The Call for Corporate Action: NYU Stern Student Voices, Vol. 11 Spring 2024

EDITED BY PROFESSOR JEFFREY J. YOUNGER, NICOLETTE HENDRAWINATA, AIDAN KATZ, YANGYANG LAI

STEPHEN XU, AND TARUN SIVAKUMAR

DESIGNED BY EMY SAINBAYAR, AND JOCELYN CHEN

LETTER FROM THE DEAN

ROBERT WHITELAW

Dean of the Undergraduate College

Edward C. Johnson 3d Professor of Entrepreneurial Finance

NYU Stern School of Business

It Is truly a pleasure to share wIth all of you the latest edition of The Call for Corporate Action. The Call provides a platform to celebrate essays written by Stern undergraduate students on varied topics, as they explore challenges facing our global society. Writing this letter is a favorite responsibility of mine, and I do not take it lightly. Each year, the bar is raised, and I continue to be impressed by the intellect and passion poured into all of the ideas the students share on how to better the world around us.

From a smart system that encourages ecofriendly reductions in energy usage to a credit card that incentivizes sustainable choices, the range of the students’ work is astounding. As always, the innovative solutions and creativity displayed by our students are inspiring.

These essays personify the Social Impact pillar, one of the five themes that guide the Stern Undergraduate College experience. This pillar states “We’re eager to use business to create a positive impact, and we take this responsibility seriously.” Through thoughtful research and analysis, the essays in this issue offer unique proposals and highlight ways that organizations can act ethically and with social responsibility. The ideas generated show that our students are

thinking like the future global business leaders they are destined to become–visionaries who will have a positive social and environmental impact.

Moreover, the students’ essays included in this issue of The Call for Corporate Action truly embody the Stern spirit of change–our call to action to harness innovation as a force for good. I hope you enjoy reading this incredible collection of work as much as I did.

Regards, Robert Whitelaw

In the sprIng of 2023, we found ourselves finally back fully in the classroom following the disruption and dislocation of the pandemic. We listened to distinguished guest speakers in the plenary sessions on Monday nights and engaged in critical dialogue in our discussion sections throughout the fourteenweek semester.

We considered Amazon as an illustration of the complexity of the relationship between “business” and “society,” focusing on the allegations that it illegally exercises monopolistic power, maintains contentious labor relations, and exploits troves of user data. We then considered a series of global challenges that shape the relationship between business and society worldwide, including climate change, economic inequality, and political polarization.

INTRODUCTION TO BUSINESS AND SOCIETY MATT STATLER

Clinical Professor of Business and Society, Richman Family Director of Business Ethics and Social Impact Programming

Finally, we studied the emerging strategies that allow individual businesses to create economic gain while at the same time helping make society more socially and environmentally sustainable.

Why?

NYU Stern has required students to take four courses in the Social Impact Core Curriculum for more than twenty years because we believe the world needs leaders who can think critically and creatively about the relationship between business and society. Some of our students may pursue careers as social innovators and entrepreneurs, while others may seek more traditional career paths as bankers, accountants, marketers, and technologists. But whatever they pursue, they are entering an increasingly precarious world in which the purpose of business in and for

society is being reconsidered and renegotiated from many different perspectives.

All 650 student members of this first-year undergraduate cohort have developed a capacity to think and write persuasively, to engage in the consideration and negotiation about what can and should be possible for business to achieve. Here, I celebrate the excellence of the top 10 published authors together with my co-coordinator Prof. Jeffrey Younger, Senior Associate Director of Social Impact Programming Mara van Loggerenberg, and the many faculty and staff colleagues who help design and facilitate that learning process.

We take hope for the future from the insight and energy of the students and from the thrill of learning together!

Professor Matt Statler

HARNESSING TECHNOLOGY TO EFFECT

ENERGY-CONSCIOUS

BEHAVIORAL CHANGES AT NYU

by Dylan McFarland

Author Dylan McFarland suggests that adding sensors to fuse boxes in students’ dormitories at NYU and a reminder system to reduce their energy usage could improve the university’s sustainability goals.

now more than ever, we need to adopt sustainable living practices.

Recent statistics show that unless a drastic change occurs in current energy usage, humans will cause irreparable damage to the planet.1 In response to this crisis, startups and established companies alike have developed technologies to mitigate negative human-induced environmental impact. The overarching goal for most of these projects remains consistent: to consume energy more efficiently.2

While these technological advancements have substantially mitigated environmental impact, achieving meaningful strides in environmental protection requires more than just integrating new technologies. A fundamental shift in human behavior regarding energy usage is also crucial. To do so, investors and businesses must harness technology to drive our decisions.

New York University (NYU) epitomizes a large institution that could significantly benefit both itself and the broader environment by leveraging technology to improve energy usage behavior. In 2022, the university consumed an astounding 120,329,679 kilowatt-hours of electricity, resulting in over 27 million dollars in energy bills.3 To put this number into perspective, balancing the subsequent carbon emissions would require planting nearly 900,000 saplings and letting them grow for a decade — or recycling over 18,000 tons of waste.4

NYU recognizes its environmental footprint and commits a portion of its annual budget toward oncampus sustainability initiatives. The university expects to cut 50 percent of building emissions by 2025 and be carbon neutral by 2040, with 2 percent attributed to student behavioral changes (examples include turning off unused computers, reducing the number of computing devices,

and adjusting occupancy hours).5 Based on these goals, NYU is wellpositioned to invest in and adopt new technology aimed at reducing energy consumption.

I, along with a group of NYU students, have recently developed a system that can surpass the 2 percent energy reduction NYU expects from student behavior changes. The system is a smart home solution that tracks students’ electricity usage throughout the day and offers real-time visual updates and recommendations on how to consume energy more efficiently. Similar to how smartphones notify users about screen time, this system would notify students of unsustainable habits and encourage them to adopt eco-friendly practices. The system works by following behavioral frameworks that help make energy consumption decisions frictionless and fun for students by applying the Transtheoretical Model, the Tamagotchi Effect, and gamification (more on these concepts later). Overall, the system is financially viable and reduces net energy costs for NYU.

Most of the school’s energy consumption comes from its buildings, and over a quarter of them are student dormitories. Since monitoring individual power usage in dormitories is easier than in other school buildings, focusing only on NYU’s residence halls is a manageable first step for the institution.

However, if the goal is to get students to conserve electricity, they need to know how much energy they use. Across the more than 40 interviews conducted with students living on campus, not a single student could accurately estimate their daily power consumption. If NYU expects students to improve their energy consumption behavior, as stated in its Climate Goals initiative, students need to know more about what actions in their daily lives they can change.

Starting with electric hardware, we noted that a dorm-specific electric

meter primarily uses off-the-shelf components. Further, National Electric Code section 240.24 requires that every dorm has an accessible fuse box which can be adapted to include electrical current flow sensors.6 Once installed, these sensors can monitor the sections of a room consuming electricity, the amount of power being consumed, and the duration of use in real time. At present, my team is developing an AI model that will take the input from the current sensors, and compare them to a second set of datameasuring factors such as brightness, temperature, and room occupancy to determine which devices should remain on and which can be turned off.

For instance, if the sensors detect that the HVAC system is running on full heat when the window is open and the weather is chilly, the AI model could suggest via text that the student close the window and lower the heat to reduce energy consumption. Efficient interior temperature management alone could lower yearly dorm energy usage by as much as 10 percent.7

While a 10 percent reduction in dormitory energy costs is substantial, reaching the figure requires participation from all residents. Altering people’s behavior with an activity as ingrained as energy usage necessitates some behavioral nudging. The Transtheoretical Model (TTM) is a psychotherapeutic framework that can influence how the system functions by notifying and pushing data to users. Following this framework, the project can achieve a higher user conversion rate.

The framework is broken down into five stages for behavior change: pre-contemplation, contemplation, preparation, action, and maintenance.8 Tailoring the device’s feedback and recommendations to each student’s stage of change will guide them toward more sustainable habits.

For example, during the precontemplation stage, the device

will provide information on the environmental and financial benefits of energy conservation, delivered over text to spark students’ interest. Then the system progresses students to the contemplation stage and will offer personalized data on energy consumption patterns, encouraging students to evaluate their energy behavior. In the preparation phase, the device could suggest actionable steps, such as setting energy-saving goals or planning to unplug devices when not in use. Once students reach the action stage, where they have begun taking steps to reduce energy usage, the device can continue to reinforce positive habits by providing real-time feedback, celebrating milestones, and offering gentle reminders.

Finally, during the maintenance stage, the device can help students stay on track by monitoring their progress, sending motivational messages, and alerting them to potential setbacks. By incorporating the steps outlined in the Transtheoretical Model, the device could change students’ behavior and promote sustainable energy usage.9

In addition to adopting the TTM framework, inspiration for behavioralchanging incentives can be lifted from an existing successful digital consumer product: Tamagotchi. Coined to describe people’s emotional attachment toward virtual lifeforms, the Tamagotchi Effect is a powerful methodology that could be applied to get people to better follow the device’s suggestions.10 The term comes from the Japanese toy Tamagotchi, a small device that allows users to interact with a series of buttons to keep a pixelated character alive. Failure to do so would result in the character’s death. The toy was a massive success and became a worldwide phenomenon, with people of all ages changing elements of their daily routine to ensure they could continue interacting with the device to keep their characters alive.11

By attaching a virtual character

to the device, whether it be a cute animal or a forest of trees (perhaps corresponding to the number of trees offset with better energy usage), and then linking the character’s health to the energy use habits of the student, users would likely be more mindful of the energy use suggestions to keep their pet alive.

Beyond the Tamagotchi Effect, community leaderboards in video games offer an additional behavioral change method. By tapping into the competitive spirit and gamifying energy conservation, reducing electricity usage may actually become fun. A 2014 Princeton University student energy-reduction contest supports this notion, demonstrating that friendly competition can motivate substantial behavioral change.

The contest, which encouraged students to switch off unnecessary dorm lights for just over three weeks, resulted in a 5 percent daily decrease in kilowatt-hours.12 Integrating the proven benefits of competition with a gamified leaderboard pulling data from the sensors would further incentivize students to adopt energysaving habits.13 This approach would complement the Transtheoretical Model of behavior change, which posits that individuals progress through stages of change as they adopt new behaviors. The leaderboard system would facilitate progress through the TTM stages by providing continuous feedback, reinforcement, and a supportive community to encourage and sustain energy conservation efforts.

Developing a leaderboard requires minimal additional hardware—an inexpensive screen mounted in hightraffic public areas of dormitories such as lounges, lobbies, and near elevators. The screen would display a ranked leaderboard of top-performing energy-efficient students by default. The leaderboard would draw students passing by into the competitive atmosphere of striving for the top position.

“ NYU is well-positioned to invest in and adopt new technology aimed at reducing energy consumption.”

Participation in the leaderboard and competitions would be voluntary. Prizes would be distributed monthly, with leaderboards resetting at the end of each month, allowing for new opportunities to compete. Besides fostering competition among dorm residents, the leaderboard would also promote self-improvement, rewarding individual progress to encourage even the lowest-ranking participants to continue conserving energy, thereby facilitating movement through the TTM stages.

By utilizing these data-driven behavioral change methods framed within the Transtheoretical Model, NYU can reduce its annual energy expenditure by over 2 million kilowatt hours of power every year. In fact, the Environmental Protection Agency estimates that by reducing unnecessary energy usage from HVAC, lighting, and auxiliary plugged-in devices, dormitory residents could achieve a fifteen percent reduction in household electric usage.14 Assuming these monitoring and suggestion devices were installed in every NYU undergraduate dorm and operated

with a realistic 60 percent average user conversion rate (computed based on past student engagement in dorm energy initiatives), NYU would save an additional $600,000 yearly, an 8 percent reduction from their current dorm energy budget.15

While these cost savings may seem small in contrast to NYU’s nearly $4 billion annual spending on university operations, the initiative would save over 2,000 metric tons of CO2 annually, comparable to planting 8,400 trees.16 Additionally, implementing these devices across campus would fit within the 2025 and 2040 NYU energy initiatives, allowing the university to accomplish its goals faster.

Integrating such a widespread solution requires both upfront investment and funds for maintenance. Based on aggregating the results of a series of manufacturing RFQs (request for quotes) sent to wholesale electronics suppliers and using set union electrician rates, the expected average price per dorm to install and maintain the system is just under $125.17

While the investment is substantial,

NYU is expected to break even in under a year.18 The university should first pilot the system in a single dorm building to confirm the project is feasible. If the pilot garners a positive response from students and energy usage reduces significantly, it would serve as an indication for NYU to scale the project. Since the system constantly collects data, the success metrics would be visible, allowing NYU to easily justify expansion.

NYU is committed to sustainability, which presents a unique opportunity for the school to leverage technology to influence better behavior in students when consuming electricity. The AI-driven monitoring devices collect individualized data to inform students of their energy consumption behavior. The system then uses the Transtheoretical Model along with gamification techniques like the Tamagotchi Effect and community leaderboards to effectively improve this behavior.

Integrating these strategies aligns with NYU’s existing environmental initiatives and will save millions of kilowatt-hours of electricity, significantly reducing its carbon footprint. While it is necessary to invest and maintain the project, a well-structured pilot program will help determine whether a larger-scale rollout is feasible. Implementing this project at NYU successfully will serve as a blueprint for other institutions, businesses, and communities worldwide to adopt similar practices, thereby contributing to a more sustainable future for all.

DISCUSSION QUESTIONS

1. What practical questions do you still have regarding this project and how would you address them?

2. How would you feel about playing a game that adjusts your behavior toward energy conservation?

1 “The Effects of Climate Change.” NASA, 25 Apr. 2023, climate.nasa.gov/effects.

2 Bergl, Skylar. “How Huge NYC Development Hudson Yards Is Solving Its Infrastructure Issues.” Fast Company, 10 Feb. 2014, www.fastcompany.com/3025550/hudson-yards-building-adigital-city.

3 Grewell, Christian. “NYU Energy Data 2018 - 2022.” 12 Apr. 2023.

4 “Greenhouse Gases Equivalencies Calculator - Calculations and References.” Environmental Protection Agency, 30 May. 2023, www.epa.gov/energy/greenhouse-gases-equivalencies-calculatorcalculations-and-references.

5 NYU Office of Sustainability “Climate Action Plan Update 2021.” New York University, 2021, www.nyu.edu/life/sustainability/ climategoals.html.

6 ”2018 ISEP International Solar Energy Provisions.”, International Code Council, 1 June. 2018, codes.iccsafe.org/s/ISEP2018/ national-electrical-code-nec-solar-provisions/ISEP2018-NECSec240.24.

7 Deanne, Emily. “Green Your College Dorm Room.” NRDC, 14 Aug. 2019, www.nrdc.org/stories/green-your-college-dorm-room.

8 Raihan, Nahrain, Mark Cogburn, “Stages of Change Theory.” StatPearls Publishing, 6 Mar. 2023, www.ncbi.nlm.nih.gov/ books/NBK556005.

9 Prochaska, J O, and W F Velicer. “The transtheoretical model of health behavior change.” American Journal of Health Promotion: AJHP vol. 12, Oct. 1997, pp. 38-48. doi.org/10.4278/0890-117112.1.38.

10 Lawton, Laura. “Taken by the Tamagotchi: How a Toy Changed

DYLAN MCFARLAND

“The idea for this paper came as a result of having made the prototype I describe. As a student in the Stern BTE program, I was required to develop a hardware solution to tackle an on-campus climate issue as part of my freshman-year capstone project. After my team and I were selected as finalists in our major’s hackathon, I was inspired to write more in depth about the potential use cases for such a solution at NYU.”

the Perspective on Mobile Technology.” The IJournal: Student Journal of the University of Toronto’s Faculty of Information, vol. 2, no. 2, 30 Mar. 2017, https://theijournal.ca/index.php/ijournal/ article/view/28127.

11 Pandell, Lexi. “This is your brain on obsession.” Vox, 13 Dec. 2021, www.vox.com/the-highlight/22824061/tamagotchi-brainobsession-trends.

12 van der Linden, Sander. “Intrinsic Motivation and ProEnvironmental Behaviour.” Nature News, 24 Jun. 2015, www. nature.com/articles/nclimate2669#MOESM405.

13 Bassanelli, Simone, et al. “Gamification for Behavior Change: A Scientometric Review.” Acta Psychologica, Aug. 2022, pubmed. ncbi.nlm.nih.gov/35767927.

14 “Reduce the Environmental Impact of Your Energy Use.” Environmental Protection Agency, 30 May 2023, www.epa.gov/ energy/reduce-environmental-impact-your-energy-use.

15 Grewell.

16 EPA.

17 “New York Electricians Costs & Prices.” Promatcher, electricians. promatcher.com/cost/new-york-ny-electricians-costs-prices.aspx.

18 Grewell.

Photo Credits:

■ Jocelyn Chen—page 6

■ Romaset/AdobeStock—page 9

■ Chanakon/AdobeStock—page 10

■ Meet NYU/https://meet.nyu.edu/life/our-first-year-residencehalls/—page 10

CLASS OF 2026, MAJORING IN BUSINESS, TECHNOLOGY, AND ENTREPRENEURSHIP

by EMMA YANG

HOW TOURISM CAN SAVE THE ALLEYS OF BEIJING HUTONGS AND HOSTELS:

China’s back alleyways, known as “hutongs,” are disappearing due to evolving architectural trends and modernization. Author Emma Yang proposes a solution to preserve these rich cultural artifacts through tourism initiatives and microloans.

As the alleyways behInd Beijing’s main streets fade out of existence, so does the culture they hold. To protect these artifacts, called “hutongs,” there needs to be an incentive for Beijing’s government to preserve them and for residents to stay. The solution seems clear in the current global age: give residents financial autonomy and support businesses in the hutongs. But how can these objectives be accomplished?

A satellite image of Chinese hutongs shows something not unlike the grids and patterns of New York City streets. And like claustrophobic Times Square, hutongs are lined with small shops, residences, and businesses. Yet, with each of New York’s neatly planned perpendicular intersections, the back alleyways of China have a mass of windy roads crossing at tight choke points.1

A Chinese hutong, defined most conventionally as a small alleyway, is mostly seen in the country’s capital, Beijing. Hutongs preserve the cultural integrity of a pre-communist China and represent an era before the rapid development of global architectural trends.2

A Dying ArchitecturAl typology

Each hutong has a central courtyard, or siheyuan, that opens into a spacious square. Tucked behind the bustling front of each small alleyway, these courtyards stem from the original etymology of the word hutong, a water well or micro-neighborhood.3 The open-air structure of these spaces, coupled with the unique architectural flourishes of the space, land hutongs on many tourist lists and make hutongs increasingly popular destinations. Unfortunately, there is a dwindling number of these hutongs in central Beijing. From above, the bird’s nest of back alleys has slowly been disappearing, becoming newer versions of older, more unique streets.4

A simple Google search on, “how to save Chinese hutongs,” reveals that the internet may care more about ranking these small alleyways as tourist attractions than preserving them. One site argues that “gentrification may save those [hutongs] that are left as the Beijing city authorities realize the importance of hutongs to Beijing’s growing tourist industry.”5 The Chinese government seems to be doing exactly that (albeit not perfectly) by engaging in a certain type of gentrification for the hutongs but then attempting to

reverse the rebuilding of the alleyways by painting fake bricks onto stark, gray concrete walls.6

These visual changes weren’t the only things happening. With modernization comes certain unavoidable negative externalities. Housing prices within Beijing’s city borders are rising, making it more advantageous for hutong residents to sell their property and move to the countryside. On top of that, many residents and small businesses have accepted offers for alternative housing options as their hutongs undergo a modernization process. Residents aren’t only getting priced out, they’re choosing to leave because there’s no apparent reason to stay.7

These circumstances leave a generation of hutong residents who likely will not grow old in their current residences and will not be able to see the next generation of their families live there either.8

A housing crisis

How can this problem be solved?

On paper, the simple thing to do seems to be to give residents the financial ability to stay in their hutong residences. Following that, one could look toward the microloan industry as a potential solution. Offering residents small amounts of money with flexible pay-back options seems like a highly viable idea, especially in the Chinese market of easily accessible digital loans.

Of course, no issue is as simply solved as that. In an interview with Susan Davis, CEO of BRAC USA and adjunct professor of social entrepreneurship at NYU Stern, the executive noted that, “One strategy for all probably won’t work.”9 Microloans have solved extreme poverty issues in certain instances, most notably in Bangladesh through Grameen Bank. But microloans can’t fix every financial crisis.

Still, there are parallels between the Bangladeshi community, one filled with close-knit neighbors serving as accountability partners, and the small hutong communities, which would allow for a similar transparent system of banking. However, the issue with hutongs is not completely a housing issue or a poverty issue; it extends past that to the treatment of architectural spaces within an untapped market for tourism.10

As for microloans, there needs to be a way for that sum of money to generate wealth for the future of its borrowers. Generational wealth for hutong residents will have to come from a newer type

of innovation that doesn’t follow a conventional way of thinking.

