We all know that reducing carbon emissions is essential to curb climate change. This huge challenge requires all parts of society to work together to help save the planet, from individuals to governments, and everything in-between. A number of U.S. corporations have voluntarily utilized internal carbon pricing to tilt their capital investment decisions away from high carbon emissions projects toward low carbon emission alternatives.  CU Denver Business School professors John Byrd and Elizabeth Cooperman examined whether a sample of 52 major U.S. companies utilizing internal carbon pricing (as reported to the CDP– formerly the Carbon Disclosure Project) show a significantly larger reduction in their industry-adjusted carbon emission intensity ratios over 2011 to 2016 versus other non-carbon pricing corporations.

This research is important given the need for a reduction in carbon emissions to avoid serious climate change impacts.  It also shows that carbon pricing can be an effective tool for addressing climate change. The study’s results provide some preliminary evidence that internal carbon pricing is associated with carbon emission reductions at least for one carbon intensity measure, with results subject to the short period of time that many U.S. companies have applied internal carbon pricing and the range of ways it is being applied.

The CU Denver Business School has focused on sustainability for more than 11 years, and is home to the Managing for Sustainability (M4S) program, which is widely respected for its quality, distinguished faculty, and its prominent advisory board including sustainability leaders across different industries and for-profit and non-profit sectors. The advisory board includes sustainability representatives from businesses including B Lab Colorado, the City of Denver, CBRE, DaVita, Prologis, AT&T, and Xcel Energy, among many others.

Faculty in the program are conducting research on important current issues including an ongoing joint advisory board member/faculty project on the effect of the U.S./ China Trade War on sustainability industry sectors, among others.

Professors Byrd and Cooperman presented their paper “Internal Corporate Carbon Pricing: An Analysis of Carbon Emission Reductions for U.S. Companies” at the world’s first International Conference on Carbon Pricing in February 2019 in New Delhi, India. Professor Cooperman also presented the paper, which has been accepted as a World Bank research paper, in Paris in May of 2019 at the IPAG Business School’s International Symposium on Energy and Finance Issues. This research examines a growing trend among corporations to use internal carbon pricing to provide justification in prioritizing energy efficiency at all levels of an organization and tilting a corporation’s long-term capital investments towards low carbon emitting, energy-saving equipment, and machinery, and the use of cleaner forms of energy.  Microsoft, for instance uses both internal carbon pricing and a carbon fee model that encourages business groups to engage in activities that reduce the carbon footprint of their operations, instilling cultural values of innovation and efficiency throughout the corporation.

John Byrd notes “We are showing that companies are doing a lot with sustainability. The next step is to show more how it benefits companies economically as well. We would like to make a powerful argument that all companies should be paying attention to actually reducing their carbon footprints and greenhouse emissions, and that their actions are actually making a difference in terms of reducing their carbon emissions.”

“We have allowed companies to externalize costs, and they have profited. It’s great to have companies start to internalize and recognize the negative externalities associated with carbon emissions, by means of having carbon pricing, such as a carbon tax. I think the takeaway is that this is a way to internalize negative externalities produced by company operations that harm the environment and society, such as greenhouse emissions. We need to think broadly about how we deal with those external costs,” says Professor Byrd.

Sustainability is a signature area for CU Denver Business School, where both professors Byrd and Cooperman have worked since 1997. The chance to study with either professor is one that every student should jump at. Professor Byrd’s course on Business and Global Climate Change is one of very few such classes in the country.  It was just named one of 2019’s Ideas Worth Teaching award winning classes by the Aspen Institute. 

 Dr. Byrd, along with Professor Ken Bettenhausen PhD, have developed a free, open to the public four-course MOOC (Massive Open Online Course) on Coursera titled Become a Sustainable Business Change Agent.  It introduces business sustainability concepts worldwide and currently has over 4,500 students enrolled, that allows students to consider furthering their education by enrolling in the Managing for Sustainability program or certificate program.

“We have made a huge error by not making the sustainability argument a financial one. Not only is it the right thing to do, since sustainability is financially beneficial in the long-run, including providing long-term cost efficiencies for firms and opportunities for new sources of revenue.  Businesses need to have a longer view than this quarter’s earnings,” says Byrd.

Having such accomplished professors at CU Denver Business School is a great benefit to all students, and to the institution as a whole. As companies are increasingly expected to reduce their negative impact on the environment while remaining profitable, sustainability is beneficial for every company. The M4S program offers an MBA Specialization and Graduate Certificate in Managing for Sustainability.  There is truly something for all students in the M4S program, as companies move towards hiring more workers with an understanding of sustainability that can complement specializations in any area whether it is finance, marketing, management, operations, and other fields.

Print Friendly, PDF & Email
Print Friendly, PDF & Email

CU Denver

Business School

1475 Lawrence Street

Denver, CO 80202


CU in the City logo
%d bloggers like this: