How Have Companies Responded to the Coronavirus Pandemic and Climate Change?

We have just released the latest episode of our podcast, “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program.”  In this latest episode, I engage in a conversation with Rebecca Henderson, the John and Natty McArthur University Professor at Harvard University.  She shares her perspectives on how large organizations are changing in response to the coronavirus pandemic and global climate change.  A full transcript of our conversation is available here.

Rebecca makes her home at Harvard Business School, where she was the founding co-director with Professor Forest Reinhardt of the Business and Environment Initiative.  She is also a Research Fellow of the National Bureau of Economic Research, and a Faculty Fellow of the Harvard Environmental Economics Program.

In this podcast episode, we first discuss how the attention given to environmental matters has changed at business schools in the three decades since she received her Ph.D. in Business Economics at Harvard and joined the faculty at the MIT Sloan School of Management, prior to moving on to Harvard Business School.

Henderson’s research and writing explore how organizations respond to large-scale technological shifts, most recently in regard to energy and the environment.  This has also given her a special perspective to think about the role of the private sector in responding to the Covid-19 crisis.  In this regard, she notes that she is reminded that “when organizations decide they must change, they can change,” pointing to the quick shift to remote work across many sectors, the effort by biomedical firms to speed up supply changes, and the ways in which retail and grocery distribution channels are mobilizing their resources. “You’re seeing profound changes in methods of operation across the economy,” she remarks.

“The potential upside is that this emergency is making it very clear that the stability of the entire community is critical to the success of business,” Rebecca states. “I think the emergency is also highlighting that one needs a strong, effective federal government to deal with problems like this. I think both of those insights could conceivably translate into business pressure for coherent climate policy in ways that could be very helpful.”

“Climate change can seem distant; it can seem invisible. Why should I worry about it? To see the whole economy mobilized when the threat becomes very, very concrete reminds me that, as we think about climate change, we have to find a way to make that threat as concrete as possible. So that’s one thing I take away from the current moment.”

All of this and much more is found in the newest episode of “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program.” Listen to this latest discussion here, where, by the way, you can also find a complete transcript of our conversation.

My conversation with Rebecca Henderson is the ninth episode in the Environmental Insights series.  Previous episodes have featured conversations with:

“Environmental Insights” is hosted on SoundCloud, and is also available on iTunes, Pocket Casts, Spotify, and Stitcher.

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Interview with Nick Stern in Second Episode of “Environmental Insights”

The prominent U.K. economist Nicholas Stern, IG Patel Professor of Economics and Government and chair of the Grantham Research Institute on Climate Change and Environment at the London School of Economics, is featured in the second episode of our new podcast, “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program.”  You can listen to the interview with Professor Stern here.

In hosting these podcast episodes, I have the pleasure of interviewing interesting and accomplished people who are working at the intersection of economics and environmental policy.  Our first episode, which appeared last month, featured my interview with Gina McCarthy, former Administrator of the U.S. Environmental Protection Agency (who is leaving Harvard to become President of the Natural Resources Defense Council).

In this second episode, Nick Stern discusses his career, British politics, and efforts to combat climate change.

It was more than a decade ago that Nick – working on behalf of British Prime Minister Tony Blair and Chancellor of the Exchequer Gordon Brown – directed the landmark Stern Review on the Economics of Climate Change, published in 2006. In our interview, Nick notes that it was his appointment to that position that truly sparked his intense interest in the topic.

“I wasn’t a specialist before we began, but I went to the best scientists in the world and educated myself quickly from them. I did know something, of course, like any informed social scientist should about climate, but it hadn’t been a specialty.  And once you start thinking about this, you can’t stop. And I haven’t stopped since then.”

My interview with Stern is the second episode in the Environmental Insights series, with future episodes scheduled to appear once per month.  The podcast is hosted on SoundCloud, and also available on iTunes, Pocket Casts, Spotify, and Stitcher.

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Rex Tillerson is out as Secretary of State: What Should We Make of This?

Two hours ago, I received a “Breaking News Alert” from the New York Times“Secretary of State Rex Tillerson is out, after a rocky tenure. President Trump will replace him with Mike Pompeo, the director of the C.I.A.”  This came three months after the November 30, 2017 New York Times story, indicating that the Trump White House was planning to oust Rex Tillerson as Secretary of State, and replace him with Mike Pompeo, the Director of the Central Intelligence Agency (CIA) and former Republican member of the U.S. House of Representatives.  Need I mention that the President labeled that November story “fake news?”

What should we make of this change — particularly in regard to climate change policy?  To examine this question, I can draw on my December 3, 2017 blog essay, “If Tillerson Departs State Department, Will We Go from Bad to Worse?”  In fact, that takes us back even further … to a time that now seems long ago:  the beginning of the Trump administration.

Looking Backward for Some Perspective   

On January 3, 2017, two weeks before Inauguration Day, I posted an essay at this blog on “Trying to Remain Positive,” in which I searched for any remotely positive elements of the incoming Trump administration.  I wrote:

“Remarkably, the least worrisome development in regard to anticipated climate change policy may be the nomination of Rex Tillerson to become U.S. Secretary of State.  Two months ago it would have been inconceivable to me that I would write this about the CEO of Exxon-Mobil taking over the State Department (and hence the international dimensions of U.S. climate change policy).  But, think about the other likely candidates.  And unlike many of the other top nominees, Mr. Tillerson is at least an adult, and – in the past (before the election) – he had led his company to reverse course and recognize the scientific reality of human-induced climate change (unlike the President-elect), support the use of a carbon tax when and if the U.S. puts in place a meaningful national climate policy, and characterize the Paris Climate Agreement as “an important step forward by world governments in addressing the serious risks of climate change.”