MillenniAls & Airbnb

Before the Beijing Olympics in 2008, journalist Joanne Yao explored the Beijing hutongs. At the time, many residents were being offered alternative housing options, since hutongs were being bulldozed to make room for shiny new sporting arenas. Residents took these offers, and the bulldozing commenced.11

Residents didn’t seem to treasure their old homes over a newer apartment, and Yao noted that “although local Chinese usually

take hutongs for granted, the lifestyle is very attractive to visiting foreigners who are intrigued by these culturally rich abodes.”12

While scarcity may be at the root of the disappearances of the hutongs, the increase in global demand for them may be occurring independently. As preferences shift, tourists care more about immersing themselves in local customs and partaking in activities that parallel older bed and breakfasts than staying in luxury hotels and visiting landmarks.13

In a recent CNBC article, Monica Pitrelli notes that millennials are getting richer and using that money to travel. With that, the atmosphere around traveling is changing “and [millennials are] bringing their social

Image: China. Beijing Hutong. 2014

“h utongs preserve the cultur A l integrity of A pre - co MM unist c hin A ... ”

consciousness and spending habits in tow, which is transforming a travel industry intent on staying ahead of the times.”14

According to Pitrelli, millennials love Airbnbs in particular and have begun a great migration out of Marriotts and Hiltons.15

This affinity means that rather than staying

business opportunities.

by Evgeny Bondarenko. https://www.behance.net/gallery/53639757/Beijing-Hutong-Urban-sketch

There are already pioneers in the hutong revitalization space. The Dongsi Museum Restoration Project uses traditional Chinese architectural techniques to revitalize hutongs that have suffered aging and gentrification. They give new life to the courtyards inside hutongs and offer tourists an unquestionably unique experience.16 These spaces, once preserved, can be turned into small museum experiences with local vendors inside.17

In more mainstream tourist destinations, like the neighboring Forbidden City, hawkers set up shop alongside architectural landmarks and feed into China’s sprawling tourism industry. Similar systems can exist in hutongs — and some already do. Yet as small businesses may thrive in some hutongs, they have not had the opportunity to tap into the tourism market like their peers in more popular destinations. Still, in hutongs, the smaller more intimate scale may pose an opportunity for struggling vendors.

A hutong hostel

The issue with hutongs runs deeper than struggling to establish small businesses to save architectural spaces. There are actual residents inside hutongs, and they need reason and resources to be able to stay in their hutong communities.18

hostels can work. In Morocco, traditional riads are popular destinations for tourists, and many hotel chains have tapped into that type of stay for their guests. These riads have become a type of ultra-rich escape in an underdeveloped economy — but the model in Beijing’s hutongs would be different.21

Hutong residents would own and operate these hostels, keeping the deeds and property ownership in their hands. These hostels would serve as an extension of the lifestyle within the hutongs while also offering a unique business opportunity for residents. Rather than becoming unhoused, these individuals could take advantage of the growing number of tourists flocking to historic relics like hutongs.

being the bAnker in A gAMe of Monopoly

But how could residents pay for a hostel space if they can barely afford to stay in their current houses?

in a hotel in the heart of Beijing, a subset of tourists will be more likely to seek intimate experiences and culturally rich stays that can be found within hutongs.

A hutong for the people (AnD the tourists)

Turning hutongs into tourist hubs would allow these micro-communities to function as independent micro-economies. This potential would support the unique atmosphere of hutongs where residents and businesses coexist in a rich culture unique to those specific streets. Essentially, hutong tourist hubs may preserve the integrity of hutongs while taking advantage of unique

Joanne Yao uncovered a unique hospitality industry within hutongs that may show promise. Yao met Bobby Zhang, a 36-year-old entrepreneur who was establishing hostels inside hutong spaces. These hostels were small, operating at a maximum capacity of only 20-30 guests. Zhang took the courtyard space of hutongs and turned it into an intimate experience with a traditional cultural backdrop.19

As shown by millennials’ love for unique lodging options such as Airbnb, an intimate experience is something that travelers increasingly care about. Inside hutong hostels, tourists would not only be living in a space inside a unique community but would also have access to landmarks right outside their rooms.20

There is proof that spaces such as these

This is where the microloan industry comes into play. In China, the digital financial landscape has grown to encompass the banking industry and platforms like Ant Financial offer simple services for borrowing.22 Hutong residents opening hostels would be able to take out microloans through that technology or other similar services. These simple digital transactions would allow the residents to establish themselves as financially independent without needing to onboard a large amount of debt or deal with a large lender.

It is important to note that the main driver of microloan usage is through communities that do not have a large credit history and would not otherwise be able to borrow money. Microfinance is designed for income generation and to kickstart the establishment of generational wealth.23

With property ownership, hutong residents have collateral which would make them able to access traditional loans. Yet while their unique position of owning and renting property allows them to either take out a small business loan or a microloan, the microloan system is preferential for hutong residents, as they don’t currently have any

generational wealth that would support a strong credit history.

the grAss is AlwAys greener with green technology

There’s a deeper untapped potential within this business model. Global attention is on climate risk associated with pretty much every business, and investment in green technology is considered part of risk mitigation.24

For the hutong hostels, there are ways to implement technology that benefits the climate without detracting from the heritage of the space. For example, companies such as Ubiquitous Energy produce subtle additions such as windows with built-in

solar technology. Such understated but intentional designs create huge value in terms of ESG risk mitigation and can change the conversation surrounding the coexistence of historical preservation and technological innovation.25

Although the idea of adding green technology into these hostels and the hutongs themselves serves as a form of risk management, there exists a different inherent risk to the implementation of the hostel business model itself. At its heart, the hospitality industry leaves room for big players to come into certain spaces and dominate particular markets. This type of behavior has already sprouted in other communities, including New York City’s Chinatown, where board members from the Museum of Chinese in America have been accused of being the lead actors in

DISCUSSION QUESTIONS

the gentrification of the local Chinatown community.26

Similar incidents might happen in the hutongs — but the hutongs have something Chinatown does not: a foundation of cultural history and the support of the tourism industry in China. Most notably, some hutongs are heritage sites, and all of the remaining ones in existence are treated with care, primarily by preservation groups.

With the establishment of hutong hostels, large hotel chains may remain a possible direct market threat. Continued support from hutong preservation foundations and the communities living within the hutongs will hopefully ensure that successful hostels will not be bought out by modern mainstream hotel chains.

MicroloAns & MicrocosMs

The Economist describes hutongs as “a microcosm of changes ripping through China’s cities,”27 and rightfully so. There exists a certain clash between the economic prosperity of hutong residents and the preservation of the culture. On paper, they conflict with one another, as the key indicators of economic development center around a grayish concept of innovation.

However, if the hutongs move with the currents of the Chinese tourism industry and the global economy at large, it can be argued that hutong residents and the businesses inside will thrive and write their own destinies.

Ultimately, a part of each hutong’s future rests in its respective residents’ hands. By forming partnerships with businesses, foundations, and each other, residents can beat their hutong’s expiration date and prolong its shelf life. There is a world of possibilities beyond the current use (or misuse) of the space inside hutongs. Even as perspectives shift, there might always be room for these tiny pieces of Chinese culture that hold centuries of history.

1. How might different stakeholders consider the loss or gain of value that might come from turning hutongs into tourist destinations?

2. What other historical spaces can apply a similar business model?

Image: China. Beijing Hutong. 2014 by Evgeny Bondarenko. https://www.behance.net/gallery/53639757/Beijing-Hutong-Urban-sketch

1Teo, Martin. “The History and Reinvention of Hutongs, a Dying Architectural Typology in China.” Lifestyle Asia Kuala Lumpur, 26 Apr. 2019, www.lifestyleasia.com/kl/living/architecture/ history-reinvention-hutongs-dying-architectural-typology-china.

2 Seifman, Travis. “Hutong Gentrification: The Flip Side.” 上 り口説 Nubui Kuduchi, 24 July 2008, chaari.wordpress. com/2008/07/24/hutong-gentrification-the-flip-side.

3 Yao, Joanne. “Beijing’s Hutongs: Preserving History through Business.” Entrepreneur, Entrepreneur, 14 Aug. 2008, www. entrepreneur.com/starting-a-business/beijings-hutongspreserving-history-through-business/196442.

4 Teo.

5 “Hutongs in Beijing.” Beijing Visitor - China Travel Guide, 11 Nov. 2020, www.beijing-visitor.com/beijing-attractions/hutongs.

6 “The Wider Meaning of Change in a Beijing Alleyway.” The Economist, The Economist Newspaper, 18 May 2017, www. economist.com/china/2017/05/18/the-wider-meaning-ofchange-in-a-beijing-alleyway.

7 Liang, Lavinia. “Will the Drive to ‘Beautify’ Beijing’s Historic Areas Leave Older Residents Behind?” The Guardian, Guardian News and Media, 3 Oct. 2019, www.theguardian.com/ cities/2019/oct/03/will-the-drive-to-beautify-beijings-historicareas-leave-older-residents-behind.

8 Ibid.

9 Davis, Susan. “Personal Interview with Susan Davis.” 21 Apr. 2023.

10 Ibid.

11 Yao.

12 Ibid.

13 Pitrelli, Monica. “More Millennials Are Turning 40 - and They’re Changing Travel as We Know It.” CNBC, CNBC, 27 Mar. 2023, www.cnbc.com/2023/03/27/millennials-are-turning-40-andtheyre-changing-travel-as-we-know-it.html.

14 Ibid.

15 Ibid.

16 “Trending China: Preservation of Hutongs in Beijing.”YouTube, New China TV, 2 Nov. 2020, https://www.youtube.com/ watch?v=k9FxlgaeZzM.

17 Ibid.

18 Gardini, Ashley. “China’s Historic Preservation Challenges.” JSTOR Daily, JSTOR, 4 Apr. 2023, daily.jstor.org/chinashistoric-preservation-challenges.

19 Yao.

20 Miao, Scarlett. “The Hutong Renovation in Beijing: Reimagining Tiny Spaces in a Historic Neighbourhood.” ArchDaily, ArchDaily, 15 Oct. 2020, www.archdaily.com/948157/therenovation-of-hutong-in-beijing-reimagines-tiny-space-inhistoric-neighbourhood.

21 Bigio, Anthony. “The Sustainability of Urban Heritage Preservation: The Case of Marrakesh.” Inter-American Development Bank, Aug. 2010. https://publications.iadb.org/en/ publication/11562/sustainability-urban-heritage-preservationcase-marrakesh

22 “About Us.” Antgroup.Com, www.antgroup.com/en.

23 Davis.

24 “The Guide for Business Action on the SDGs.” SDG Compass, GRI, UN Global Compact, and WBCSD, sdgcompass.org/wpcontent/uploads/2015/12/019104_SDG_Compass_Guide_2015. pdf.

25 Stathaki, Ellie. “Modern Hutong House in Beijing Is Designed Using Passivhaus Principles.” Wallpaper.Com, Wallpaper, 26 Feb. 2022, www.wallpaper.com/architecture/modern-hutongshiyuan-by-days-in-yard-studio-beijing-china.

26 De Freytas-Tamura, Kimiko. “Why Some People in Chinatown

Oppose a Museum Dedicated to Their Culture.” The New York Times, The New York Times, 19 Aug. 2021, www.nytimes. com/2021/08/19/nyregion/chinatown-museum-protests.html.

27 “The Wider Meaning of Change in a Beijing Alleyway.”

Photo Credits:

■ Robepco/AdobeStock—page 12

■ Evgeny Bondarenko/Urban Sketches from Beijing—page 14

■ Evgeny Bondarenko/Urban Sketches from Beijing—page 16

EMMA YANG CLASS OF 2026, MAJORING IN FINANCE AND SUSTAINABLE BUSINESS

“My interest in this topic began from my passion for communities that were related to my identity. I wanted to combine the wisdom I’d learned from Professor Susan Davis in my Social Entrepreneurship class with that passion. Inside the microloan industry, I had looked towards a community closer to home: New York City’s Chinatown. After discussing with Professor Caruana, my Business & Society professor, I thought further East and looked toward China. This brought me to hutongs, and with a little research, my paper was born.”

BY SHERRY HU

LEVERAGING DECENTRALIZED MODELS TO IMPROVE U.S. CLINICAL TRIAL DIVERSITY

Sherry Hu makes the case that a few strategic and technical pivots in clinical and drug trial testing around the globe could reduce health inequities for minorities and shore up margins for pharmaceutical companies.

“

...these trials present a crucial step toward health equity.”

Over the past two decades, pharmaceutical companies have developed increasingly innovative drugs for patients across the United States. An important part of the drug development process are clinical trials, in which companies test the drug’s efficacy and safety on patients enrolled in the trial. Unfortunately, racial minorities are significantly under-represented in U.S. trials. For instance, only 11 percent of trials in cancer therapeutics enrolled a proportion of racial minorities to match the prevalence of the disease among the minority group.1 The lack of clinical trial diversity harms minorities and creates negative externalities for the U.S. population. Existing solutions to improve minority trial participation are plagued by costs that disincentivize pharmaceutical companies from implementation. However, recent advancements in decentralized trial technologies enable the creation of shared value in promoting minority trial participation.

Given the financial benefits and the potential to improve clinical trial diversity, Bristol-Myers Squibb should partner with IQVIA and the National Community Pharmacists Association to host a decentralized trial for cardiovascular drugs.

THE PROBLEM OF LOW TRIAL DIVERSITY

Low trial diversity threatens the health of minorities while creating economic and public health costs. Historically, the lack of clinical trial

data on minorities has prevented pharmaceutical companies from developing drugs that adequately address minorities’ physiological needs.2 The absence has also caused minorities to experience more adverse events, such as side effects and allergic reactions from drugs.3 In conjunction with other socioeconomic factors, the lack of safe, effective treatment for minorities has created an increased gap in disease recovery rates between minorities and non-minorities.4 Additionally, health inequity has economic and public health costs as it reduces the life expectancy, disability-free expectancy, and working years of minorities.5

Health inequity also reduces minorities’ trust in the healthcare system, which also has significant public health costs. During the COVID-19 pandemic, for example, many African Americans felt hesitant to get vaccinated due to the lack of clinical trial data on their demographic. Consequently, minorities not only experienced higher mortality rates but were also more likely to infect others.6 The lack of minority participation in clinical trials increases health inequity, creating negative externalities for the U.S. population as a whole.

The issue is further complicated by socioeconomic, geographic, and information barriers to minority trial access. Poverty rates for African Americans and Hispanics are more than two times higher than those of nonHispanic whites.7 However, low-income patients are less likely to participate in clinical trials because most of these patients are paid hourly wages and cannot afford to take time off work to

participate in trials.8 Furthermore, racial minorities are more likely to be located far away from the urban hospitals where clinical trials are typically held, making the transportation to trial sites an expensive and time-consuming process.9 Further, investigators from pharmaceutical companies have been found to withhold trials from minorities under the belief that they cannot follow trial procedures, an implicit bias that prevents minorities from accessing trial information.10 The difference in socioeconomic status and information asymmetry between minorities and pharmaceutical companies causes minorities to have little power in advocating for treatment, contributing to their continued exclusion from U.S. clinical trials.

LIMITED IMPACT OF CURRENT EFFORTS

Current efforts to increase diversity in U.S. clinical trials center around the promotion of scientific literacy amongst minority communities.11 While education is important, these initiatives require long-term investment by pharmaceutical companies and do not have clear financial returns in the short term. The process of educating minority patients can also delay the patient enrollment timeline for pharmaceutical companies, with each additional day of delay costing approximately $8 million in foregone revenues.12 Although the FDA requires pharmaceutical companies to disclose the demographic information of trial participants,13 this information has never been audited due to continued lobbying by pharmaceutical companies themselves.14 The lack of financial

incentives for pharmaceutical companies to promote trial diversity, combined with the intersectional barriers to minority trial access, limits the impact of current solutions to the problem.

POSSIBLE SOLUTION: DECENTRALIZED MODEL FOR CLINICAL TRIALS

To improve clinical trial diversity, pharmaceutical companies could adopt a decentralized model for clinical trials. Decentralized clinical trials are “studies in which the need for patients to physically access hospital-based trial sites is reduced or eliminated… through the use of digital tools such as e-consent, apps, wearable devices, Electronic Patient-Reported Outcomes (ePRO), [and] telemedicine.”15 Although online trials have been conducted since 2011, these trials often required patients to self-report their symptoms on the web and therefore face issues with data accuracy.16 Recent advances in wearable technologies however, enable the passive collection of biometric data from patients in an environment that closely resembles the real world. Through facilitating at-home data collection, decentralized clinical trials resolve the time and financial barrier that minorities face in traveling to trial sites. Moreover, decentralized trials reduce the implicit biases of investigators in recruiting patients through virtual screening. By reducing the intersectional barriers patients face in trial participation, decentralized trials create value for minorities who may not otherwise have trial access.

Additionally, adapting decentralized trials can generate financial returns for pharmaceutical companies. Studies found that decentralized trial procedures can lead to five-fold to thirteen-fold improvement in trial return on interest by reducing the costs associated with screening failures and decreasing the time taken to conduct trials. The return on interest calculation accounts for the additional cost of hosting decentralized trials, such as distribution, staff training, and planning costs.17

Decentralized trials also increase patient enrollment by improving trial access

and convenience, which reduces patient dropout rates by around 15 percent and improves patient retention. Furthermore, decentralized trials reduce protocol deviations by 54 percent through the improved consistency of automated data collection.18 These deviations occur when trial investigators fail to follow planned protocols, which leads to safety risks, trial delays, and protocol amendments which, according to the Tufts Center for the Study of Drug Development, can cost $141,000 to $535,000 depending on the trial phase.19 Since companies have both moral and financial incentives to invest in decentralized trials, this approach presents a sustainable solution for improving trial diversity.

PARTNERSHIP TO PROMOTE TRIAL DIVERSITY

Specifically, Bristol-Myers Squibb, IQVIA, and the National Community Pharmacists Association (NCPA) should partner to host a decentralized trial for Bristol-Myers’ drugs. BristolMyers is the leading U.S. developer of drugs for cardiovascular disease, which has a particularly high gap in recovery rates between minorities and non-minorities.20 Given Bristol-Myers’ scale, the company has a high impact on whether minorities have access to relevant trials. IQVIA is a clinical research organization that performs trial site planning and patient recruitment services for pharmaceutical companies. In addition to providing traditional trial planning services, IQVIA has hosted more than 380 decentralized studies in 30 countries.21 With its expertise and track record, IQVIA is uniquely equipped to deliver a decentralized trial for Bristol-Myers. The NCPA is an association that represents more than 19,400 community-based pharmacies.22 As an association of local pharmacies, the NCPA can assist IQVIA in recruiting minorities from underserved communities that do not have access to urban trial sites. Community-based pharmacies are also more likely to employ diverse employees, who can better understand the needs of minority participants.23

For the partnership, IQVIA can use its electrocardiogram devices to test for the occurrence of adverse cardiovascular events in trial participants. Electrocardiograms are FDA-approved medical devices that record a patient’s heart rhythm and electrical activity to detect their risk for events like stroke, angina, and heart attack.24 The occurrence of such events is a common primary endpoint for cardiovascular trials, where it is used to assess the safety and efficacy of drugs.25 To distribute electrocardiogram devices and train patients on their proper usage, IQVIA can host pop-up clinics at the pharmacies in the National Community Pharmacists Association. Throughout the trial, patients can use these clinics to receive Bristol-Myers’ drugs and seek support on any problems. Following the distribution of the electrocardiograms, IQVIA can use its data analytics platform to analyze the data from the devices. IQVIA’s analytics platform can also ensure that patient enrollment is meeting diversity targets and identify areas where additional recruitment is needed, ensuring Bristol-Myers meets its enrollment goals within the desired timeline.26

The proposed partnership creates value for all the stakeholders. Given the benefits of decentralized trials, BristolMyers can reduce patient recruitment costs, reduce protocol changes, and accelerate the trial timeline. BristolMyers can therefore generate savings in the drug development value chain, creating shared value.27 Researchers have already used electrocardiograms in clinical settings where patient enrollment and adherence to procedures were high across all racial groups.28 The FDA also recently promised to “work with sponsors to implement decentralized components into clinical trials.”29 With high patient compliance and increasing regulatory support, Bristol-Myers can minimize the risk of investing in decentralization. By improving the diversity of trial participants, Bristol-Myers can also better promote their drugs to minorities and gain access to a market that has historically been underpenetrated.30

Meanwhile, IQVIA earns service revenue from hosting the trial for Bristol-Myers. The pharmacies benefit from increased foot traffic from participants looking to pick up devices for the trial and who may also purchase other drugs at the pharmacies. Finally, all three partners can improve their brand image by promoting racial diversity amongst trial participants, therefore attracting ESG-minded consumers and investors.

