).
Although there is no regulation on CO2 emissions in the US, the Chicago Climate Exchange (CCX) already trades CO2 emission permits, and companies (such as Ford, Motorola, and IBM), universities (including Tufts and the University of Iowa), and cities (like Chicago) are already members. CCX members receive a quota of CO2 credits based on their past emissions, and voluntarily agree to decrease their emanations by 1% a year. If members manage to exceed the required decrease, they can sell their extra credits to companies that did not meet their reduction objective. As a consequence, the overall CO2 emissions of CCX members go down by at least 1% a year.
In Europe, Japan and Canada, this cap and trade system has come into law, following the ratification of the Kyoto Treaty. In the US, Senators Lieberman (D) and McCain (R) are working on bipartisan legislation that would create a similar cap and trade system.
Individuals emit CO2 mostly through transportation (automobiles, motorcycles, airplanes…), and electricity usage (fossil-fuel burning power plant). On average, US citizens generate about 20 tons of CO2 per year. If you are interested in calculating your own CO2 emissions, you can do it at //safeclimate.net/calculator/.
At the beginning of the semester, two NI students, Bret Connor and Lionel Bony, organized a presentation to their section on CO2 and Climate Change (presentation available at www.sectioni.com/CarbonNeutrality.ppt) and obtained commitment from students willing to offset their emissions. Last week, they secured corporate sponsorship from The American Electric Power Company (www.aep.com), one of the largest electric utilities in the United States (75% coal-fired capacity), to match the funding they had committed as a section. AEP’s CEO himself approved this donation and was extremely excited about the idea.
Overall, NI will more than offset the 2004 CO2 emissions of its students. Once the CO2 credits are bought and retired from the CCX, NI will officially become carbon neutral, meaning that its contribution to global warming will be null.
By buying carbon credits to offset their emissions, students of NI are showing their commitment to environmental responsibility and leadership, and their support for market-based approaches to solving environmental problems.
If you too want to do something about your CO2 emissions, you can start by reducing them (see chart). If you are interested in becoming carbon neutral, contact Lionel Bony at lbony@mba2006.hbs.edu.
Source://www.undoit.org/graphics/undoit_steps.pdf