It’s fair to say that it is little more than damning with faint praise to characterize this pending appointment as “the least worrisome development in regard to climate change policy,” but the reality remains.  Everything is relative.  Of course, whether Mr. Tillerson will maintain and persevere with his previously stated views on climate change is open to question.  And if he does, can he succeed in influencing Oval Office policy when competing with Scott Pruitt, Trump’s pick to run EPA, not to mention Rick Perry, Trump’s bizarre choice to become Secretary of Energy?”

Since then, we have learned the answer to that question.  Despite Secretary Tillerson’s (apparent) support for the U.S. to remain in the Paris Agreement, the combined forces of EPA Administrator Pruitt, Secretary of Energy Perry, and – most important – former White House Chief Strategist, Steve Bannon, the President announced in June of last year his intention to withdraw the United States from the Agreement, following on a host of moves to reverse the Obama administration’s domestic climate change policies.

Secretary Tillerson’s Record at the State Department

Perhaps Mr. Tillerson should be credited for the fact that the State Department has at least remained engaged in the climate change negotiations under the United Nations Framework Convention on Climate Change (UNFCCC), including by sending a delegation to the annual talks in Bonn, Germany (from which I reported last year), where negotiators from other Parties to the Paris Agreement personally related to me how surprised they were by the constructive role the U.S. delegation was continuing to play (in putting meat on the bones of the Paris Agreement).  However, such continued bureaucratic involvement cannot make up for the fact that the U.S. is disengaged at political levels, which must be attributed – at least in part – to Tillerson’s ineffectiveness in tilting the President toward a more sensible path on climate change policy.

It is beyond the scope of this blog (and my expertise) to comment more broadly on Mr. Tillerson’s general leadership of the State Department or on the many key areas of international relations outside of the climate policy realm.  But, I will note that my Harvard Kennedy School colleague (and former ambassador), Nicholas Burns, together with another former ambassador, Ryan Crocker, described in a scathing New York Times Op-Ed how the Foreign Service has been virtually dismantled under Tillerson.

In another harsh New York Times Op-Ed, Antony Blinken assessed “How Rex Tillerson Did So Much Damage in So Little Time.”  But, as Blinken points out, the great irony is that Tillerson had “good judgment” on many of the critical international issues facing the administration.  In addition to (apparently) asking the President to keep the U.S. in the Paris Agreement, Tillerson supported the Trans-Pacific Partnership (TPP), Obama’s nuclear deal with Iran, a calmer approach to North Korea, staying firm against Russian aggression (such as in Ukraine), and calming the Qatar-Saudi Arabia controversy, which was instigated, in part, by Trump himself.  But on all of these issues, Tillerson’s sensible, if inexperienced, diplomatic advice failed to win the day.

Out with the Bad, In with the Worse?

Enter Mike Pompeo.  What would his presence as Secretary of State mean – both broadly, and in particular, for climate change policy?

In broad terms, Pompeo is apparently smart (as is Tillerson), highly ideological (which Tillerson, a moderate, is decidedly not), and very partisan (which, again, Tillerson is certainly not).  This does not sound like good news for the leadership of the U.S. Department of State.

On the other hand, Pompeo might be expected to slow down, if not reverse, the hollowing out of the State Department’s political leadership and Foreign Service officer corps that has occurred under Tillerson’s enthusiastic down-sizing of the Department.

Antony Blinken’s conclusion was that with Pompeo in the lead, “we can expect a focus on hard-power solutions to every problem, … and an even more aggressive pursuit of ‘America First.’”  Whereas Tillerson apparently tried to check Mr. Trump’s worst instincts, “now we may see them fully unleashed.”  Good God, what a thought!

The Path Ahead for Global Climate Change Policy

That is a rather frightening prognosis across the board.  But what about climate change policy, in particular?  Does Mr. Pompeo at least share Mr. Tillerson’s personal understanding of the reality of the problem and the importance of addressing the threat?

Sorry, but the answer does not provide cause for hope.  In the House of Representatives, before his move to the CIA, Congressman Pompeo was a consistent, long-term, and vocal skeptic of the science of climate change, and an outspoken critic of the Obama administration’s climate policies, which he characterized in 2015 as a “radical climate change agenda.”  Although he may have modified his views since his appointment as CIA Director, at his confirmation hearings in January, 2017, he stated that Obama’s view that climate change is a significant issue for national security was “ignorant, dangerous, and absolutely unbelievable.”

Final Words

Secretary Tillerson’s exit from the State Department and Mr. Pompeo’s entry, assuming he is confirmed by the U.S. Senate, will constitute yet another sad chapter in the short history of the sorry state of governance under the presidency of Donald Trump.  During twenty-eight years of teaching at Harvard, until 2016, I had remained stubbornly non-partisan, but sixteen months after the election, I still find it difficult to believe that we have elected such an individual to be President of the United States.

Whether or not you agree with my admittedly harsh assessment of this President, his administration, and the political environment in which we now find ourselves, I want to recommend two books:  How Democracies Die by Steven Levitsky and Daniel Ziblatt (a pair of Harvard political science professors); and Trumpocracy:  The Corruption of the American Republic by David Frum (a conservative writer at The Atlantic).  Together they provide a superb diagnosis of the evolution of the current national — and international — political environment.  Unfortunately, I am still looking for a prescription for a promising way forward.

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