LIMITATIONS TO DECENTRALIZED TRIALS

Despite the benefits of improving minority participation, there are several limitations to decentralized trials. One limitation is the cost of transporting Bristol-Myers’ drugs to rural pharmacies, which is higher than the costs of transporting drugs to centralized study sites.31 As such, Bristol-Myers and IQVIA should compare the costs of drug transportation to the savings of accelerated trial timelines. Another barrier to the partnership is the digital divide, as minorities and older patients are less likely to be familiar with wearable technologies.32 Inconsistencies in the way that participants use the wearable can create issues with data quality, which can reduce the likelihood of trial

approval. To mitigate this limitation, IQVIA can deploy investigators at the pharmacies to train trial participants on how to use the device properly. The nature of decentralized trials also enables increased patient recruitment, which creates greater sample sizes that can smooth out data inconsistencies.33 To ensure sustainable financial returns, pharmaceutical companies must consider both the technical and financial limitations of decentralized trials. Regulatory agencies play a pivotal role in promoting minority trial participation. For example, the FDA could provide a certification for drugs tested on an adequate number of minorities. Although the FDA currently requires pharmaceutical companies to submit information on participant demographics, this information is often not audited or visible to consumers.34 The proposed certification can be disclosed on drug packaging and prescription guidelines to inform consumers, physicians, and insurance providers. Such a certification would increase the financial incentive for companies to improve trial diversity as physicians are more likely to prescribe adequately tested drugs over drugs that do not have the certification. The proposed certification is similar to the certified Good Manufacturing Practice

standard that the FDA currently enforces for pharmaceutical companies, which ensures “a [drug] is safe for use.”35 As demonstrated through the high frequency of drug-related adverse events for minorities, minority trial participation is as important to the safety of a drug as its manufacturing practices. Due to its similarities with existing certifications, a diversityrelated certification is both feasible and necessary for the FDA to implement.

CONCLUSION

A joint venture between BristolMyers Squibb, IQVIA, and the National Community Pharmacists Association to host decentralized trials generates shared value for all the stakeholders involved. The partnership reduces recruitment costs and accelerates trial timelines for Bristol-Myers while generating service revenue for IQVIA and improving foot traffic at participating pharmacies. Moreover, decentralized trials improve diversity by reducing the geographical and financial barriers to minority involvement. Given the potential of decentralized trials to improve drug efficacy and safety for minorities, these trials present a crucial step toward health equity.

DISCUSSION QUESTIONS

1. What kind of trade-off might be created by decentralized drug trials?

2. What is the best first step for pharmaceutical companies seeking to promote scientific literacy amongst minority communities?

SHERRY HU

“When I began my research, I was disheartened by how little regulation there was on improving the representation of diverse individuals in clinical trials. During my research process, however, the FDA published a set of guidelines related to the implications of decentralized clinical trials in improving diversity. It was very rewarding to see that an idea I had for the pharmaceutical industry was being recognized by regulators; I hope that these guidelines can propel the industry toward a more equitable future.”

1 Domingo, B. Kirsten and Helman, Alex. “Improving Representation in Clinical Trials and Research: Building Research Equity for Women and Underrepresented Groups.” The National Academies Press. Washington, D.C., 2020, https://doi. org/10.17226/26479.

2 Ibid.

3 Bazan, Isabel S, and Kathleen M Akgün. “COVID-19 Healthcare Inequity: Lessons Learned from Annual Influenza Vaccination Rates to Mitigate COVID-19 Vaccine Disparities.” The Yale Journal of Biology and Medicine vol. 94,3 509-515. 30 Sep. 2021

4 Orsi, Jennifer M., et al. “Black–white health disparities in the United States and Chicago: A 15-year progress analysis.” American Journal of Public Health, vol. 100, no. 2, 2010, pp. 349–356, https://doi.org/10.2105/ajph.2009.165407.

5 Goldman, Dana P., et al. “Consequences of health trends and medical innovation for the future elderly.” Health Affairs, vol. 24, no. Suppl2, 2005, https://doi. org/10.1377/hlthaff.w5.r5.

6 Bazan and Akgün.

7 Creamer, John. “Poverty in the United States: 2021.” Census.Gov, 13 Sep. 2022, www.census.gov/library/publications/2022/demo/p60-277.html.

8 Unger, Joseph M., et al. “Patient income level and cancer clinical trial participation.” JAMA Oncology, vol. 2, no. 1, 2016, p. 137, https://doi.org/10.1001/ jamaoncol.2015.3924.

9 Eberth, Jan M., et al. “The problem of the color line: Spatial Access to hospital services for minoritized racial and ethnic groups.” Health Affairs, vol. 41, no. 2, 2022, pp. 237–246, https://doi.org/10.1377/hlthaff.2021.01409.

10 FitzGerald, Chloë, and Samia Hurst. “Implicit bias in healthcare professionals: A systematic review.” BMC Medical Ethics, vol. 18, no. 1, 2017, https://doi. org/10.1186/s12910-017-0179-8.

11 “Industry Efforts to Enhance Clinical Trial Diversity.” PhRMA Foundation, Jul. 2022,phrma.org/-/media/Project/PhRMA/PhRMA-Org/PhRMA-Refresh/ Campaign-Pages/Clinical-Trial-Diversity/PDF/Company-CTD-Efforts.pdf.

12 Earls, Elly. “Clinical Trial Delays: America’s Patient Recruitment Dilemma.” Clinical Trials Arena, 13 July 2022, www.clinicaltrialsarena.com/features/ featureclinical-trial-patient-recruitment.

13 Domingo and Helman.

14 Wouters, Olivier J. “Lobbying expenditures and campaign contributions by the pharmaceutical and health product industry in the United States, 1999-2018.”

JAMA Internal Medicine, vol. 180, no. 5, 3 Mar. 2020, p. 688, https://doi. org/10.1001/jamainternmed.2020.0146.

15 Petrini, Carlo, et al. “Decentralized clinical trials (DCTS): A few ethical considerations.” Frontiers in Public Health, vol. 10, 2022, https://doi.org/10.3389/ fpubh.2022.1081150.

16 Neese, Kristen. “Pfizer Conducts First “Virtual” Clinical Trial Allowing Patients to Participate Regardless Of Geography.” Pfizer.com, Pfizer, 7 June 2011, www.pfizer. com/news/press-release/press-release-detail/pfizer_conducts_first_virtual_clinical_ trial_allowing_patients_to_Participate_regardless_of_geography.

17 DiMasi, Joseph A., et al. “Assessing the financial value of decentralized clinical trials.” Therapeutic Innovation & Regulatory Science, vol. 57, no. 2, 2022, pp. 209–219, https://doi.org/10.1007/s43441-022-00454-5.

18 Patil, Bhausaheb. “DCTs Deliver Big ROI.” IQVIA, 28 July 2022, www.iqvia.com/ library/white-papers/dcts-deliver-big-roi.

19 Getz, Kenneth A., et al. “The Impact of Protocol Amendments on Clinical Trial Performance and Cost.” Therapeutic Innovation & Regulatory Science, vol. 50, no. 4, 2016, pp. 436–441, https://doi.org/10.1177/2168479016632271.

CLASS OF 2026, MAJORING IN FINANCE WITH A MINOR IN MATHEMATICS

20 “Heart Disease Risk: How Race and Ethnicity Play a Role.” Cleveland Clinic, 15 May 2022, my.clevelandclinic.org/health/articles/23051-ethnicity-and-heartdisease.

21 Patil.

22 “About NCPA.” About, ncpa.org/about#mission.

23 Tandon, Ramita. “Community Pharmacies Can Help Bridge the Diversity Gap.” Applied Clinical Trials Online, Applied Clinical Trials Online, 17 Apr. 2023, www. appliedclinicaltrialsonline.com/view/community-pharmacies-can-help-bridge-thediversity-gap.

24 “Electrocardiogram.” Johns Hopkins Medicine, 8 Aug. 2021, www.hopkinsmedicine. org/health/treatment-tests-and-therapies/electrocardiogram.

25 Bosco, Elliott, et al. “Major adverse cardiovascular event definitions used in observational analysis of administrative databases: A systematic review.” BMC Medical Research Methodology, vol. 21, no. 1, 2021, https://doi.org/10.1186/ s12874-021-01440-5.

26 “Patient Recruitment.” IQVIA, 2023, www.iqvia.com/solutions/research-anddevelopment/clinical-trials/patient-recruitment.

27 Porter, Michael E., and Mark R. Kramer. “Creating shared value.” Managing Sustainable Business, 2018, pp. 323–346, https://doi.org/10.1007/978-94-0241144-7_16.

28 Mayfield, J.J., Chatterjee, N.A., Noseworthy, P.A. et al. “Implementation of a fully remote randomized clinical trial with cardiac monitoring.” Communications Medicine, 1, 62 (2021). https://doi.org/10.1038/s43856-021-00052-w.

29 Craven, Jeff. “FDA Issues Draft Guidance on Decentralized Clinical Trials.” RAPS, 2 May 2023, www.raps.org/news-and-articles/news-articles/2023/5/fda-issues-draftguidance-on-decentralized-clinica.

30 Ding, Alexander, et al. “The role of integrated medical and prescription drug plans in addressing racial and ethnic disparities in medication adherence.” Journal of Managed Care & Specialty Pharmacy, vol. 28, no. 3, 2022, pp. 379–386, https:// doi.org/10.18553/jmcp.2022.28.3.379.

31 Agrawal, Gaurav, et al. “No Place Like Home? Stepping up the Decentralization of Clinical Trials.” McKinsey & Company, McKinsey & Company, 10 June 2021, www.mckinsey.com/industries/life-sciences/our-insights/no-place-like-homestepping-up-the-decentralization-of-clinical-trials.

32 Goodson, Noah, et al. “Opportunities and counterintuitive challenges for decentralized clinical trials to broaden participant inclusion.” Nature Portfolio Journal Digital Medicine, vol. 5, no. 1, 2022, https://doi.org/10.1038/s41746-02200603-y.

33 De Jong, Amos J., et al. “Opportunities and challenges for decentralized clinical trials: European regulators’ perspective.” Clinical Pharmacology & Therapeutics, vol. 112, no. 2, 2022, pp. 344–352, https://doi.org/10.1002/cpt.2628.

34 Domingo and Helman.

35 “Current Good Manufacturing Practice (CGMP) Regulations.” U.S. Food and Drug Administration, FDA, 25 Oct. 2023, www.fda.gov/drugs/pharmaceutical-qualityresources/current-good-manufacturing-practice-cgmp-regulations.

Photo Credits:

■ Testalize.me/Unsplash—page 18

■ JHDT Productions/AdobeStock—page 20

■ Jan Kopřiva/Unsplash—page 22

Repurposing Idle Oil Wells in Alberta for Geothermal Energy Generation by Kaelen Hunter

Author Kaelen Hunter proposes to address the problem of idle oil wells in Canada and their associated environmental harms via a two-step solution involving Cenovus Energy repurposing its “inactive” wells, and a partnership between the Orphan Well Association and the Alberta Indigenous Opportunities Corporation for converting “orphaned” wells for geothermal energy production.

Energy Resource Potential of Canada, Geological Survey of Canada, Open File 6914 (revised), p. VII, https://publications.gc.ca/collections/ collection_2013/rncan-nrcan/M183-2-6914-eng.pdf.

For better or for worse, the “pump jack” is a staple of Alberta, Canada. From nearly every vantage point along the province’s prairies, dozens of these machines dot the otherwise empty horizon. Yet today, 97,000 of these oil wells are inactive and another 71,000 have been abandoned outright.1 In fact, the “pace of abandonment is accelerating,” as the number of idle wells grew by 50 percent in the last five years.2 Although these pump jacks were the catalyst for Alberta’s economic prosperity in the late twentieth century, they are becoming increasingly criticized for a legacy of environmental and indigenous exploitation.3 Furthermore, after a lifetime of controversy, much of the abandoned infrastructure is beginning to put an environmental and financial strain on both indigenous and broader communities across Alberta.

Cenovus Energy—the second largest oil and gas extraction company in Alberta—should evaluate a program to repurpose their inactive wells for geothermal energy generation as a hedge against an increasingly green economy.

Additionally, to tackle orphaned wells, the Orphan Well Association (OWA) should evaluate a partnership with the Alberta Indigenous Opportunities Corporation to offer an avenue for sustained economic development through geothermal energy well conversions.

THE PROBLEM OF IDLE OIL WELLS

Although oil and gas operators are required to “fund the cost of well cleanup” under the “polluter pays” principle, this hardly occurs in practice.4,5 In the case of abandoned sites, the oil and gas companies responsible are often constrained financially and it is expensive to decommission an oil well. A research paper by Daniel Raimi calculated the median cost of “plugging and surface reclamation” for a single well at $102,000 Canadian (CAD).6 The corporate owners of these sites are often barely solvent by the time it no longer makes financial sense to drill for oil or natural gas, and they struggle to fund expensive cleanup costs.7

Many of the laws enshrined in the Canadian Environmental Protection Act and the Alberta Environmental Protection and

Enhancement Act aren’t enforced, which exacerbates negligence in handling used oil wells.8 Some oil and gas companies have discovered that their best way to avoid security and reclamation costs is to go bankrupt, skirting rules requiring them to address their remaining environmental liabilities—and often before they pay back creditors.9 Both financially and legally, companies looking to decommission their sites are incentivized to dodge their environmental responsibilities. As a result, these orphaned wells become the property of the Orphan Well Association.10 Companies that classify their oil wells as “inactive” present the same problem as those that abandon their wells entirely. Companies like Cenovus Energy often close sites for technical or economic reasons labeling the suspensions as “temporary.”11 The company skirts Canada’s mandate to seal and remediate these wells in their first twelve months of being idle by representing that the wells will eventually reopen.12 So long as the wells’ corporate owner remains financially solvent, they only need to be plugged—not sealed—to remain in this “suspended” state indefinitely.13 Even

Figure 1 Map showing example of in-place geothermal energy 6-7 km depth across Canada. Similar in-place energy is found at shallower and deeper levels. Grasby, S.E., Allen, D.M., Bell, S., Chen, Z., Ferguson, G., Jessop, A., Kelman, M., Ko, M., Majorowicz, J., Moore, M., Raymond, J, and Therrien, R., 2012. Geothermal

relatively new wells—once closed—have less than a one-in-five chance of being reactivated.14 Therefore, regardless of abandonment or temporary deactivation, many idle oil wells in Alberta are not properly decommissioned and sealed, a phenomenon that continues to have severe environmental implications for the province.

Unsealed oil wells undermine efforts toward climate action and maintaining clean water and sanitation.15 First, without proper decommissioning, about 10 percent of inactive wells and 7 percent of abandoned wells leak, contaminating local groundwater.16 In addition to leaking benzene and methane—pollutants that are harmful to human health—a study by Brian Fontenot discovered that water reservoirs within three kilometers of natural gas wells contained unsafe levels of arsenic, selenium, strontium, and barium.17,18 Not only has this leakage raised numerous public health and safety concerns for communities across central and southern Alberta, but the damage it caused has disproportionately affected nearby indigenous nations.19 For example, the Lubicon Cree have attributed “tragic [health and cultural] consequences” to the 2600 oil and gas wells on their territory.20

Beyond ground pollution, idle oil wells emit toxic chemicals and greenhouse gases, including an abundance of methane, a potent greenhouse gas with a “Global Warming Potential” 27-30 times greater than carbon dioxide.21,22 Estimates from the United States Environmental Protection Agency (EPA) state that each unplugged and inactive oil or gas well emits approximately 10 grams of methane per hour, as opposed to 0.002 grams per hour for plugged wells.23 Combined, Alberta’s idle wells emit nearly 15,000 metric tons of methane each year, a tangible threat to U.N. sustainability targets.

Responding to environmental and public health concerns, the Canadian government allocated $1 billion CAN towards “oilfield cleanup grants,” with $100 million CAN specifically allotted to the “First Nation[s] and Métis.”24 Still, researchers from the Alberta Liabilities Disclosure Project calculated that “cleaning up all of the old and unproductive oil and gas wells in Alberta will cost between $40 billion and $70 billion CAN.”25

The severity of the idle well crisis necessitates an alternative approach. Instead of reclamation, repurposing these suitable sites for geothermal energy generation

presents a profitable and environmentally responsible solution for Cenovus Energy and the Orphan Well Association to eliminate their inactive and orphaned oil wells, respectively.

GEOTHERMAL ENERGY GENERATION, EXPLAINED

Generating geothermal power follows the same principle as fossil fuel power: the conversion of heat energy to electrical energy. Since “the Earth’s core is [naturally] hot…we can tap into [this] practically unlimited heat source to generate energy.”26 Geothermal power plants work by “circulating water through hot rock deep beneath the surface” and having it resurface at a temperature hot enough to convert refrigerants or other fluids into vapors that crank a turbine to generate an electric current.27 Importantly, geothermal plants are closed-loop systems that have comparatively little effect on the local environment.

Geothermal energy enjoys various practical advantages over both fossil fuels and renewables. For one, unlike natural gas or coal, geothermal power does not produce greenhouse gas emissions, nor can it be depleted; it is a renewable resource. Geothermal energy can help “increase the share of renewable energy in the global energy mix” to achieve the U.N.’s seventh Sustainable Development Goal, “Affordable and Clean Energy.”28 Geothermal energy can help reach this goal, and it is better suited than most other forms of renewable energy to do so. Unlike wind and solar power, geothermal energy producers can dial up or dial down their output on demand. Such flexibility is more efficient than traditional methods, matching energy supply to demand.29 Currently, the energy industry relies on fossil fuels because many present forms of renewable energy are intermittent, meaning, “they don’t work all the time…the wind doesn’t always blow, [and] the sun doesn’t always shine.”30 However, geothermal energy is constant, flexible enough to replace fossil fuels, and able to chart a path toward U.N. targets.

CONVERTING OIL AND GAS WELLS TO GEOTHERMAL ENERGY WELLS

Despite its advantages, “geological constraints, high capital costs, and other challenges” have kept wide-scale geothermal generation a distant reality.31 However, oil and gas wells happen to share many of the same characteristics as geothermal wells.32 Much of the

infrastructure is already in place. Without the need for drilling, Cenovus Energy and the Orphan Well Association (OWA) can avoid almost “half the cost of most geothermal energy projects.”33 Such conversions are only strengthened by the fact that the same properties that make a subsurface rock formation ideal for oil and gas extraction also make it ideal for geothermal storage.34 Thus, not only are abandoned oil and gas wells characteristically similar to geothermal wells but they may be conveniently operated in the same locations.

In January 2023, researchers from the University of Illinois, Urbana-Champaign (UIUC) “turn[ed an] abandoned oil well into a giant geothermal battery.”35 Not only was their conversion successful, but their study “produc[ed] electricity at a competitive $0.138 per kilowatthour,” an economically viable and even profitable level.36 Moreover, according to their research, geothermal wells can store energy at 82 percent efficiency, allowing operators to sell when prices are high.37 Therefore, repurposing these sites promises to transform abandoned oil and gas wells from a financial and environmental burden on Alberta taxpayers to a long-term valuecreating investment for Cenovus Energy and the Alberta Indigenous Opportunities Corporation.

A TWO-STEP SOLUTION

The complexity of well ownership necessitates a two-step response from business; inactive wells are owned by corporations; orphaned wells are not. Firstly, Cenovus Energy should repurpose its inactive wells as a hedge against an increasingly green future. As the world “moves away from fossil fuels and adopts more clean and renewable energy sources, oil giants that have dominated markets for more than a century, [like Cenovus Energy] are in trouble.”38 To “respond to the current economic discontinuities,” McKinsey and Company recommends that oil and gas companies, “diversify into alternative, profitable growth options in low-carbon businesses.”39 While costly for most companies, Cenovus Energy can gain an advantage by repurposing its existing oil and gas well infrastructure for geothermal energy generation.

In contrast, converting the Orphan Well Association’s abandoned sites is more complex. The project would still be economically competitive, but unlike Cenovus Energy, the OWA lacks access

...geotherMAl energy generAtion will Meet AnD exceeD the owA’s Mission to help AffecteD AlbertAns. ”

to upfront capital to make the transition. The OWA should partner with the Alberta Indigenous Opportunities Corporation to utilize the $100 million of government grants for indigenous communities. For the OWA, the proposition is simple: instead of closing wells to protect people and the environment, repurposing them for geothermal energy generation will meet and exceed the OWA’s mission to help affected Albertans.40 In fact, by promoting the growth of this renewable resource, this partnership would allow the OWA to take an active stance in reducing greenhouse gas emissions.

From the standpoint of the Alberta Indigenous Opportunities Corporation, granting indigenous communities ownership of these orphaned wells offers an avenue for sustained economic development through geothermal energy well conversions. Instead of using its $100 million grants for remediation, indigenous communities would have the opportunity to invest in energy—a resource that the World Bank describes as “tightly linked to economic development.”41 This partnership would help reduce inequalities by working toward an equal economic playing field for a traditionally marginalized community.42 Importantly, indigenous autonomy and agency are preserved. The partnership opens an avenue for economic development as local communities explore the possibility of converting these orphaned sites.

POTENTIAL DOWNSIDES TO GEOTHERMAL ENERGY WELL CONVERSIONS

Although repurposing oil and gas wells for geothermal energy builds shared value for stakeholders and addresses a multitude of United Nations’ sustainability targets, the proposal is not flawless.43 Not all oil and gas wells are naturally suitable for geothermal energy generation. In some cases, drilling deeper can fix this problem, but drilling is the most costly part of constructing a geothermal plant (42-95 percent).44 This cost alludes to a greater issue facing geothermal energy well conversion: financing.

Even with existing infrastructure, geothermal energy projects are capitalintensive; Cenovus Energy and the Alberta Indigenous Opportunities Corporation (AIOC) would have to enact their programs on a well-by-well or field-by-field basis.

