Q&A: Environmentally Sustainable Growth
In his new book, Environmentally Sustainable Growth: A Pragmatic Approach, Professor Steven Cohen offers a positive vision of an environmentally sustainable future and outlines realistic paths toward a renewable resource-based economy.
One of Columbia SIPA’s longest serving faculty members, Cohen is a professor in the practice of public affairs and director of the MPA Program in Environmental Science and Policy. In December 2018 he became senior vice dean of Columbia’s School of Professional Studies, where he directs the MS in Sustainability Management.
In this SIPA News Q&A, Cohen discusses the impact of globalization on policy regulation, how the government can influence consumers’ and producers’ behavior to achieve a more environmentally beneficial economy, and more.
What inspired you to write this book now?
I wanted to make it clear that the transition to an environmentally sustainable economy was an important goal. We are not going to solve the climate problem, but we are going to make it less bad and hopefully we will adapt to the warmer world we unfortunately will be living in.
How do we solve political polarization around the climate crisis?
When trying to solve polarization we have to think about what we have in common. The environment makes it easy because we are all biological creatures. Nobody wants to be poisoned. We need to look for those areas of common ground and build on them.
How do we get the Global North to care about the climate impact its policies are having in the developing world?
The developing world needs to protect itself from these impacts, but they're not going to protect themselves by hoping that somehow the developed world is going to pay for it. They need to have other solutions. Part of what has happened historically when we think about foreign aid is that it is dwarfed by remittances of people who emigrate from one country to another, generate surplus wealth, and send some of it home. That's one way that capital formation takes place, and that has been taking place in the developing world.
How do you see globalization playing a role in environmental sustainability?
Overall, humanity has benefited from technologies because they affect economic life, which affects culture. Our economy is based more and more on services and creativity and less on manual labor and manufacturing. So if you think about environmental sustainability, part of the answer to this is to not assume globalization is going to go away, but to learn how to assure sustainability throughout supply chains.
How can policy regulation impact businesses?
One of the things that regulation does is that it provides incentives for innovation. We are now requiring large buildings in New York to be more energy efficient and to eventually get off fossil fuels. That is spurring the development of alternative energy technologies. And regulation doesn't just impact companies, it’s costs and benefits are felt throughout society. The [U.S. Office of Management and Budget] has been looking at the cost and benefits of air pollution regulations for 50 years; for every dollar you put into air pollution control, you get a $15 benefit. So the creation of a cleaner environment provides benefits that are worth the costs.
How do we influence the behavior of corporations and individuals to be more environmentally beneficial?
The government has a role to play. The role is not to assume that you are going to turn companies into good actors. You have to require them to be good actors. Companies report finances honestly because they have no choice. They're honest because in order to raise capital in the public market place they must adhere to the financial reporting rules required by the Security and Exchange Commision. This reporting requirement will soon include indicators of environmental risk. Both the SEC and the European Union are in the process of issuing carbon and environmental risk disclosure requierments. Now companies will need to share honest and accurate financial and environmental performance reports.
What is the government doing to get companies to be more honest in this sector?
The government requires quarterly financial reports by publicly traded companies who want to maintain access to the stock market to raise capital. In the next month or so the SEC will begin requiring a carbon and environmental risk disclosure report on a quarterly basis. This specific government reporting requirement is going to dictate what companies report and how to measure climate risk. Currently many companies issue voluntary ESG reports and the sustainability metrics used are far from uniform. The SEC rule will move us closer to uniform sustainability metrics.
What is the main takeaway you want people to get out of your book?
We are on the path to address the climate crisis and we are moving in the direction of an environmentally sustainable economy. The cost of economic development that doesn’t pay attention to the planet's well-being is becoming higher, so we will begin to transition to a circular economy. I believe that eventually, instead of mining minerals from the ground, we are going to mine from our waste stream because it will be cheaper to do that than to mine from the ground. Government, companies, and communities are paying much more attention to environmental sustainability, diversity, equity and inclusion and social justice. Despite our current political problems, these large scale cultural and social changes give us a reason to believe we can successfully transition to an environmentally sustainable economy.
This interview, by Giulia Campos MIA ’24, has been condensed and edited for clarity.