A study of abandoned wells in California counties shows that favorable geology and climate can drop the cost of repurposing wells for geothermal applications.45

Cenovus and the AIOC will need to carefully select wells in locations with suitable topography, geology, and climate.46, 47, 48, 49, 50

Cenovus and the AIOC will also need to contend with public perception. Even with sufficient financing and available technical capabilities, “studies show that public perception and policy can be

DISCUSSION QUESTIONS

significant limiting factors in geothermal development.”51 The studies find that continued positive interaction with stakeholders is necessary to guide each project.

A BRIGHT CONCLUSION

As the number of inactive and abandoned oil wells climbs in Alberta, it is increasingly important that we address their environmental footprint. Fortunately, companies can repurpose idle wells, converting property traditionally considered a liability into assets. As one of the largest oil and gas companies in Alberta, Cenovus Energy is well-positioned to refurbish its inactive wells for profitable geothermal energy generation, hedging its core hydrocarbon business against a cleaner future. Concurrently, the Orphan Well Association and Alberta Indigenous Opportunities Corporation in partnership, can repurpose the orphaned wells afflicting Albertans and provide an economic growth opportunity to indigenous communities through geothermal energy generation. Together, not only do these ventures curtail pollution from inactive and orphaned wells, but they profitably build stakeholder value through a clean energy source. It is time to redefine Alberta’s energy economy.

1. What additional background work and diligence needs to go into this project before deciding to move forward?

2. Abandoned and orphaned wells in other parts of Canada are less suitable for geothermal conversion. How might businesses address this continuing problem?

1 Weber, Bob. “Abandoned Oil and Gas Wells Put Unfair Burden on Alberta Landowners, Taxpayers, Study Says.” CBC, 21 May 2021, www.cbc.ca/news/canada/calgary/ abandoned-wells-oil-gas-alberta-cost-report-1.603383.

2 Ibid.

3 “The Leduc Era: 1947 to 1970s - Conventional Oil - Alberta’s Energy Heritage.” History Alberta, www.history.alberta.ca/energyheritage/oil/the-leduc-era-1947-to-1970s/default. aspx.

4 DeLaire, Megan. “Here’s How Deep Canada’s Orphan Well Problem Runs.” CTVNews, 2 Apr. 2023, www.ctvnews.ca/climate-and-environment/here-s-how-deep-canada-s-orphanwell-problem-runs-1.6338136#:~:text=The%20same%20report%20found%20there.

5 Government of Canada. “Canadian Environmental Protection Act, 1999.” Justice Laws Website, 22 June 2023, laws-lois.justice.gc.ca/eng/acts/c-15.31/page-1.html.

6 Raimi, Daniel, et al. “Decommissioning Orphaned and Abandoned Oil and Gas Wells: New Estimates and Cost Drivers.” Environmental Science & Technology, vol. 55, no. 15, 14 July 2021, https://doi.org/10.1021/acs.est.1c02234.

7 Simard, Chris, et al. “Restructuring and Insolvency Deals in the Oil Patch: Recent Trends and Developments” Alberta Law Review, 9 Dec. 2022, p. 381 https://albertalawreview. com/index.php/ALR/article/view/2724.

8 DeLaire.

9 Ibid.

10 Simard.

11 Alberta Energy Regulator. “Well, What’s the Difference?” 4 Feb. 2020, www.aer.ca/ providing-information/news-and-resources/news-and-announcements/stories/well-whatsthe-difference.

12 Ibid.

13 Ibid.

14 Weber.

15 United Nations. “The 17 Sustainable Development Goals.” 2015, sdgs.un.org/goals.

16 Weber.

17 Delaire.

18 Fontenot, Brian E., et al. “An Evaluation of Water Quality in Private Drinking Water Wells near Natural Gas Extraction Sites in the Barnett Shale Formation.” Environmental Science & Technology, vol. 47, no. 17, Aug. 2013, pp. 10032–40, https://doi.org/10.1021/ es4011724. Accessed 9 Mar. 2022.

19 DeLaire.

20 Amnesty International. “From Homeland to Oil Sands - the Impact of Oil and Gas Development on the Lubicon Cree of Canada.” June 2010, www.amnesty.org/en/wpcontent/uploads/2021/06/amr200022010en.pdf.

21 DeLaire.

22 US EPA. “Understanding Global Warming Potentials | US EPA.” 5 May 2022, www.epa. gov/ghgemissions/understanding-global-warming-potentials.

23 US EPA. “Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990-2016: Abandoned Oil and Gas Wells.” EPA, 2018, www.epa.gov/sites/default/files/2018-04/documents/ ghgemissions_abandoned_wells.pdf.

24 Bakx, Kyle. “Indigenous Communities Secure $100M to Clean up Oil and Gas Wells.” CBC, 27 Nov. 2020, www.cbc.ca/news/business/irc-savage-alberta1.5818506#:~:text=Business-.

25 Bakx, Kyle. “Old, Unproductive Oil and Gas Wells Could Cost up to $70B to Clean Up, Says New Report.” CBC, 9 Apr. 2019, www.cbc.ca/news/business/orphan-wells-albertaaldp-aer-1.5089254.

26 Dhanesha, Neel. “Clean Energy Is Buried at the Bottom of Abandoned Oil Wells.” Vox, 19 Apr. 2022, www.vox.com/recode/23024204/geothermal-energy-heat-oil-gas-wells.

27 Temple, James. “This Geothermal Startup Showed Its Wells Can Be Used like a Giant Underground Battery.” MIT Technology Review, 7 Mar. 2023, www.technologyreview. com/2023/03/07/1069437/this-geothermal-startup-showed-its-wells-can-be-used-like-agiant-underground-battery/.

KAELEN HUNTER

“Driving across the Alberta prairies as a kid, I used to count the neglected “pump jacks” along the horizon and always assumed that they were deserted. Today more than ever, this assumption has proven true. But inspired to revisit the topic, I discovered that it did not have to be this way; repurposing these wells for geothermal energy generation uniquely addresses multiple issues facing Albertans—from well leakage to a dying oil-based economy, and a legacy of indigenous exploitation. The next step was making that clear to the world.”

28 United Nations.

29 Let’s Talk Science. “Understanding Electricity Supply and Demand.”, 23 July 2019, letstalkscience.ca/educational-resources/backgrounders/understanding-electricity-supplyand-demand.

30 Ibid.

31 Temple.

32 Dhanesha.

33 Ibid.

34 Tangermann, Victor. “Researchers Successfully Turn Abandoned Oil Well into Giant Geothermal Battery.” Futurism, 28 Jan. 2023, futurism.com/the-byte/researchersabandoned-oil-geothermal-battery.

35 Ibid.

36 Ibid.

37 Ibid.

38 Huddleston Jr, Tom. “Bill Gates Predicts Oil Companies ‘Will Be Worth Very Little’ in 30 Years — Here’s Why.” CNBC, 6 Nov. 2021, www.cnbc.com/2021/11/06/bill-gates-bigoil-companies-will-be-worth-very-little-in-30-years.html.

39 Beck, Chantal, et al. “How Oil and Gas Is Navigating the Energy Transition.” McKinsey, 10 Mar. 2021, www.mckinsey.com/industries/oil-and-gas/our-insights/the-big-choices-foroil-and-gas-in-navigating-the-energy-transition.

40 Orphan Well Association. “FAQ.” OWA, www.orphanwell.ca/faq/.

41 Jack, Kelsey. “How Much Do We Know about the Development Impacts of Energy Infrastructure?” World Bank, 29 Mar. 2022, blogs.worldbank.org/energy/how-much-dowe-know-about-development-impacts-energy-infrastructure#:~:text=Energy%20is%20 tightly%20linked%20to.

42 Ibid.

43 Clean water, affordable and clean energy, economic growth, infrastructure, reduced inequality, sustainable communities, responsible production, and climate action.

44 Caulk, Robert A., and Ingrid Tomac. “Reuse of Abandoned Oil and Gas Wells for Geothermal Energy Production.” Renewable Energy, vol. 112, pp. 388–97, Nov. 2017, https://doi.org/10.1016/j.renene.2017.05.042.

45 Ibid.

46 Grasby, S.E., et al. “Geothermal Energy Resource Potential of Canada.” Geological Survey of Canada, 2012, publications.gc.ca/collections/collection_2013/rncan-nrcan/M183-26914-eng.pdf

47 McKenzie, Baker. “SUPREME COURT OF CANADA TO HEAR ALBERTA’S “ORPHANED” OIL WELLS CASE.” HazMat Remediation - Clean Technology Management, 14 Nov. 2017, hazmatmag.com/2017/11/14/supreme-court-of-canada-tohear-albertas-orphaned-oil-wells-case/

48 Natural Resources Canada “Crude Oil and Natural Gas Resources.” The Atlas of Canada, 2006, open.canada.ca/data/en/dataset/cdfd1440-8893-11e0-a55f-6cf049291510/ resource/84654182-814e-46af-b3dd-e3cc47ab87de#additional-info

49 Government of Alberta. “First Nation Reserves and Metis Settlements.” 2021, open.alberta. ca/dataset/04074608-dabc-49c6-b25e-840a4b2844ee/resource/28f32e73-c0bb-4ead-99ee66a7646fd030/download/ir-first-nations-reserves-and-metis-settlements-map-2021-04.pdf

50 Northwestern and Central-Eastern Alberta could be good locations to investigate. These areas have the hottest underground temperatures in the province and coincide with maps of active wells and locations of the property of First Nation peoples.

51 Nadkarni, Kabir, et al. “Converting Oil Wells to Geothermal Resources: Roadmaps and Roadblocks for Energy Transformation.” Energy Policy, vol. 161, p. 112705, Feb. 2022, https://doi.org/10.1016/j.enpol.2021.112705.

Photo Credits:

■ Ilmar/AdobeStock—page 24

■ Natalia Bratslavsky/AdobeStock—page 28

CLASS OF 2026, MAJORING IN ECONOMETRICS AND QUANTITATIVE ECONOMICS

BY VIHAAN HARI

INDIAN FARMERS LOST MILLIONS OF DOLLARS WORTH OF CROPS FROM ELEPHANTS TRAMPLING THEIR FARMS. AUTHOR VIHAAN HARI PROPOSES A MORE HUMANE ALTERNATIVE TO ELECTRICAL FENCES: BEE FENCES SOURCED FROM A LOCAL APIARY.

ELEPHANTS

BEE-ING

DETERRED BY A SPECIAL FENCE

They say an elephant never forgets and this certainly applies to foods, farms, and fences. Specifically, they remember what foods they want, where the farms are located, and how to destroy the surrounding fences. Consequently, Indian farmers experience the negative effect of elephants constantly breaking into their farms and destroying millions of dollars worth of crops. However, the issue runs deeper than elephants simply trampling banana trees.

Increases in India’s human population have forced the government to increase residential housing at the expense of the natural elephant habitat. With little area to find food, elephants resort to farms as their means of sustenance. Despite the prominence of the issue, current action has proven to be fruitless – and dangerous to both elephants and humans. As strict governmental regulations frustrate the farmers, and the Indian population continues to grow, beehive fencing may solve the issue of elephant damage to banana farms while simultaneously providing a new revenue stream for farmers.

Context of this Perpetual Issue

Due to the sustainable style of farming typical in South India, damages to crops result in a loss of multiple years of work.1 As an outcome, farmers experience fewer yields prompting less revenue overall. The agricultural industry is one of the biggest in India, with bananas as the leading

export crop.2 As more than half a million Indian workers are employed annually in the banana sector, obstacles affecting production are likely to have a significant impact on the country’s economy.3 While the government realizes the macroeconomic scope of the issue, their hands are bound. The demand for housing has skyrocketed in the past years and the government is faced with a decision: either build houses in the forest and induce elephant habitat loss, or limit housing construction and force the slum population to increase in major cities.

Past Failed Solutions

In the past, farmers were responsible for the security of their farms. One solution they used was to install DC-current electric fences that surrounded the farm. However, many of these fences did not have adequate insulators that capped the amount of current flowing.4 Additionally, many of these fences tap electricity from high and lowtension wires or use inverters from direct current batteries, rendering them illegal under Indian electrical standards.5 More importantly, these fences have contributed to 25.4 percent of all elephant mortalities from 2017 to 2020.6 Although effective at deterring elephants from entering farms, they are a major threat to the elephant population.

Elephants are classified as endangered and it is imperative to ensure the future survival of the species. Not only do they play a major role in the biodiversity of India’s forests by creating pathways in

densely forested habitat that allows passage for other animals, but they also act as a symbol — a religious icon for many Hindus.7 Farmers must implement a more elephant-friendly strategy. Some farmers choose to hire poachers to scare off the elephants. However, poachers seize this opportunity by shooting the elephants and cutting off their tusks to sell on the ivory market.8 This solution, as with electric fences, is ineffective and greatly contributes to the decline of the elephant population.

As this issue persists, the government has taken notice and created a Forest Department Agency (FDA) that is attempting to resolve the conflict. Typically, a farmer will call the FDA when an elephant is approaching their farm. The FDA will then send agents with firecrackers and sparklers to scare away the elephants.9 Yet, elephants are not always frightened by the scare tactics and instead charge at the agents, leaving some agents gravely injured.10 Finding a solution that effectively deters elephants from entering farms while also minimizing harm for both parties is imperative.

...elephants themselves are one of the most affected stakeholder groups, essential to both biodiversity and culture.”

Beehive Fencing

Introducing beehive fencing: a special type of fencing that utilizes elephants’ natural fear of bees.11 Beehive fencing is currently a common practice in Kenyan corn and potato farms and has proven effective in deterring elephant break-ins while minimizing harm to the elephants themselves. In a study conducted by Dr. Lucy King, Coexistence Director at nonprofit agency, Save the Elephants, beehive fences placed around a corn farm in Kenya had an 80 percent success rate in keeping elephants off farms.12 Additionally, bee fences are the standard in many farms across Sub-Saharan Africa with more than 10 countries implementing the strategy.

The reason why these fences are effective against elephants stems back to their biological characteristics. Although elephants are recognizable by their gray leathery skin, they contain soft tissue

These are photos taken from my dad’s farm (04/11/2023). In the photo on the left, the elephant uprooted an areca nut plant. On the right, we see a footprint of the perpetrator.

inside their trunks and around their eyes.13 These sensitive areas are targeted by bees and their stings cause an immediate painful reaction. Given previous interactions with bees, elephants will move away within ten seconds of hearing the sound of buzzing angry bees.14

With the power to scare away elephants merely from sound, beehive fencing is an optimal business strategy for farmers. Even if the noise is not a strong enough deterrent, the pain inflicted by the bee’s stinger will undoubtedly drive the elephant to reconsider.

Implementation of Fences

Electric fences cost anywhere from $5.25 to $9.00 US per meter while beehive fencing costs up to $1.50 US per meter.15 Because each hive protects a range of 10 meters on both sides, fewer hives are needed, whereas electric nodes are needed every couple of inches to keep the circuit continuous in an electric fence. As a result, it is more cost-effective for Indian farmers

to resort to beehive fencing than electric fencing which harms elephants.

Because India is the global leader in the number of beehives with 12.8 million as of 2021, it would be easier and cheaper for farmers to buy from Indian bee farms.16 Specifically, South Indian farmers should consider buying from Kashmir Apiaries, the biggest bee farm in India. With more than 50 thousand honeybee colonies, there is more than enough supply of beehives for banana farmers.17

Additionally, sourcing local Indian bees avoids the effects generated by utilizing invasive species. If India were to use beehives from China or Kenya, there is a chance that the bees would act as an invasive species in their new environment. This behavior could cause significant damage to abiotic factors and possibly the elephant population as well. Indian elephants and Indian bees are accustomed to

each other; venom in local bee stingers will not lethally affect the elephants. African bees have different concentrations of venom and a sting could result in unforeseen effects on elephant health.

Solving Insolvency

While beehive fencing addresses the issue of elephants trampling on farmers’ crops by providing a new deterrence method, the challenge of habitat loss persists. The decrease in habitable areas for elephants precedes the elephants’ search for food, requiring a further solution. With the Indian population projected to peak at about 1.7 billion in 2064, limiting housing expansion is not a viable solution.18 Instead, creating vegetated corridors between separated habitats would allow elephants to find sustenance without breaking into farms. Additionally, it allows the government to continue its housing plans for a booming human population.

The animal corridors would be “linear, narrow, natural habitat linkages that allow elephants to move between secure habitats without being disturbed by humans.”19 The effect is twofold. Firstly, elephants can live freely with all their necessities without human or farmer interaction. Secondly, these corridors are also critical for other wildlife including the Royal Bengal tiger, another endangered species.20 Not only do the vegetation alleys help sustain wildlife, but also allow housing expansion to commence without people fearing waking up to an elephant in their backyard.

These vegetation corridors would be established by trusts and non-profit organizations, after gaining consent

This happened in Karnataka, a neighboring state to my farm; three calves died due to the unnaturally high voltage in the electric fences (2/21/2023). This solution continues to harm the species.

These are the beehive fences in Kenya. Implementing this strategy in India would be effective in deterring elephants from entering an area.

The elephant is reconsidering entering the farm due to the beehives surrounding the premises.

from the government to work on the land. For example, one of India’s biggest sustainability trusts, the Wildlife Trust of India (WTI), has devoted countless resources to ensuring the survival of the Indian elephant species. Utilizing this solution would align with their interests and provide value to their goals.

Stakeholder Analysis

The beehive fencing solution creates value for farmers, the Indian economy, and bee farmers. Firstly, farmers do not have to worry about replanting millions of dollars worth of crops when an elephant approaches. As a result, they can consistently produce high yields and support the agricultural industry. Additionally, local beekeepers can build a new customer base. In the past, Indian bee farmers would have to export their hives all around the world, incurring additional shipping and transportation costs. Now, if their client base resides in their home country, they can eliminate the majority of shipping costs and deliver directly to the farmers. With 600

farms suffering from elephant damage, these bee farms, specifically Kashmir Apiaries, will benefit from an increased demand for their products.21

Finally, farmers can collect the honey produced from the hived fences, adding another revenue stream. Currently, India sits at the fourth spot in global honey production, a market worth over $8 billion. By increasing its beehive presence through bee fencing, India has the potential to strengthen its agricultural-based economy.22

Analysis of the vegetation corridor solution reveals that both elephants and real estate companies benefit. Elephants and other wildlife gain a land link containing all necessities while minimizing the chance of interaction with farmers. Real estate companies can expand further into nonurban areas to build affordable housing for the growing population. This strategy enhances the effects of government, allowing it to pursue wider economic growth as it allocates funding toward vegetation corridor maintenance and protection.

Potential Risks

There are potential risks involved with these solutions. With beehive fencing, there is a chance that Indian elephants are not frightened enough by the bees and are not discouraged from entering the farm. In this situation, the special type of fencing is rendered useless and the issue persists. However, this solution has proven to be effective with African elephants, which are larger and more aggressive than Indian elephants.23 Therefore, it is reasonable to assume that the fences will be at least 80 percent effective, if not more, as mentioned previously. Another major issue that could arise with this solution is the decline in bee populations.

With current environmental conditions, primarily air quality in India, colony collapse disorder (CCD) is a serious concern.24 CCD contributes directly to the decline of bee populations, limiting how widespread beehive fencing can be applied. Despite this concern, India still boasts the largest number of beehives, so beehive fencing seems a viable possibility.

When looking at the risks of creating vegetation corridors for the elephants, the issue of maintaining the integrity of the corridors arises. The purpose of creating alleyways is to prevent wildlife suffering due to the effects of habitat loss while simultaneously limiting interactions with humans. If people choose to expand into these passages, they increase the risk of having a dangerous encounter with the elephants as well as undermine the intention of the vegetation corridors.

Individually, these solutions benefit specific shareholders. Enacting them all together will result in a more positive and widespread outcome. Because vegetation corridors allow for real estate businesses to expand while ensuring that elephants’ habitats are not fragmented, it addresses the intractability of the issue. Furthermore, using beehive fencing provides an extra measure of security for farmers in case an elephant does come looking for a sweet treat to eat. Beehives also provide additional streams of revenue in the forms of honey and honeycomb production, bolstering the agricultural sector of the Indian economy.

Taken together, the solutions allow banana farmers to avoid waking up and finding their entire farm torn to shreds and further encourage them to respect elephants. The elephants themselves are one of the most affected stakeholder groups, essential to both biodiversity and culture. They need to be protected at all costs.

Proposed vegetation corridor for elephants in Kerala, a region famous for coconut tree farming.

DISCUSSION QUESTIONS

1. What initiatives would you suggest to disincentivize people from expanding into protected vegetation corridors?

2. Given that India’s declining bee population might be a significant roadblock to implementing this solution, can you think of an alternative approach?

1 Subramaniam, Hari. Firsthand experience from a farm owner. 3 March 2023. Personal Interview.

2 “Banana Production by Country 2023.” World Population Review, 2023, worldpopulationreview.com/country-rankings/banana-production-bycountry.

3 Caro, Luis Pinado. “Wages and working conditions in the banana sector: The case of Costa Rica, Ethiopia, India, Indonesia, and Viet Nam.” ILO Background Note, 2020, https://www.ilo.org/wcmsp5/groups/public/--ed_protect/---protrav/---travail/documents/projectdocumentation/ wcms_765133.pdf.

4 Kalam, Tamanna, et al. “Lethal Fence Electrocution: A Major Threat to Asian Elephants in Assam, India.” BioOne Complete, SAGE Publishing, 2020, https://bioone.org/journals/tropical-conservation-science/volume-11/ issue-1/1940082918817283/Lethal-Fence-Electrocution--A-MajorThreat-to-Asian-Elephants/10.1177/1940082918817283.full.

5 Rangarajan, Mahesh, et al. “Gajah. Securing the Future for Elephants in India.” The Report of the Elephant Task Force, Ministry of Environment and Forests, 31 August 2010, https://www.environmentandsociety.org/ sites/default/files/key_docs/Gajah.pdf.

6 Kalam.

7 “Indian Elephant.” WWF, World Wildlife Fund, 2023, https://www. worldwildlife.org/species/indian-elephant.

8 Ramesh, Randeep. “India to Investigate Rising Elephant Death Toll.” The Guardian, Guardian News and Media, 30 October 2009, https://www. theguardian.com/environment/2009/oct/30/india-elephant-death-toll.

9 Subramaniam.

10 “Wild Elephant Kills Senior Forest Officer in India.” Xinhua, 3 March 2018, http://www.xinhuanet.com/english/2018-03/03/c_137014010.htm.

11 “Beehive Fence.” Elephants & Bees, 30 July 2019, https://elephantsandbees. com/beehive-fence.

12 Nuwer, Rachel. “A Sting Operation to Save Elephants, with No Stings.” The New York Times, 27 March 2023, https://www.nytimes.com/2023/03/27/ science/elephants-bees-buzzbox.html.

13 Hickok, Kimberly. “Africa’s Largest Mammal Is Terrified of This Tiny Insect.” LiveScience, Purch, 26 July 2018, https://www.livescience. com/63177-honeybee-pheromones-repel-elephants.html.

14 “Are Elephants Afraid of Bees? - Kariega.” Safari Lodge South Africa Eastern Cape, 11 May 1970, https://www.kariega.co.za/blog/areelephants-afraid-of-bees.

15 “Beehive Fence.”

16 Shahbandeh, M. “Beehive Numbers by Leading Countries Worldwide 2020.” Statista, 19 January 2023, https://www.statista.com/statistics/755243/ number-of-beehives-in-leading-countries-worldwide.

17 Chhabra, Shruti. “The Beekeepers - Times of India.” The Times of India, TOI, 19 January 2011, https://timesofindia.indiatimes.com/business/ india-business/the-beekeepers/articleshow/7317184.cms.

18 Dotto, Carlotta, and Rhea Mogul. “How India’s Population Exploded to Overtake China’s and What’s Next.” CNN, Cable News Network, 10 July 2023, www.cnn.com/2023/04/28/asia/india-population-overtakes-chinagraphics-intl-hnk-dst-dg/index.html.

19 “Right of Passage: National Elephant Corridors Project.” WTI, 13 December 2022, https://www.wti.org.in/projects/right-of-passagenational-elephant-corridors-project.

20 Ibid.

21 Gupta, Avni. “Understanding Crop-Raiding by Elephants in India.” Wildlife SOS, 30 March 2023, https://wildlifesos.org/elephant/understandingcrop-raiding-by-elephants-in-india.

22 “The 5 Largest Honey-Producing Countries in the World.” HoneySource, 6 February 2023, https://www.honeysource.com/the-5-largest-honeyproducing-countries-in-the-world.

23 “Asian Elephants vs African Elephants Krabi Elephant House Sanctuary.” Krabi Elephant House Sanctuary, 2022, https:// krabielephanthousesanctuary.com/asian-elephants-vs-african-elephants.

24 Krishnan, Pramila. “India Bee Populations Are Collapsing under Environmental Strain.” Climate Home News, Climate Home, 22 February 2016, https://www.climatechangenews.com/2016/02/22/india-beepopulations-are-collapsing-under-environmental-strain.

Photo Credits:

■ Mat Hayward/AdobeStock—page 30

■ All photos taken by Vihaan Hari—pages 32, 33, 34

VIHAAN HARI CLASS OF 2026, MAJORING IN FINANCE

“I think the most surprising part of my research was seeing how many different past solutions were tried. For example, I saw the use of firecrackers, poppers, walls, and even forest rangers being used to deter elephants from entering the farms. I think the most rewarding part of my research was creating my own solution and addressing the limitations it may have come with. This gave me a sense of completion knowing I found a possible solution to a problem I have been writing about for months.”

A New Whey to Repurpose Food Waste Acid as an Asset:

By Aaron Glassman

AUTHOR AARON GLASSMAN DISCUSSES HOW REPURPOSING ACID WHEY—A BYPRODUCT OF YOGURT-MAKING—COULD PROVIDE BENEFITS FOR PRODUCERS AND CONSUMERS OF PROCESSED MEATS.

From breakfast sandwiches to hot dogs, sausages have become a staple of American diets.

While these processed meats are enjoyed by 75 percent of Americans for their fatty, salty, and spicy flavor,1 there is growing concern over their health effects. With high levels of saturated fats and cancercausing chemicals, sausage is falling out of favor with an ever growing health-conscious consumer base. At the same time, lactic acid bacteria is an effective organic preservative with more associated benefits and fewer dangers than preservatives currently used in processed meat products.2 Sausages made utilizing lactic acid bacteria could appeal to consumers avoiding processed meats due to longand short-term health concerns.

Despite the positive characteristics of lactic acid bacteria, tons of acid whey containing this metabolic product is disposed of every year by yogurt producers.3 My business solution is to act as a middleman, taking waste acid whey from yogurt producers and bringing it to sausage makers. They can then use it as a preservative to make their sausages more appealing to health-conscious consumers. This proposition would result in boosted profits for corporations, a healthier population, and reduced pollution in the environment.

THE PROBLEM OF ACID WHEY DISPOSAL

The disposal of acid whey has been the bane of many yogurt producers. Greek yogurt consumption in the United States of America has gone up every year from 2000 to 2013 and has held steady since then.4 While it remains popular, the process of Greek yogurt production is wasteful. The yogurt’s creamy consistency is achieved by straining out milk solids, creating two to three kilograms of liquid acid whey byproduct for every kilogram of yogurt.5

Of the two varieties of liquid whey generated through dairy processing,

acid whey is very different from its more desirable counterpart sweet whey, though the two are easily conflated. Sweet whey is a separated byproduct from hard cheese production and is high in protein, leading to its use in nutritional powders and health bars across the world. Acid whey is much lower in protein content but still rich in other natural compounds, such as lactate, which has preservative properties.6 Despite this potential, companies have not yet found a viable use for their acid whey byproduct and pay for its disposal.7 The use of acid whey as a preservative in sausages offers a market solution that would minimize this waste.

CURRENT SOLUTIONS ARE COSTLY AND LACK SCALABILITY

Current disposal methods for acid whey cannot be scaled and incur large expenses for yogurt companies. The general practice of yogurt companies is to pay outside parties, mainly farmers, to dispose of acid whey through landspreading or anaerobic digestion.8 Landspreading, exactly as it sounds, is the process by which farmers treat their land with an acidic liquid. While the whey has nutritional value for the soil, the amount has to be limited. Too much can be harmful to the soil and can wreak havoc on marine ecosystems if

introduced into a nearby water source through rainfall.9

Anaerobic digestion is the process by which microbes break down food waste to create methane gas. This process presents an effective use for acid whey, but disposal still comes at a financial cost to the yogurt companies.10 My solution would be scalable, lower cost, and, when used as a sausage preservative, would keep acidic waste out of ecosystems.

Currently, acid whey is viewed more as a “bad” than as a good; it is of negative value to the yogurt companies. One company that has looked at it as a “good” is the Spare Food Co. They partnered with The White Moustache, a small Greek yogurt company based in Brooklyn, to make beverages called Spare Tonic out of acid whey “waste.”11 While this approach is related to my proposal in that it is product-based, the market for acid whey beverages is smaller than that of sausage. Further, the Spare Tonic product sells for a high price of $ 4.99 for a 12-ounce can12 and is only available online or in high-end boutique grocery stores.13 Current market solutions such as Spare Tonic have a limited customer base due to product and price. In my proposed solution, acid whey waste would go from one large company to another through a middleman, allowing all three parties to reap economic benefits.

“

...healthier

sausages would mean fewer diet-related diseases…”

ACID WHEY IS A MORE THAN EFFECTIVE NITRATE REPLACEMENT

My solution would allow sausage companies to reach a health-focused demographic due to acid whey’s ability to create more nutritious sausages without sacrificing the characteristic qualities of the product.

Currently, sodium nitrate and potassium nitrate are the preservatives most commonly used in meat processing.14 Nitrates have a trifecta of reasons for claiming this top spot, but they serve as a double-edged sword health-wise. Nitrates are highly effective in killing bacteria, keeping the meat a bright red color, and adding a salty flavor to the sausage.15 These improvements in shelf life, appearance, and taste are all strong points, but nitrates have a well-documented dark side. Under harsh conditions, such as the high heat required to cook a sausage, nitrates in meat products turn into nitrites.16 These chemicals react with acids in the stomach to create nitrous acid, which can then react with amines to form nitrosamines.17 According to the Journal of Food and Agriculture, these nitrosamines are carcinogenic chemicals that are harmful in any quantity and are especially toxic for babies.18

Because of these known side effects, the majority of people in the regions of Europe, North America, Latin America, Asia-Pacific, and Africa/ Middle East avoid artificial preservatives in food products.19 In a study conducted by the Pew Research Center, 78 percent of US adults believe that artificial preservatives cause health risks.20 Without these health concerns, consumers would likely be more inclined to purchase preserved meats, resulting in both a healthier population and more sales for sausage companies. While acid whey lacks protein, it makes up for it as a preservative. Its chemical properties allow it to

function much in the same way that nitrates do but without the carcinogenic ramifications. Sausages preserved with acid whey can be stored for up to 30 days while refrigerated.21 In addition, acid whey protects against iron loss, keeping the sausages the same characteristic bright red as nitrates do.22 Acid whey doesn’t impart the same salty flavor of nitrates, but when sodium chloride is added, the taste difference is insignificant. The data proves that acid whey can contend with nitrates in all of its strong areas.23

Beyond just filling the role of nitrates as a preservative, pigment retainer, and flavoring agent, acid whey contributes additional nutritional value to the sausages. The antioxidant activity of acid whey when added to meat, creates polyunsaturated fat and CLA isomers.24 Unlike saturated fats, polyunsaturated fats are known as healthy fats and are deemed better for the heart.25 CLA isomers have been found to be effective in regulating body weight by boosting lipid metabolism and amplifying the effectiveness of insulin production in those with type 2 diabetes.26 Further, the benefits of acid whey as a replacement for nitrates have been scientifically demonstrated in sausages made from beef,27 pork,28 and even deer.29 Sausages made with acid whey contribute to healthier ingredients, creating a much more consumer-friendly product than those made with potentially cancer-causing chemicals. Losing the nitrates also means that compliant sausages can be labeled, “organic,” while the addition of polyunsaturated fats and CLA isomers only amplifies its marketability.

BUSINESS MODEL PROPOSITION

My proposed business model is to act as a middleman between the yogurt and sausage producers. I would take acid whey waste from yogurt production areas then sell and

subsequently transport it to sausage production plants to be used as a preservative. Since yogurt companies would pay to dispose of their waste and sausage companies would pay to acquire the whey, I would have revenue streams from both sides and a negative cost of goods sold. By working at scale with large companies, I would be able to keep the cost of acid whey low and charge less than farmers currently do for disposal. This solution would effectively turn a waste product into a desirable consumer good while economically benefiting yogurt producers, sausage producers, and my new company.

With this business model, costs would include refrigerated trucks equipped to transport the product, gas, and drivers. Yogurt companies would reduce their expenses by paying less for acid whey disposal while sausage companies would increase revenues with a product that can reach an untapped demographic of healthconscious consumers, boosting the net income of both producers. Beyond monetary factors, the general health of society would increase as people could switch from nitrate-preserved sausages to the acid whey alternative. This shift would remove carcinogenic nitrates from the diets of many, replacing them with the polyunsaturated fats and CLA isomers produced by the acid whey’s microbial activity. In addition, environmental health would be bolstered as some landspreading would be offset, reducing the danger of acid whey making its way into marine ecosystems. Value would be created for numerous stakeholders with this proposed market solution.

One valid concern is that sausages made with acid whey would have to be made using separate equipment for consumers wishing to avoid dairy for allergy-related, religious, or preference-based reasons. Given this caveat, acid whey sausages wouldn’t

completely replace nitrate-treated sausages; they would just serve as a healthier alternative. The cost of acid whey as a preservative would not be a problem, but sausage producers would have to rededicate old equipment or buy new for the production of dairybased acid whey sausages. Still, the release (and marketing) of an acid whey sausage product could potentially decrease the demand for the original nitrate sausages. If so, sausage producers could use less equipment for the production of the original and repurpose the vacated hardware to produce the newer product.

CONCLUSION

Much of human evolution has been driven by one thing: the primal

and visceral urge to find something to eat. Without food, we would become weak, sick, and in danger of starvation. In modern times, this problem has been flipped on its head as now some of society’s biggest problems are caused by the overabundance and overconsumption of food. Today, about a third of all food is wasted30 while millions of Americans die every year from diet-related diseases such as diabetes.31

Though this proposition is small in the grand scheme of things, it is a step in the right direction in both areas. Whey sausage addresses the problem of food waste and the epidemic of illness stemming from what we eat. Food waste would be lessened with a byproduct being turned into a good,

DISCUSSION QUESTIONS

while healthier sausages would mean fewer diet-related diseases: reducing the risk of cancer, boosting lipid metabolism, and delivering healthy fats. Studies have even found that the use of acid whey is effective in preserving other meats such as bacon,32,33 another one of America’s favorites. This market-based solution can increase profits for corporations and drive positive externalities for society and the environment.

1. As you read, do you think you might be a customer for either “Spare Tonic” or whey-preserved sausage? Why or why not?

2. While the author suggests he would happily act as a “middleman,” what other lucrative business roles might he take within the supply chain?

1 Statista Research Department. “U.S.: Consumption of Sausages 2020.” Statista, 23 June 2022, www.statista.com/statistics/279998/ushouseholds-consumption-of-sausages.

2 Wójciak, Karolina Maria, and Zbigniew Józef Dolatowski. “Evaluation of Natural Preservatives in Combination with Acid Whey for Use in Fermented Sausage.” Scientia Agricola, Escola Superior de Agricultura “Luiz de Queiroz,” Mar. Apr. 2016, www.scielo.br/j/sa/a/ s5HyfGswZxh9CzJN6kSQWWQ/?lang=en.

3 Erickson, Britt E. “Acid Whey: Is the Waste Product an Untapped Goldmine?” Chemical & Engineering News, American Chemical

Society, 28 Mar. 2023, cen.acs.org/articles/95/i6/Acid-whey-wasteproduct-untapped.html.

4 Statista. “U.S. Yogurt per Capita Consumption 2021.” Accessed May 6, 2023, www.statista.com/statistics/184309/per-capita-consumptionof-yogurt-in-the-us-since-2000.

5 Erickson.

6 Miller, Nicole. “Center for Dairy Research Turns Yogurt Waste into New Products.” News, 6 Mar. 2015, news.wisc.edu/center-for-dairyresearch-turns-yogurt-waste-into-new-products.

7 Ibid.

8 Ibid.

9 Ketterings, Quirine, Karl Czymmek, Sanjay Gami, Greg Godwin, and Kevin Ganoe. “Guidelines for Land Application of Acid Whey.” Cornell University, 23 Feb. 2017, nmsp.cals.cornell.edu/publications/ files/AcidWheyGuidelines2017.pdf.

10 Miller.

11 “Spare Tonic.” The Spare Food Co., www.sparefood.com/toniccollection. Accessed 17 Nov. 2023.

12 Spare Food Lemon & Ginger Spare Tonic - Instacart, www.instacart. com/products/26412526-spare-food-lemon-ginger-spare-tonic-12-floz. Accessed 18 Nov. 2023.

13 “Spare Tonic.”

14 Efenberger-Szmechtyk, Magdalena, et al. “Plant Extracts Rich in Polyphenols: Antibacterial Agents and Natural Preservatives for Meat and Meat Products.” Critical Reviews in Food Science and Nutrition, vol. 61, no. 1, 11 Feb. 2020, pp. 149–178, doi.org/10.1080/ 10408398.2020.1722060.

15 Karwowska, Małgorzata, and Anna Kononiuk. “Addition of Acid Whey Improves Organic Dry-Fermented Sausage without Nitrite Production and Its Nutritional Value.” International Journal of Food Science & Technology, 15 Sep. 2017, 53, no. 1, 246–53. ifst. onlinelibrary.wiley.com/doi/10.1111/ijfs.13580.

16 Silva, Maria Manuela, and Fernando Lidon. “FOOD PRESERVATIVES – AN OVERVIEW ON APPLICATIONS AND SIDE EFFECTS.” Emirates Journal of Food and Agriculture, 7 Jan. 2016, pp. 366–73, doi.org/10.9755/ejfa.2016-04-351.

17 Ibid.

18 Ibid.

19 Statista. “Artificial Preservatives: Avoidance among Consumers Worldwide by Region 2016.” Accessed May 6, 2023, www.statista. com/statistics/868660/global-consumers-avoiding-artificialpreservatives-by-region.

20 Funk, Cary, et al. “Public Perspectives on Food Risks.” Pew Research Center Science & Society (blog), November 19, 2018, www. pewresearch.org/science/2018/11/19/public-perspectives-on-foodrisks.

21 Wójciak.

22 Karwowska.

23 Ibid.

24 Ibid.

25 Siri-Tarino, Patty W., Sally Chiu, Nathalie Bergeron, and Ronald M. Krauss. “Saturated Fats Versus Polyunsaturated Fats Versus Carbohydrates for Cardiovascular Disease Prevention and Treatment.” Annual Review of Nutrition, vol. 35, no. 1, 17 Jul. 2015, pp. 517–43, doi.org/10.1146/annurev-nutr-071714-034449.

26 Belury, Martha A., et al. “The Conjugated Linoleic Acid (CLA) Isomer, T10c12-CLA, Is Inversely Associated with Changes in Body Weight and Serum Leptin in Subjects with Type 2 Diabetes Mellitus.” The Journal of Nutrition, vol. 133, no. 1, Jan. 2023, pp. 257S–260S, www.sciencedirect.com/science/article/pii/ S0022316622155859?via%3Dihub.

27 Karwowska.

28 Wójciak.

29 Kononiuk, Anna D., and Małgorzata Karwowska. “Comparison of the Effect of Freeze-Dried Acid Whey on Physicochemical Properties of Organic Fermented Sausages Made from Beef and Fallow Deer Meat.” Journal of Food Science and Technology, vol. 57, no. 5, May 2020, pp. 1753–62, doi.org/10.1007/s13197-019-04208-4.

30 “5 Facts about Food Waste and Hunger.” World Food Programme, 2 June 2020, www.wfp.org/stories/5-facts-about-food-waste-andhunger.

31 Mayne, Susan. “Improving Nutrition to Turn the Tide on Diet-Related Chronic Disease.” U.S. Food and Drug Administration, FDA, 24 Mar. 2022, www.fda.gov/news-events/fda-voices/improvingnutrition-turn-tide-diet-related-chronic-disease.

32 Okoń, Anna, Piotr Szymański, Dorota Zielińska, Aleksandra Szydłowska, Urszula Siekierko, Danuta Kołożyn-Krajewska, and Zbigniew J. Dolatowski. “The Influence of Acid Whey on the Lipid Composition and Oxidative Stability of Organic Uncured Fermented Bacon after Production and during Chilling Storage.” Antioxidants, vol. 10, no. 11, Nov. 2021, p. 1711, doi.org/10.3390/antiox10111711.

33 Shakil, Mynul Hasan, Anuva Talukder Trisha, Mizanur Rahman, Suvro Talukdar, Rovina Kobun, Nurul Huda, and Wahidu Zzaman. “Nitrites in Cured Meats, Health Risk Issues, Alternatives to Nitrites: A Review.” Foods, vol. 11, no. 21, 25 Oct. 2022, p. 3355, https://doi. org/10.3390/foods11213355.

Photo Credits:

■ Кристина Корнеева/AdobeStock—page 36

■ zi3000/AdobeStock—page 38

■ fudio/AdobeStock—page 40

AARON GLASSMAN CLASS OF 2026, MAJORING IN BUSINESS

“I got the idea for this paper from learning about waste in the food industry in an elective Food Systems class. We had specifically gone over acid whey, so I did some research and found out it was viable as a preservative. My dream is to work within the intersection of sustainability, food, and business.”

POWERING INDIA WIRELESSLY:

SPACE-BASED SOLAR INFRASTRUCTURE

By Moksh Jain

With India’s rapid technological expansion, including successes in space and on Earth, the country is solidifying itself as a global powerhouse. Yet, its energy infrastructure lags in scope and scale – to the detriment of its citizens. Author Moksh Jain proposes a solution to help India derive solar power wirelessly transmitted from space.

Screams pIerced the ears of Dadasaheb Vidhate as a fire engulfed his thatched-roof hut in rural India, trapping three of his children inside. “My children were burned alive before my eyes,” says Vidhate. The tragedy was a result of an overturned kerosene lamp–a lamp that Vidhate’s family had to rely on because their home was not connected to the power grid.1

India is a land of diverse cultures, traditions, and religions that have coexisted for centuries. It is a country steeped in history, with ancient ruins, grand temples, and majestic palaces serving as a testament to its rich heritage. However, India is not just defined solely by its past glory. It is rapidly emerging as a global technological powerhouse. From artificial intelligence and blockchain to biotech and renewable energy, India is at the forefront of the latest technological advancements. Yet millions of its inhabitants live in abject poverty, lacking even basic amenities like reliable electricity. Fires from kerosene lamps are far more common than they should be, claiming lives and

causing untold suffering for families like Vidhate’s.

the probleM

Despite its many achievements, India is facing a critical issue that puts its future at risk – the power crisis. India’s energy demands are skyrocketing due to rapid urbanization, a growing economy, and a current population of over 1.4 billion people on the rise. While Indian households have increased electricity use by 50 times since 1971,2 the country’s power and distribution infrastructures are struggling to keep up. In April 2022, unexpected heatwaves caused power cuts and outages across the country, with two in three households reporting outages and one in three households experiencing outages of two or more hours a day.3 Critics blame coal stocks, said to have been critically low at 108 of India’s 173 power plants, requiring thousands of canceled passenger trains to instead carry coal to plants starved of fuel.4 But regardless of their cause, energy shortages derail domestic life and ongoing commerce, including travel, manufacturing, and overall GDP.

In fiscal year 2016 alone, power sector distortions in India were estimated to cost US $86.1 billion (or 4.1 percent of GDP).5

In 2021, India reached the milestone of 100 percent of its population having access to electricity.6 Nevertheless, upon closer examination of what constitutes “access to electricity,” India still has a long way to go. The Government of India defines a village as electrified if, “basic infrastructure such as distribution transformer and distribution lines are provided in the inhabited locality…[where] electricity is provided to public places like schools, health centers, community centers, etc.,” and if, “the number of households electrified [is] at least 10 percent of the total number of households in the village.”7 While only 10 percent of the total village households need to be electrified for the area to be considered electrified, in reality, only 8 percent of villages in India have 100 percent household connectivity.8

The United Nations’ 7th Sustainable Development Goal focuses on affordable and clean energy, aiming to “ensure access to affordable, reliable,

sustainable and modern energy for all.”9 In India, nearly 304 million people, or approximately 22 percent of the population, still lack reliable access to electricity.10 As the Indian population continues to grow, it must find a longterm solution to its failing power and distribution infrastructures.

the solution

What if it were possible to power India wirelessly? Wireless power transmission (WPT) was first conceptualized by Nikola Tesla, an Austrian-born, American inventor, in the late 19th century. Tesla envisioned a “World Wireless System” that could transmit both electricity and information wirelessly. However, the project was abandoned due to financial difficulties.11 While it may seem like a utopian ideal for the distant future, a partnership between SpaceX and the nascent energy company Emrod could be the key to solving India’s power crisis.

Elon Musk’s SpaceX was originally founded with the aim of reducing space transportation costs and enabling Mars colonization, but it could also play a critical role in powering India

wirelessly through a Starlink-like infrastructure. Starlink is a satellite constellation in Low Earth Orbit (LEO) that provides internet access to users worldwide. New Zealand-based startup Emrod, founded by Greg Kushnir, aims to commercialize WPT by converting electricity into electromagnetic energy to overcome the problem of electricity’s inability to travel long distances through air.12

To address India’s power crisis with wireless solar power from space, SpaceX should acquire Emrod for its WPT technology and integrate it with its future Starlink satellites. Emrod currently has an estimated value of $4.11 million,13 which is low considering the potential of its technology. By integrating Emrod’s technology, satellites will be able to serve two purposes – as solar-energy collectors and communication devices. The proposed satellite fleet would operate similarly to the current Starlink satellites that relay radio waves from low Earth orbit to ground stations. However, in addition to transmitting information, these satellites would also convert collected solar energy into lasers that would be beamed to

ground receivers of just 5 meters in diameter.14 According to Department of Energy estimates, a satellite in Low Earth Orbit (LEO) would be capable of producing about 1-10 megawatts (MW) of power.15 To put that into perspective, 1 MW can handle the demand of 750 homes.16

The idea of a space-based energy infrastructure is not new. It was first introduced by Russian theorist Konstantin Tsiolkovsky in 1923.17

Yet despite decades of research and experimentation, researchers have consistently found that high launch costs make space-based energy infrastructure economically infeasible, even though space-based solar power is based on existing technological principles and physics.18 Recent technological advances, however, have led to a decrease in worldwide launch costs. Costs to launch into LEO for medium-sized payloads have fallen from $17,900/kg in 1966 with Russia’s Soyuz rocket to $2,600/kg in 2023 with SpaceX’s Falcon 9 rocket.19 According to Elon Musk, SpaceX’s latest rocket under development, Starship, could further lower launch costs to under $100/kg.20

According to the International Energy Agency, terrestrial solar energy is now the “cheapest source of electricity in history,”21 so why go through the trouble of going to space for solar power? Because while solar power on Earth is good, solar power in space is great. About 30 percent of all solar energy is reflected into space by the Earth’s atmosphere, and every night we are left completely in the dark.22 India’s significant air pollution further reduces the amount of solar radiation reaching solar panels. A study by IIT Delhi, published in Environmental Research Letters, estimated that India lost 29 percent of its solar energy potential between 2001 and 2018 due to atmospheric pollution, equivalent to an annual loss of $835 million.23

In contrast, space offers an ideal location for solar power generation due to the absence of atmosphere, pollution, and “nighttime.” It is estimated that a single solar power satellite in LEO could produce the same amount of power as 3,000 solar panels on Earth.24 Moreover, space-based solar infrastructure eliminates the need for energy storage as the Sun provides a constant stream of radiation that can be beamed down to Earth on demand. Additionally, with ground-based receivers only 5 meters in diameter, power transmission to rural areas of India becomes easier, especially where traditional power grid infrastructure is outdated or failing.

Consider SpaceX’s position as a leader in the commercial space transportation industry; with its reusable, low-cost, reliable rockets, and its successful Starlink project, the company is in an excellent position to provide India with space-based solar power. This solution addresses the primary causes of the power crisis in India, which include failing distribution channels, an unreliable power grid, and a lack of sufficient energy storage systems, while also promoting the use of renewable energy sources and bringing India closer to meeting its carbon neutrality goal by 2070.

“

What if it were possible to power India wirelessly?”

Acquiring Emrod may have a relatively low cost, but SpaceX would still need to incur significant expenses in developing a new version of its Starlink satellites that integrate WPT technology. This innovation would involve testing, manufacturing, and distribution of technology in both space

and on Earth. Yet despite these R&D costs, there are still compelling reasons for SpaceX to consider acquiring Emrod.

fAilures of current ApproAches

The Indian government has been tackling the issue of power dysfunction with short-term solutions instead of addressing the root of the problem. The government has pledged to increase coal production by 100 million metric tons over the next three years by reopening more than 100 coal mines that were previously considered financially unsustainable.25 These solutions, announced as temporary, remain unsustainable and do not address the failure of the electricity supply chain. This narrow focus on increasing coal production to reduce the energy deficit ignores the real drivers of India’s power crisis.

Furthermore, such an approach could slow down the country’s transition to clean energy, increase its carbon emissions, and lead to more frequent heat waves, thereby creating a never-ending cycle. By continuing with a coal-dominant approach, India risks increasing temperatures, growing energy costs, and more frequent outages.26 Given these realities, the Indian government needs to adopt a comprehensive approach that addresses the underlying issues of the electricity supply chain and transitions to renewable energy sources.

benefits to spAcex

The global renewable energy market was valued at around $972 billion in 2022 and is projected to grow to $2,026 billion by 2030, with a compound annual growth rate (CAGR) of 9.6 percent.27 This trillion-dollar market presents a significant opportunity for SpaceX to establish its dominance and shape the future of the energy industry. With the advantage of being a first mover and having existing expertise in space-based satellite infrastructure,

SpaceX stands to benefit immediately from acquiring Emrod. They will be able to establish strong brand recognition in this new industry before other entrants. Since transitioning to new energy sources quickly is challenging due to technology and compatibility issues, being the first to provide space-based solar power allows SpaceX to establish industry standards and customer loyalty. Moreover, having a first-mover advantage positions SpaceX to potentially become a monopoly in the market.

In addition, the increasing amount of space debris in Low Earth Orbit has become a growing concern due to the significant risk it poses to functioning satellites and spacecraft. Space debris can collide with objects in orbit, potentially damaging or destroying them. According to Bill Keeter, millions of pieces of space debris, weighing almost 6,000 tons, currently orbit the Earth, turning LEO into an orbital graveyard that has been referred to as the “world’s largest garbage dump.”28 Ironically, this designation may present a benefit to SpaceX’s Starlink.

Starlink, already in operation, might recondition its satellites to deliver space-based solar power. This first-to-market innovation puts them in an advantageous position. Other companies may be less incentivized to launch their own satellites due to the

sheer cost of the venture, Starlink’s existing business dominance, or other risks related to growing concerns about space debris. Subsequently, this lack of competition could potentially give SpaceX sole access to a trillion-dollar market and a global monopoly in providing space-based solar power.

In addition to the potential for SpaceX to dominate the spacebased solar power industry, their infrastructure and technology in this area could also have significant benefits for broader ambitions. SpaceX harbors the formidable goal of getting mankind to Mars. Having the infrastructure and technology for space-based solar power in place would exponentially speed up and reduce costs for SpaceX’s own goals. SpaceX could potentially develop an efficient and reliable power system for a Martian colony. This advance may reduce the need for expensive and heavy batteries, which would otherwise need to be transported from Earth, and make it possible to power critical infrastructure, such as life-support systems and communication equipment, from a distance.

risks AnD potentiAl MitigAtions

The biggest risk associated with having SpaceX provide space-based solar power to India is the fact that a

single, private company would control the country’s energy infrastructure. In this situation, SpaceX would have too much control over India’s energy security, which is risky for the country. Further, if SpaceX were to go bankrupt or face operational issues, India could be left without energy. Potential conflicts of interest exist between SpaceX’s profit-making motives and India’s goal of providing affordable and reliable energy. According to an article in The Seattle Times by Michael Hiltzik, the privatization of energy infrastructure could “drive up the cost of transmission by 26 percent to 44 percent.”29 To avoid such a situation, it would be best if India entered into a public-private partnership with SpaceX and (if possible) held a controlling stake to ensure the country’s energy security. India will also need to make further investments in other sources of renewable energy that can be used as a backup.

As mentioned, the high cost of developing and distributing spacebased solar power technology would present a significant risk. India’s economy, while rapidly growing, still faces significant financial constraints that may make it difficult to invest in such a large-scale project. India’s power distribution sector is currently $76.6 billion in debt.30 Undertaking such a project while already in debt may pose fatal problems for the country’s economy. Continuing to use short-term band-aid solutions, however, will only deepen the cost of India’s power crisis. If the solution proves successful, India would be able to justify the cost of the project as power distortions in India have cost the country over $86 billion.

Finally, it is important to note that implementing such a large-scale solution will take years to decades. The development, launch, and maintenance of satellites, and the distribution of energy across the country will require significant time and effort. However, space-based solar power is a more sustainable and suitable solution than

some of the other options that are currently in place. While it will take time to implement, the long-term benefits of space-based solar power will make it worthwhile.

expanding the power supply to 24 hours a day, rural household income could increase by $9.4 billion annually as eliminating power shortages can prevent businesses from losing $22.7

stAkeholDer benefits

Beyond the benefits to SpaceX, other stakeholders stand to gain from the implementation of space-based solar power in India. By providing electricity to India’s population and

billion a year.31 Coal-fired power generation, which currently powers the majority of India’s energy grid, has a significant negative impact on public health. The excessive health costs borne by the population of India

DISCUSSION QUESTIONS

due to coal-fired power generation are estimated at $35.9 billion a year,32 and there are approximately 82,900 deaths annually attributed to coal pollution.33 By reducing reliance on coal and other fossil fuels, space-based solar power would have numerous benefits for both the people of India and commercial businesses. It would improve economic growth, prevent power outages, and reduce health costs associated with current power generation methods.

Space-based solar power has the potential to be an innovative and transformative solution to India’s energy crisis. Although there are risks associated with privatization and challenges related to high R&D and distribution costs, the potential benefits to India’s economy, society, and environment cannot be overlooked. Improving India’s energy grid is crucial to eliminate power shortages, prevent business losses, reduce health costs, increase rural household income — and prevent tragedies like that suffered by Vidhate. Space-based solar power can pave the way for a sustainable future in India and perhaps the world.

1. Consider the importance of solar-generated wireless energy; what possible problems may surround this well-intentioned proposal?

2. While the author mentions some risks, what concerns might you have if SpaceX became the dominant player in this new market?

1 Singh, Rajesh Kumar, and Saket Sundria. “Living in the Dark: 240 Million Indians Have No Electricity.” Bloomberg.Com, 24 Jan. 2017, www.bloomberg.com/news/features/2017-01-24/living-in-thedark-240-million-indians-have-no-electricity#xj4y7vzkg.

2 Khosla, Radhika, and Aditya Chunekar. “Plugging in: A Collection of Insights on Electricity Use in Indian Homes.” ResearchGate,Dec. 2017, www.researchgate.net/publication/322791738_Plugging_

In_A_Collection_of_Insights_on_Electricity_Use_in_Indian_ Homes.

3 Biswas, Soutik. “Coal Shortage and Heatwave Spark India’s Power Woes.” BBC News, 8 May 2022, www.bbc.com/news/world-asiaindia-61330302.

4 Ibid.

5 Zhang, Fan. In the Dark: How Much Do Power Sector Distortions

Cost South Asia? World Bank Group, South Asia Development Forum, 2019, https://doi.org/10.1596/978-1-4648-1154-8.

6 IEA. “Energy Statistics Data Browser – Data Tools.” IEA, www.iea. org/data-and-statistics/data-tools/energy-statistics-data-browser?cou ntry=INDIA&fuel=Sustainable+Development+Goals&indicator=S DG71. Accessed 3 May 2023.

7“Definition of Electrified Village.” Welcome to DDUGJY, www. ddugjy.gov.in/page/definition_electrified_village. Accessed 3 May 2023.

8 Ibid.

9 “Goal 7 | Department of Economic and Social Affairs.” United Nations, sdgs.un.org/goals/goal7. Accessed 17 Nov. 2023.

10 Aayog, NITI. Draft National Energy Policy, 26 Sept. 2017, https:// www.niti.gov.in/sites/default/files/2022-12/NEP-ID_27.06.2017.pdf. pdf.

11 Jacobson, Rebecca, and Jordan Wirfs-Brock. “Ie Questions: Why Don’t We Have Wireless Electricity?” Inside Energy, 15 July 2016, insideenergy.org/2016/07/15/ie-questions-why-dont-we-havewireless-electricity.

12 “About: Emrod.” Emrod Energy, 23 Oct. 2022, emrod.energy/about.

13 Pitchbook Profile - Emrod, https://my-pitchbook-com.proxy.library. nyu.edu/profile/438037-12/company/profile. Accessed 1 May 2023.

14 Rubenchik, A. M., et al. “Solar Power Beaming: From Space to Earth.” Solar Power Beaming: From Space to Earth (Technical Report) | OSTI.GOV, 14 Apr. 2009, www.osti.gov/servlets/ purl/952766.

15 “Space-Based Solar Power.” Energy.Gov, www.energy.gov/articles/ space-based-solar-power. Accessed 19 Nov. 2023.

16 “Understanding Electricity.” California ISO - Understanding Electricity, www.caiso.com/about/Pages/OurBusiness/ Understanding-electricity.aspx. Accessed 3 May 2023.

17 “SBSP History.” ESA, www.esa.int/Enabling_Support/Space_ Engineering_Technology/SOLARIS/SBSP_history. Accessed 3 May 2023.

18 “SBSP Overview.” ESA, www.esa.int/Enabling_Support/Space_ Engineering_Technology/SOLARIS/SBSP_overview. Accessed 1 May 2023.

19 “The Annual Compendium of Commercial Space Transportation: 2018.” Federal Aviation Administration, Jan. 2018, www.faa. gov/about/office_org/headquarters_offices/ast/media/2018_AST_ Compendium.pdf.

20 Chang, Kenneth. “Highlights from SpaceX’s Scrubbed Starship Rocket Launch Attempt.” The New York Times, 20 Apr. 2023, w ww.nytimes.com/live/2023/04/17/science/spacex-starship-launch.

21 IEA. “World Energy Outlook 2020 – Analysis.” IEA, Oct. 2020, www.iea.org/reports/world-energy-outlook-2020.

MOKSH JAIN

“The idea for my paper emerged from a combination of my curiosity about different energy generation methods and my fascination with space technology. As I learned about India’s energy crisis, I saw an opportunity to merge these interests and explore a potential solution that could be applied globally.”

22 Cohen, Ariel. “How Space Lasers Could Soon Beam Clean Power Down to Earth.” Forbes, 29 Mar. 2021, www.forbes.com/sites/ arielcohen/2021/03/29/space-lasers-the-truth/?sh=25c9d46d6d46.

23 SciDev. “Air Pollution Dims India’s Solar Energy Potential.” Phys. Org, 31 Mar. 2022, phys.org/news/2022-03-air-pollution-dimsindia-solar.html.

24 “SBSP Overview.”

25 Anand, Nupur, and Sudarshan Varadhan. “‘Bad Boys’ Are Back: India Doubles Down on Coal as Heatwave Worsens Power Crisis.” Reuters, 6 May 2022, www.reuters.com/world/india/indialooking-boost-coal-output-by-up-100-mln-tonnes-reopen-closedmines-2022-05-06.

26 Kay, Jonathan. “A Heat Wave Has Pushed India’s Dysfunctional Power System into a Crisis.” Carnegie Endowment for International Peace, 12 May 2022, carnegieendowment.org/2022/05/12/heatwave-has-pushed-india-s-dysfunctional-power-system-into-crisispub-87122.

27 Next Move Strategy Consulting. “Renewable Energy Market by Type (Wind Power, Hydroelectric Power, Solar Power, Bio Energy, and Geothermal) and End User (Residential, Industrial, and Commercial) - Global Opportunity Analysis and Industry Forecast, 2022–2030.” Renewable Energy Market Size and Share | Analysis2030, Dec. 2022, www.nextmsc.com/report/renewable-energymarket.

28 “Space Debris.” NASA, 3 Nov. 2023, www.nasa.gov/headquarters/ library/find/bibliographies/space-debris.

29 Hiltzik, Michael. “Privatizing the Electric Grid Is a Bad Power Play.” The Seattle Times, 23 Feb. 2018, www.seattletimes.com/opinion/ privatizing-the-electric-grid-is-a-bad-power-play.

30 “DISCOM Debt Surges 24% to Rs 6.2 Lakh Crore in 2021-22.” The Economic Times, 11 Apr. 2023, economictimes.indiatimes.com/ industry/energy/power/discom-debt-surges-24-to-rs-6-2-lakh-crorein-2021-22/articleshow/99388414.cms.

31 “Power Sector Distortions Cost India Billions.” World Bank, 18 Dec. 2018, www.worldbank.org/en/news/feature/2018/12/17/new-reportpower-sector-distortions-cost-india-billions.

32 Zhang.

33 “Power Sector Distortions Cost India Billions.”

■ bravissimos/Adobe Stock—page 42

■ wowinside/Adobe Stock—page 44

■ Sundry Photography/AdobeStock—page 46

■ creativeshot/AdobeStock—page 47

■ Laughing Cat/AdobeStock—page 48

Photo Credits:

WHAT IS IN YOUR WALLET?

A Greener Future

by ANDREW BERUBE

The author Andrew Berube proposed that Capital One introduce a sustainability-oriented credit card that incentivizes customers to make sustainable choices.

As mIllIons of amerIcans wake up every day and turn on the TV, check social media, or read headlines in their favorite newspaper, they witness a crisis in action. Day after day, frightening headlines grace their screens, warning of a climate disaster, unfolding slowly but seemingly gaining traction with every passing moment. Reactions are mixed; a vocal minority deny the facts they bear witness to, while others decide that they want to help, to be on the right side of history by doing their part in solving the massive problem of environmental degradation.

Then, real life begins. The newspaper closes, the phone screen is turned off, and individuals are flung into tangible challenges: ones that they can see in front of them — unlike the slow-moving worldwide phenomenon of the morning news. According to CNN, an individual makes upwards of 35,000 decisions every single day,1 and dedicating significant effort to considering the environmental impact on a micro scale is a tall order. The solution: simplifying the decision to be sustainable.

Capital One has a unique opportunity to create impact, incentivize consumers, and do its part in addressing the climate crisis (described in United Nations SDG 13) through a new consumer-facing ecologically conscious financial product, an initiative that will secure economic profits for the firm, widespread societal benefit, and awaken consumers to their capability to positively affect environmental change.

THE HUMAN PROBLEM

In daily life, being environmentally conscious, no matter how important it is to an individual, is difficult. Whether due to higher monetary costs, frequently cited as a top reason for consumers not making more sustainable decisions,2 inconvenience, or simply not knowing how to help,

being a consistently green consumer is a hard sell for even the most concerned citizens. People who care and who actively want to make the right decisions may sense that taking on these challenges doesn’t always feel worthwhile.

Over time, Americans have become less optimistic about their individual impact, with a poll run by the University of Chicago showing that only 52 percent believe their actions impact climate change at all.3 This individual helplessness is part of the reason consumers may see environmental challenges as a responsibility reserved for corporate and government entities, who are generally viewed as being more capable of taking consequential action on these problems and being trusted to understand the intricacies of the climate crisis. All of these feelings are compounded by a lack of clarity over what being sustainable means, a “crippling vagueness,” as Harvard professor Geoffrey Jones described it when referring to a climate summit held by the UN in 2019.4

Yet, a lack of intention or care is far from the issue. A survey from Southern Cross University stated that 93 percent of cross-generational American and Australian respondents cited general concern for the environment, with 77

percent seeking out ways to live more sustainably.5 When solutions are put to the test, though, people understandably choose easier, more convenient routes. “Zero waste” lifestyles fully embrace the principles of environmental sustainability by minimizing the amount of waste created in daily tasks, using creative solutions like individual composting, careful recycling, reuse of glass materials, and more.6 Actions this burdensome, though, are rare, with only 15 percent of Americans even being familiar with the zero waste concept,7 and for obvious reasons, they’re seen as overly demanding within everyday life.

WHAT CAN BE DONE?

Our history has set up a perfect storm for individual climate inaction, fueled by resentment for large entities, perceived obstacles in participation and impact, and unclear definitions of what sustainable decision-making looks like. While solving specific environmental issues requires highly specific solutions, solving for overall consumer behavior raises a possibility of outsized impact without the need for costly technology. For this reason, my proposal is for Capital One, the fourth largest credit card issuer by volume in the United States,8 to introduce a new product offering called the Eco One Card, a sustainability-oriented

credit card that promises to create real, measurable impact by incentivizing sustainable customer choices.

Credit cards are a frictionless element of daily life, a product that individuals rarely think about (or need to think about) when using. Implementing a sustainable component to something that’s already second nature to most people means taking away the issue of inconvenience that surrounds existing solutions. Credit cards also participate in each step of the commerce process, meaning that regardless of what retailers or shops consumers interact with, they wield a tool to create environmental impact.

In creating an effortless method of getting involved in climate, the Eco One Card would be designed to serve as a supplemental force in the ongoing effort among commercial interests to address climate change — effectively taking a point in the transaction process that is net neutral and making it a net positive. Consumers would be given the opportunity to effortlessly contribute to global change, shifting from the inaction common in life today to a renewed commitment and capacity to make environmentally conscious decisions to create positive outcomes. Past efforts by financial services companies like MasterCard have been poorly marketed, have not included

significant incentive structures for end users, or have not been able to create tangible impact in the same ways as this Eco One Card. Their Carbon Calculator, for example, which seeks to inform consumers of the carbon output impacts of their purchases,9 is limited in scope; it has not been newsworthy or widely adopted. Meanwhile, card offerings like the Aspiration Zero card (now discontinued), funded tree planting to offset carbon emissions of purchases.10 Such efforts were too small in scope to offer the benefits associated with a large consumer bank like Capital One, such as branch access, customer support, and integration with existing banking products.

THE ECO ONE CARD

The core model of the card would be a standard cashback offering, a perk already offered by Capital One.11 The infrastructure for creating this sort of product should be straightforward to implement — though doing so within an Eco One strategy would require specific actions. I propose a card that pledges 1-, 2-, and 3-percent cashback rates to the customer, set by the level of sustainability of their purchase.

The retailer is measured using an internal database. Initially comprised of existing ESG metrics, the database would minimize the amount of

research and development needed for implementation. Later, more specific metrics will be selected to deliberately account for any misleading measures uncovered within ESG investing, opting to measure quantitative negative externalities such as greenhouse gas emissions rather than any amorphous indicators of social impact. This phenomenon has been pointed out by academics like Hans Taparia, raising questions about the gap between public knowledge of ESG and its practical meaning in the investment sector.12

Metrics covering existing corporate policies, estimated carbon output, and reported energy usage, all of which are available in existing sources like Refinitiv,13 can be used and weighed to make overall decisions, which would then be published for consumer review. Over time, the rate of cashback can be fine-tuned by both consumer feedback (a portal within the app would allow consumers to suggest higher return rates, for example) and by access to better data to align with the public’s growing understanding of sustainability. For example, a consumer guide from Our Good Brands suggests looking for certifications from organizations like GoodWeave, Fair Trade, and more,14 which can also be incorporated into the algorithm determining the cashback rate. For

unknown businesses, a predetermined default cashback rate can be applied until further information becomes available.

Cashback credit cards are profitable for card issuers due to merchant fees and interest balances, so no annual fee would be necessary for the card despite its benefits and commitment to sustainable consumption.

In addition to the baseline cashback offering, Capital One would also seek out deliberate corporate partnerships with retailers publicly committed to the environment. Approaching small and large brands and taking applications from brands interested in demonstrating their commitment would mean that Capital One could potentially negotiate higher cashback rates in affiliate marketing programs like those already used for their product Capital One Shopping.15 Brands like Patagonia, which already have clear environmental initiatives, would be optimal targets for initial outreach, as associations between favorably viewed corporations would strengthen the branding of Eco One. Establishing high cashback rates would further incentivize consumers who want to make the right choice but worry that it’s not monetarily viable to do so.

This initiative would create a twosided incentive program for an overall commitment to the core values of the card, meaning businesses would be more likely to adopt sustainable practices to attract cardholders and Capital One would be more willing to promote companies to their customers. Consumers could also be allowed to use their cashback to donate to specific causes at an enhanced rate, like Greenpeace for example, where the reward cash they’ve earned could be boosted by 5 percent when donated to partner charities. Capital One can take on this sort of expense, as 5 percent of the small 1-3 percent rates are marginal. Finally, the card itself would be made of biodegradable material, meaning at the end of its life cycle, there would be no environmental harm

caused by the physical card itself.

WHY CAPITAL ONE?

Capital One’s commitment to ESG and other social initiatives has been public yet difficult to notice for the average consumer. Despite the company’s record-high marketing spend in 2021,16 the brand’s commitment to sustainability detailed in its ESG reports17 isn’t something commonly attributed to the company as much as its, “What’s in your wallet?” slogan or its sponsorship of March Madness. In creating this card, which itself aligns with Capital One’s existing priorities, the bank can become the leading name in the financial space by communicating a clear stance on its environmental priorities. According to a corporate advisor, Global Risk Regulator, 93 percent of current consumers expect environmentally conscious financial institutions to become the norm in the future,18 and

Capital One has the opportunity to obtain a market advantage early on.

Creating a card line and not simply adding features to existing products is deliberate, as it allows for a new form of conspicuous consumption with the chance for consumers to show off their goodwill and environmental commitment to their friends and family. According to McKinsey & Company, almost 40 percent of American consumers already want to enroll in a climate-focused financial product,19 and creating a subtle social pressure to do so would mean more gradual adoption and potentially more customer acquisition.

Because of its existing product offerings and its cemented role in the space, Capital One has a unique opportunity to take control of the green financial product market in a way that creates shared value. According to Porter and Kramer, the theory of societal benefit as an unwanted

“

...THE ECO ONE CARD SOLVES A SMALL PROBLEM WITH LARGE IMPLICATIONS...”

economic cost is antiquated,20 and escaping this designation is pivotal to achieving the social changes consumers want to see. As existing solutions may largely be considered greenwashing,21 market dominance in the green card space presents a lucrative opportunity for an established bank with an existing network of merchants and the resources to execute.

STAKEHOLDER BENEFITS

Despite simply being another piece of plastic in a wallet, Eco One has the potential to create a massive positive impact on cardholders, businesses, and the public alike. A well-functioning virtuous cycle created by the Eco One Card would include each of these groups. Cardholders themselves stand to benefit from a high-quality product offering, which simultaneously provides them with great benefits and a sense of positive impact. Consumers gravitate first towards products that benefit them, and then towards products that benefit the environment, with a small percentage being willing to forego one for the other.22 The Eco One Card would attract these customers while simultaneously doing good by moving behaviors to include more careful and thoughtful consumption. Capital One may take over the financial services customer base dedicated to social impact, leveraging

this product offering as a driver of economic profits and revenue generation. Outside businesses can benefit greatly from collaboration with a brand as large as Capital One, which could increase public attention and attract new customers. Likewise, their sustainability efforts, which may increase costs, would be partially offset by a unique product. Meanwhile, the world at large stands to benefit from a more thoughtful consumer base, enabled by the card and encouraged by a trend associated with the thoughtful decisions it enables.

IMPLEMENTATION

The rollout of a product like Eco One would be resource intensive, as is any credit card rollout for a brand as large as Capital One. According to data from 2017, the bank makes approximately $206 per cardholder per year,23 meaning a marketing rollout that consumes 30 percent of Capital One’s general marketing spend, a total of US$861 million,24 would require 4.2 million cardholders to break even. This expense would be in addition to product development, research, go-tomarket, and other administrative costs required to launch a new product line in the highly regulated financial services sector, though much of this process would be simplified by the fact that Capital One is an existing player and

not a new entrant.

An important feature of the card, which would allow users to track their environmental impact through their online accounts, would require collaboration with existing companies to research corporate usage of materials, carbon output, and more — which will be costly and time-consuming. Such analysis, however, creates potential for future collaboration on card offerings and an added selling point for skeptical customers who will appreciate the commitment to accurate information. It offers the opportunity to empower individuals by reinstating a sense of individual achievement that many feel they have lost in recent years.25

POTENTIAL COSTS/RISKS

Environmentalism and social good are sometimes unpopular, especially in relation to money and financial services. Recent controversies surrounding ESG investing have plagued the investment and private equity scene, where some state governments have divested firms prioritizing ESG risk in their investment theses.26 Capital One faces the potential risk of alienating certain existing customers by launching a product like this, whether because of being too committed or by not being committed enough. Should a product

launch be labeled greenwashing, the card could end up harming the bank’s reputation associated with climate and ESG. For this reason, it’s important to stay engaged with stakeholders and experts throughout the development process, frequently seeking out customer feedback. The monetary cost of developing this product is significant but expenses can be curtailed by employing a careful rollout strategy, which consistently checks for consumer

demand before dedicating too many resources to launching the card.

TAKEAWAYS

The climate crisis is an undeniably urgent global issue to address. Capital One will not solve the climate crisis by launching a credit card, nor will consumers solve our environmental challenges by shopping at Patagonia rather than Gap or H&M. Solving problems entirely, though, is rarely

DISCUSSION QUESTIONS

achievable by a single corporate interest — but a climate solution does not have to be the first goal. A massive problem in the current discussion of climate is the general sense of hopelessness, a feeling among individuals that it’s too late to address climate challenges and that their own choices go unnoticed in the scope of such a massive problem.27 By serving as a product that simultaneously benefits society by incentivizing sustainable decision-making, by awarding cardholders through good deals and cashback opportunities, by incentivizing merchants through marketing and media attention, and by creating value for Capital One itself through access to a large customer base of already interested customers, the Eco One card solves a small problem with large implications: the problem of devotion and accountability.

Individuals, through something as simple as a credit card, can see the change they’re making and can feel empowered to make choices that are beneficial to the world around them, proving that commitment to social impact doesn’t have to come at the cost of profit.

1. What potential risks might affect Eco One cardholders?

2. What other challenges remain in the initial rollout or ongoing management of Eco One?

1 Marples, Megan. “Decision Fatigue Drains You of Your Energy to Make Thoughtful Choices. Here’s How to Get It Back.” CNN, Cable News Network, 21 Apr. 2022, https://www.cnn. com/2022/04/21/health/decision-fatigue-solutions-wellness/index. html.

2 Jocelyn, Vayola, and Lodovica Biagi. “Consumer Trends 2023: Sustainability Edition.” Statista, 2023, https://www.statista.com/ study/125082/consumer-trends-2023-sustainability-edition.

3 “More Americans Are Pessimistic about the Impact They Can Have on Climate Change Compared with Three Years Ago. - APNORC.” AP, 21 Feb. 2023, https://apnorc.org/projects/moreamericans-are-pessimistic-about-the-impact-they-can-have-on-

climate-change-compared-to-three-years-ago.

4 Frazee, Gretchen. “4 Reasons It’s Hard to Become a Sustainable Business.” PBS, Public Broadcasting Service, 23 Sept. 2019, https://www.pbs.org/newshour/economy/making-sense/4-reasonsits-hard-to-become-a-sustainable-business.

5 Ellsmoor, James. “77% Of People Want to Learn How to Live More Sustainably.” Forbes, Forbes Magazine, 14 Apr. 2022, https:// www.forbes.com/sites/jamesellsmoor/2019/07/23/77-of-peoplewant-to-learn-how-to-live-more-sustainably/?sh=1094fdae2b01.

6 “How Communities Have Defined Zero Waste.” EPA, Environmental Protection Agency, https://www.epa.gov/transforming-waste-tool/ how-communities-have-defined-zero-waste.

7 Kunst, Alexander. “Knowledge about the Zero-Waste Movement U.S. 2017.” Statista, 20 Dec. 2019, https://www.statista.com/ statistics/700570/americans-who-have-heard-about-the-zero-wastemovement-united-states.

8 “Environmental Social & Governance REP 2022.” Capital One, 2022, https://ecm.capitalone.com/WCM/stories/pdfs/2022-capitalone-environmental-social-and-governance-report.pdf?external_ id=Newsroom.

9 “MasterCard Carbon Calculator.” Mastercard Carbon Calculator, https://www.mastercard.us/en-us/vision/corp-responsibility/ priceless-planet/carbon-calculator.html.

10 Crail, Chauncey. “Aspiration Zero Credit Card Review.” Forbes, Forbes Magazine, 28 Mar. 2023, https://www.forbes.com/advisor/ credit-cards/reviews/aspiration-zero-credit-card.

11 “SavorOne Rewards Credit Card: Cash Back on Dining & Grocery Stores.” Capital One, https://www.capitalone.com/credit-cards/ savorone-dining-rewards.

12 Taparia, Hans. “One of the Hottest Trends in the World of Investing Is a Sham.” The New York Times, The New York Times, 29 Sep. 2022, https://www.nytimes.com/2022/09/29/opinion/esg-investingresponsibility.html.

13 “ESG Scores.” Refinitiv, https://www.refinitiv.com/en/sustainablefinance/esg-scores#data-process.

14 Folk, Emily. “How to Know If a Brand Is Sustainable or Not?” Ourgoodbrands, 20 Apr. 2023, https://ourgoodbrands.com/tipshow-know-brand-sustainable.

15 “Check Hundreds of Sellers in One Click for Free.” Capital One Shopping: Best Coupons, Loyalty, and Deals, 2023, https:// capitaloneshopping.com.

16 Published by Julia Faria. “Capital One Marketing Spending 2021.” Statista, 6 Jan. 2023, https://www.statista.com/statistics/1220366/ capital-one-marketing-spending.

17 “Environmental Social & Governance REP 2022.” Capital One, 2022, https://ecm.capitalone.com/WCM/stories/pdfs/2022-capitalone-environmental-social-and-governance-report.pdf?external_ id=Newsroom.

18 Lancelott, Mark. “Meeting Consumer Expectations for More Sustainable Finance.” Global Risk Regulator, https://www. globalriskregulator.com/Subjects/Reporting-and-Governance/ Meeting-consumer-expectations-for-more-sustainable-finance.

19 Edwards, William, et al. “Green Growth: Unlocking Sustainability Opportunities for Retail Banks.” McKinsey & Company, McKinsey & Company, 21 Apr. 2023, https://www.mckinsey.com/ capabilities/sustainability/our-insights/green-growth-unlockingsustainability-opportunities-for-retail-banks.

ANDREW BERUBE

20 Porter, Michael, and Mark Kramer. “Creating Shared Value.” Harvard Business Review, 4 Apr. 2023, https://hbr.org/2011/01/thebig-idea-creating-shared-value.

21 Communications, Mambu. “Over Two Thirds of Global Consumers Want Their Bank or Financial Institution to Become More Sustainable in Future.” Mambu, https://mambu.com/insights/press/ over-two-thirds-of-global-consumers-want-their-bank-or-financialinstitution-to-become-more.

22 Jocelyn, Vayola, and Lodovica Biagi. “Consumer Trends 2023: Sustainability Edition.” Statista, 2023, https://www.statista.com/ study/125082/consumer-trends-2023-sustainability-edition.

23 Resendiz, Joe. “How Credit Card Companies Make and Earn Money.” ValuePenguin, 2023, https://www.valuepenguin.com/ how-do-credit-card-companies-make-money.

24 Published by Julia Faria, and Jan 6. “Capital One Marketing Spending 2021.” Statista, 6 Jan. 2023, https://www.statista.com/ statistics/1220366/capital-one-marketing-spending.

25 “More Americans Are Pessimistic about the Impact They Can Have on Climate Change Compared with Three Years Ago.AP-NORC.” AP, 21 Feb. 2023, https://apnorc.org/projects/moreamericans-are-pessimistic-about-the-impact-they-can-have-onclimate-change-compared-to-three-years-ago.

26 McElhaney, Alicia. “West Virginia Treasury Drops BlackRock over Stance on Climate Risk.” Institutional Investor, Institutional Investor, 18 Jan. 2022, https://www.institutionalinvestor. com/article/b1wd14spzlh7xz/West-Virginia-Treasury-DropsBlackRock-Over-Stance-on-Climate-Risk.

27 “Yale Experts Explain Climate Anxiety.” Yale Sustainability, 13 Mar. 2023, https://sustainability.yale.edu/explainers/yale-expertsexplain-climate-anxiety.

Photo Credits:

■ Africa Studio/AdobeStock—page 50

■ Sundry Photography/AdobeStock—page 52

■ Irina Strelnikova/AdobeStock— page 53

■ [energepic.com/Pexels—](http://energepic.com/Pexels—) page 54

■ jordi/AdobeStock—page 55

■ kkolosov/AdobeStock— page 56

CLASS OF 2026, MAJORING IN BUSINESS, TECHNOLOGY, AND ENTREPRENEURSHIP

“Most everyone knows that climate change exists and wants to be on the right side of history, but when incentives are so heavily misaligned and when “doing the right thing” becomes such a complicated ask, there’s a disconnect between intention and action. There’s nothing that will make this issue easy to tackle, but there are ways for both individuals and corporations to take action that show a bias toward social good. I wanted to show that there are ways to make individual choices compound towards meaningful results, as long as we’re able to demonstrate that compounding effect more clearly.”

Luxury Industry Growing Into A New Age:

By Maggie Jin

Author

proposes using lab-grown, stem cell-sourced leather in luxury goods as an alternative to the unsustainable and cruel practices of traditional leather sourcing.

Maggie Jin

The TradiTional luxury SySTem

The unIted natIons defInes sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”1 Yet, as the world shifts towards a sustainable future, traditional fashion systems may become obsolete. Interestingly, within this world of clothing and retail, luxury fashion may have a natural advantage related to sustainability. High-end fashion products, for example, are inherently long-lasting due to their use of premium materials.

At the same time, the business of luxury fashion may not present a model of excellence. It often prioritizes growth at any cost by encouraging the creation of new desires in consumers and promoting exclusive global brands. Further, luxury brands consistently fail to revamp past manufacturing practices including material sourcing, managing, and processing. Overall, the luxury industry struggles with numerous contradictions and cannot claim to truly be sustainable. So what can be done to ensure that the luxury image is being maintained without the expense of the planet?

The United Nations’ 12th Sustainable Development Goal calls for society to ensure sustainable consumption and production as unsustainable patterns of consumption and production are ultimately the root causes of “the triple planetary crises of climate change, biodiversity loss, and pollution.”2 The primary factor contributing to this issue in the luxury clothing industry is the choice of materials. Leathers and skins are said to be some of the oldest and most valuable materials of our existence, but the methods of procuring them are just as ancient.

The global market size for leather is expected to reach $708.7 billion by 2030, which means that to keep up with demand, cattle and other livestock must

be churned out at scale.3 As a result, high-end fashion brands continue to be supplied by tanneries and cattle ranchers. New research into the fashion industry’s complex global supply chains shows that several large fashion brands such as LVMH, Coach, Prada, and Fendi are actively contributing to deforestation in the Amazon rainforest.4 According to the World Wildlife Fund, 80 percent of the Amazon rainforest’s deforestation is attributed to cattle ranching, which releases 340 million tons of carbon emissions every year.5 In his book, Livestock’s Long Shadow, a publication for The World Bank, author Henning Steinfeld states that the livestock sector occupies 33 percent of Earth’s ice-free surface, making it the single largest anthropogenic land user by far.6 This industry leads to the destruction of habitats, soil erosion, increased risk of fire, and the degradation of aquatic and riparian ecosystems.

However, the issues don’t stop after the acquisition of the raw hides. For these animal hides to become the purses, jackets, and accessories seen all over the streets, they must undergo an invasive process called tanning. Today, the principal method is called chromium tanning which employs dichromate, a carcinogenic chemical agent. In commercial practices, more than 50 percent of the chromium utilized in tanning procedures ends up in the nearby surroundings, either via discharge into waterways, disposal of

waste, or release into the air — posing a significant risk to human health.7 Even chrome-tanned leather in its finished form poses an environmental threat; when brands like Burberry intentionally burn their unsold leather goods, toxic chromium V1 is released into the atmosphere.8

To reduce these impacts and create a sustainable system, luxury companies must limit their use of animal materials and transition to more sustainable production methods.

The downfall of PreviouS aPProacheS

The market for alternative leathers is beginning to rise; yet the question of sustainability of these products arises as well. Today, the most common vegan leather options are polyurethane leather (PU) and polyvinyl leather (PVC). Both are non-biodegradable and made from fossil fuels — and both are harmful to human health. In manufacturing, these plastic materials release harmful toxins such as dioxins, organotins, and CFCs that can enter air and waterways.9 Some of the plastics even release toxins later when worn down. In fact, synthetic fibers from clothing are the biggest source of microplastic pollution in the ocean, estimated to be around 16-35 percent globally.10

Regardless of environmental risk factors, luxury brands refuse to adopt alternative leather materials for quality reasons. This leather is easier

and cheaper to produce than genuine leather and is more accessible to the masses. Petroleum-based vegan leathers are littered all over fast fashion websites like Shein and, as luxury brands predicted, are consistently lambasted for their low quality. As the luxury sector has a long-standing reputation of exclusivity and prestige, the implementation of such leather alternatives would completely contradict their mission.

However, this doesn’t mean that the luxury industry has been completely closed off towards vegan leathers. Brands like Hermes, Balenciaga, and Gucci have introduced goods made of mycelium leather created from the roots of mushrooms.11 Chloé and Tommy Hilfiger are experimenting with apple-based leather, and others like Chanel and Hugo Boss are innovating with Pinatex, a pineapple-based leather.

“

These vegan leather alternatives have a significant impact on carbon emissions. For example, the creators of Desserto cactus leather released their material life cycle assessment and determined that “1,864.02 percent of carbon equivalent GHG emissions are saved compared to animal leather, and 77.69 percent compared to polyurethane (PU) synthetic leather.”12

While these are promising steps in the right direction, plant-based leathers have disadvantages. An infrared spectrum investigation by The Circular Economy discovered that the big names in plant leathers—Desserto, Pinatex, Appleskin— contained not only large amounts of plastic, but expressly prohibited substances such as butanone oxime, toluene, free isocyanate, and phthalate plasticizer.13 And in the interest of consumers, plant leather may not have the same hypo-allergenic

Through a specialized bioreactor, the cell is given the right signals and nutrition for it to self-regenerate, indefinitely, into a hide. Once the growth process is complete, the hides go into tanning but as the cells grow solely what’s needed, the tanning process is far simpler. The composition of the material achieves the complexity of traditional hides, containing a variety of proteins that make up a durable and luxurious material when finished, but without the need to resort to slaughtering animals as a perpetual source for raw hides.

Using a single cell from a single cow, billions of square feet of leather can be produced”

traits as genuine leather, is far more fragile, and may have chemical smells. Because of this, plant leathers are not a sustainable nor desirable substitute for traditional leathers in the luxury market.

lab-grown leaTher and iTS value

There is one solution that could potentially solve many of these issues. Luxury brands can form a partnership with VitroLabs, a biotech company based out of Milpitas, California. VitroLabs has invented a way of producing traditional leather without the need to slaughter animals, removing most of the environmental concerns.14 The process begins by taking a singular cell sample through a one-time biopsy of a living cow or another animal.

Lab-grown leather may become one of the most resourceful and efficient practices of producing leather. Using a single cell from a single cow, billions of square feet of leather can be produced.15 Therefore, instead of spending years feeding, monitoring, and waiting for cattle to grow, full-sized hides can be produced in just 2-3 weeks. There will ultimately be little concern about keeping up with scale and consumer demand. Lab-grown leather also only grows what’s necessary, eliminating all the impurities and extra flesh present from slaughtering animals and reducing the 20-30 percent of animal skins that normally go to waste to zero.16 The resulting leather can be engineered to have specific properties such as strength, thickness, and texture, reducing the need for extra labor and chemical treatments.

When leather is produced in a closed-loop system, all the negative environmental impacts of traditional leather can be avoided. Through a cradle-to-material life cycle assessment, lab-grown leather was found to reduce greenhouse gas emissions by nearly 80 percent for traditional leather and

21 percent for synthetic leather; it was found to reduce the use of energy by 50 percent when compared to traditional leather processing and 18 percent energy reduction for synthetics.17 Lab-grown leather was also found to “reduce eutrophication potential, land use, and blue water consumption impacts by over 95 percent” relative to conventional leather.18

Although VitroLabs is capable of producing a final product in a matter of weeks, it is not currently able to match the cost efficiency of traditional leather suppliers. At present, the production of VitroLabs’ product is considerably more expensive than that of traditional leather. However, according to The Business of Fashion, “this is not about price competition,” as this material will be competing at the luxury end of the market.19 Again, luxury brands tend to be more focused on quality — creating things that are truly differentiated in terms of design and performance.20

In other words, customers of these luxury brands don’t care as much about the price of goods when compared to traditional customers. As the quantity of lab-grown leather used in luxury production increases, economies of scale will reduce the labor and energy costs of these practices, increasing the luxury brand’s profit margins. An added value is that luxury brands can differentiate themselves in the market and position themselves as leaders in sustainability, helping them

revive brand loyalty and trust. In fact, luxury conglomerate Kering led Vitrolabs’ latest venture capital round, bringing its total funding to nearly $50 million.21 Luxury giant LVMH is further supporting this transition as it experiments with lab-grown fur in partnership with Imperial College London.22

evaluaTing riSkS

The elephant in the room is the social impact surrounding such a vast transformation of the industry. Replacing age-old traditional leather with new materials and processes will likely impact the livelihoods of many including livestock farmers, tannery workers, and other related occupations. The entire sector employs at least 1.5 billion people worldwide.23 That being said, the development of lab-grown leather does create new opportunities for skilled workers in fields such as biotechnology, tissue engineering, and material science. This transition to lab-grown leather is likely to occur gradually, allowing time for affected workers to adapt and transition to new opportunities. Thus the labor market disruption caused may be offset by the emergence of new jobs in related fields. Compared to many of the manual labor jobs of the traditional leather industry, this advance could also mean a decrease in worker exploitation and an improvement in health-related working conditions.

Another potential issue of VitroLabs is that it is simply a start-up. While initial trials and implementations into the market have been promising, there is huge pressure for the company to meet the high expectations of brands and consumers wanting to get their hands on the product. There are also many questions about the logistics of this new product that remain unanswered. How much does the leather truly need to be tanned? Are there harmful chemicals involved in the process? What are the associated costs?

Transparency must be at the forefront of their operations as a first step in the right direction for the luxury industry. If the company can meet its promises, demand will likely be high and the company will then need to prove its ability to successfully scale up while upholding their objectives of sustainability and relative affordability. If not, luxury brands will likely fall back onto their traditional methods and the willingness to change in the future may decrease.

Luxury consumers can sometimes be a hard case to crack. On the one hand, the market landscape is changing. According to a report by Bain and Company, the millennial and Gen Z demographic will drive 130 percent of market expansion from now until 2025, becoming the foremost consumer group in the luxury market.24 According to the World Economic Forum, Generation Z also shows the most concern for the

planet’s well-being.25

In principle, adopting lab-grown leather would be advantageous for emerging luxury consumers, as it represents a constructive stride towards securing a sustainable, livable planet in the future. On the other hand, there is a gap between what they say and what they do. The top 1 percent of the world’s population (and likely to be luxury consumers) has a much greater carbon footprint than the rest.26 There will likely be a time lag until luxury sustainability can be fully embraced and transitioned.

For luxury brands, this shift is almost ideal. Not only does lab-grown leather cut down on supply chain needs and resource costs, but it also gives the brand a positive image for attracting customers. And as the leather maintains all the same material qualities as traditional leathers, the luxury sector can ultimately avoid the unwanted devaluation of their brands. But most importantly, the planet and the life on land that society depends upon will no longer suffer at the hands of destructive manufacturing practices.

Though alternative furs and leathers sparked a conversation about fashion’s destructive practices and provided a step in the right direction towards a circular fashion economy, it is time to address all of the nuances brought

on by the luxury sector, rather than treating the industry as a whole. Should luxury brands—the powerhouses of the fashion industry— finally begin to lead in terms of sustainability,

DISCUSSION QUESTIONS

the rest of the industry will likely follow. Transitioning to lab-grown leather can be the first step toward this achievement.

1. How might proponents argue with traditionalists who reject alternative sources of leather?

2. What other concerns might affect stakeholders considering lab-grown leather?

1 Browne, Amelia. “Explainer: What Is Sustainability and Why Is It Important? | Earth.Org.” Earth.Org, Earth.Org, 26 Oct. 2022, https://earth.org/what-is-sustainability.

2 “Goal 12: Ensure Sustainable Consumption and Production Patterns.” UN Sustainable Development Goals, United Nations, https://www.un.org/sustainabledevelopment/sustainableconsumption-production/#:~:text=Unsustainable%20patterns%20 of%20consumption%20and,of%20the%20Sustainable%20

Development%20Goals. Accessed 23 Oct. 2023.

3 “Leather Goods Market Size to Hit $738.61 Billion by 2030” GlobeNewswire News Room, Fortune Business Insights, 20 Feb. 2023, https://www. globenewswire.com/en/news-release/2023/02/20/2611373/0/en/LeatherGoods-Market-Size-to-Hit-738-61-Billion-by-2030-At-6-7-CAGR.html.

4 “New Study Links Major Fashion Brands to Amazon Deforestation Brazil The Guardian.” The Guardian, The Guardian, 29 Nov. 2021, https:// www.theguardian.com/us-news/2021/nov/29/fashion-industry-ama-

zon-rainforest-deforestation.

5 “Unsustainable Cattle Ranching.” World Wildlife Fund, World Wildlife Fund, https://wwf.panda.org/discover/knowledge_hub/ where_we_work/amazon/amazon_threats/unsustainable_cattle_ ranching.

6 Steinfeld, Henning, et al. “Livestock’s Long Shadow: Environmental Issues and Options.” UN FAO, Food and Agriculture Organization of the United Nations, 2006, https://www.google.com/books/edition/_/1B9LQQkm_ qMC?hl=en&gbpv=1&pg=PR16&dq=Live stock%E2%80%99s+Long+Shadow:+Environmental+Is sues+and+Options.

7 Shep, Camilla. “The Dangers of Chrome Tanning on the Environment – MAHI Leather.” MAHI Leather, MAHI Leather, 5 Feb. 2018, https://mahileather.com/blogs/news/the-dangers-of-chrome-tan ning-on-the-environment#:~:text=In%20some%20commercial%20 operations%2050,harmful%20levels%20of%20hexavalent%20 chromium.

8 Ibid.

9 livefastbuyslow. “Leather vs. Faux Leather: Which Is Worse?” Live Fast Buy Slow, 13 June 2021, https://www.livefastbuyslow.com/ post/leathervs-faux-leather-which-is-worse.

10 “Microplastics from Textiles: Towards a Circular Economy for Tex tiles in Europe — European Environment Agency.” European Environment Agency, European Environmental Agency, 10 Feb. 2022, https://www.eea.europa.eu/publications/microplas tics-from-textiles-towards-a#:~:text=About%208%25%20of%20 European%20microplastics,global%20marine%20environment%20 each%20year.

11 Cambe, Pameyla. “Vegan Leather: Hermes, Gucci and More Fashion Brands Are Going Green.” Lifestyle Asia Singapore, 9 Apr. 2021, https://www.lifestyleasia.com/sg/style/fashion/vegan-leather-sus tainable-alternatives-luxury-fashion-hermes.

12 Hakansson, Emma. “Cactus Leather Creators Release Material Life Cycle Assessment — Collective Fashion Justice.” Collective Fashion Justice, Collective Fashion Justice, 14 May 2021, https:// www.collectivefashionjustice.org/articles/cactus-leather-life-cy cle-assessment.

13 McFadden, Christopher. “Are Plant-Based Leathers Actually Good for the Environment? Here’s the Answer.” Interesting Engineering | Technology, Science, Innovation News and Videos, Interesting En gineering, 19 Oct. 2022, https://interestingengineering.com/innova tion/plant-based-leathers-environmental-impact.

14 “Lab Grown Leather Technology | VitroLabs Inc.” VitroLabs 2023, https://www.vitrolabsinc.com/technology.

15 Ibid.

16 Meadow, Modern. “Lab Grown Clothing.” CellAgri, CellAgri, 18 Jan. 2018, https://www.cell.ag/blog/lab-grown-clothing.

17 Locker, Rebecca, and Ranjani Theregowda. “Life-Cycle Assessment

MAGGIE JIN

“The concept originated primarily from my personal shopping preferences. I’m not only someone who places great importance on acquiring enduring items, but I’m also curious about the broader impact of the products I purchase beyond my own desires. Upon conducting thorough research, I unearthed a significant amount of information within the realm of luxury that merits unveiling.”

of Bioleather1 .” Cleaner and Circular Bioeconomy, Apr. 2022, https://www.sciencedirect.com/science/article/pii S277280132200001X?via%3Dihub#fig0001.

18 Ibid.

19 Alexei Kansara, Vikram. “With Lab-Grown Leather, Modern Meadow Is Engineering a Fashion Revolution | BoF.” The Business of Fashion, The Business of Fashion, 26 Sept. 2017, https://www. businessoffashion.com/articles/technology/bof-exclusive-with-labgrown-leather-modern-meadow-is-bio-engineering-a-fashion-revo lution.

20 Ibid.

21 Buxton, Amy. “‘World’s First’ Lab Grown Leather Backed By Ker ing Bags $46 Million Series A.” Green Queen, https://www.face book.com/GreenQueenHK, 6 May 2022, https://www.greenqueen. com.hk/kering-invests-in-cultivated-leather/#:~:text=French%2D based%20luxury%20fashion%20corporation,superior%20to%20 its%20conventional%20counterpart.

22 Halliday, Sandra. “LVMH, Fendi, London Universities Develop Ker atin-Based Lab-Grown Fur.” FashionNetwork.Com, Fashion Net work, 22 Apr. 2022, https://ww.fashionnetwork.com/ news/Lvmh-fendi-london-universities-develop-kera tin-based-lab-grown-fur,1399479.html.

23 Hultkrantz, Martina. An Overview on the Environmental Impacts of Synthetic Leather Made of Hemp Fiber with Preliminary Life Cycle Assessment. KTH Royal Institute of Technology, 2018.

24 Bain & Company, et al. “The Future of Luxury: A Look into Tomor row to Understand Today | Bain & Company.” Bain & Company, Bain & Company, 10 Jan. 2019, https://www.bain.com/insights/luxury-goods-worldwide-market-study-fall-winter-2018.

25 Wood, Johnny. “How Gen Z’s Sustainability Concerns Are Influenc ing Others | World Economic Forum.” World Economic Forum, World Economic Forum, 18 Mar. 2022, https://www.weforum.org/ agenda/2022/03/generation-z-sustainability-lifestyle-buyingdecisions/#:~:text=Generation%20Z%20shows%20the%20most,de cisions%2C%20according%20to%20new%20research.

26 Weston, Phoebe. “‘Luxury Carbon Consumption’ of Top 1% Threatens 1.5C Global Heating Limit | Greenhouse Gas Emissions | The Guardian.” The Guardian, The Guardian, 5 Nov. 2021, https:// www.theguardian.com/environment/2021/nov/05/carbon-top-1-per1 cent-could-jeopardise-1point5c-global-heating-limit.

■ Killykoon/AdobeStock—page 58

■ kkolosov/AdobeStock—page 59

■ Anna Tarazevich/Pexels—page 60

■ ThisIsEngineering/Pexels—page 60

■ Niki/Adobe Stock—page 61

■ Pixabay/Pexels—page 62

CLASS OF 2026, MAJORING IN FINANCE AND MARKETING

Photo Credits:

FOG COLLECTION IN THE WINE INDUSTRY

By Ava Launsbach

THE AUTHOR AVA LAUNSBACH PROPOSES USING FOG NETS TO CAPTURE WATER AS AN ALTERNATIVE FOR WATERING VINEYARD GRAPES. THIS SOLUTION COULD SET A PRECEDENT FOR SUSTAINABLY PRODUCED WINE WHICH IS INCREASINGLY VALUED BY CONSUMERS.

CalIfornIa’s aquIfers are one of the state’s most critical natural resources, yet they are often unnoticed and misunderstood. Aquifers are below-ground geologic structures containing water in the pore spaces of rock and gravel. They play a large role in supporting the environmental and economic health of Sonoma County, California by providing up to 60 percent of all water for businesses and homes.1

However, the county is depleting groundwater at a much faster rate than the aquifers are being replenished by rain. Water levels are dropping drastically and creating serious consequences from ground subsidence to groundwater contamination.

Much of the groundwater is used to support Sonoma County’s famous wine industry, as the area is home to hundreds of vineyards, including Hirsch Vineyards, a coastal winery known for its Pinot Noir. The Sonoma coast often experiences heavy fog; therefore, one way in which this vineyard could curb groundwater consumption is by using fog nets to collect water and irrigate select Pinot Noir vines. Using this fog collection technology, Hirsch Vineyards should launch a sustainable Pinot Noir wine irrigated with fog water to mitigate their groundwater consumption and harness the growing sustainable wine market.

Sonoma County Aquifer Depletion

Aquifers in Sonoma County are one of the region’s most critical suppliers of fresh water, but overpumping due to irrigation has caused the water to deplete at a rapid rate. Aquifers have slowly collected water for millions of years, yet in the past few decades, their levels have dropped drastically. Sonoma County lost 39 billion gallons of water storage in aquifers due to over-pumping.2 California often experiences long periods of drought, which causes much of the state to rely largely on groundwater for irrigation due to this lack of rain. In fact, Sonoma County houses the most wells in all of California with over 45,000 registered wells,3 illustrating the reliance that the county has on this natural resource.

The rate at which Sonoma County is losing groundwater from overuse is not sustainable and may result in disastrous consequences. Aquifer depletion has a variety of negative consequences including ground subsidence and seawater intrusion. Aquifer depletion not only limits fresh water supply but also detrimentally impacts the environment and local infrastructure. As mentioned, the decline in groundwater has the potential to cause ground subsidence, a collapse that occurs when ground sinks where water used to exist. In the San

Joaquin Valley, the ground has sunk up to 30 feet in places, and Sonoma has shown signs of ground sinking as well.4

Ground subsidence causes millions of dollars in property damage to buildings and other infrastructures. Research from engineer Eric Reichard and geologist John D. Bredehoeft shows that the cost of damage for every foot of ground subsidence is around $19 million.5 Furthermore, groundwater depletion, especially in coastal areas such as Sonoma, causes seawater to infiltrate the aquifer due to the decrease in pressure exerted by the groundwater. As shown by hydrogeologist Dr. Nawal Alfarrah, places such as Libya have experienced this saltwater intrusion in their coastal aquifers which has deteriorated the quality of their groundwater.6 Saltwater intrusion results in brackish groundwater that is not suitable for irrigation and could have disastrous consequences for the Sonoma County wine industry.

Previous Approaches

One way in which farms access water is by damming and diverting rivers to irrigate their crops; however, this solution inflicts devastating consequences on local ecosystems. To access large amounts of fresh water, the agricultural industry takes advantage of rivers and streams, which also reduces and alters the flow of rivers. The reduced flow

of rivers causes changes in sediment transport and in floodplains further downriver.7 These changes in floodplains damage entire ecosystems and harm species of plants and animals. Dams also destroy ecosystems through habitat fragmentation. Dams often block fish passage which causes the decline of fish populations and other aquatic species.8 Ultimately, diverting water can lead to a destructive loss of biodiversity.

Alternative water sources for irrigation, such as desalinating ocean water, come with disadvantages including high costs and potential crop damage. One way in which the agricultural industry has attempted to access alternate sources of fresh water is by removing the salts and minerals from seawater. Yet despite the abundance of seawater, this transformation process is very expensive both in terms of operational and capital costs. In addition, it consumes high amounts of energy and the complex technology requires expertise to maintain. Scholar Rajesha Kumar states that the costs and energy requirements are barriers to the method ever being implemented widely in agriculture.9

Furthermore, the quality of desalinated water often affects crops. Kumar found that irrigating crops with desalinated seawater increases the salinity and boron in the soil, which could decrease crop yields.10 While large agricultural companies may sustain desalination long-term, most smaller-scale businesses struggle to afford the costs that come with desalination. On the other hand, fog collection is a simple, affordable technology that has the potential to be a common source of freshwater.

Proposal

Hirsch Vineyards should launch a sustainable Pinot Noir wine grown with fog water collected from the thick, marine fog that covers Sonoma County. While Hirsch Vineyards aims to dry farm most of their mature vines, younger vines need irrigation to establish their root systems that have yet to fully develop. Vineyards often plant new vines to replace diseased ones or to experiment with new grape varieties. Vineyards also plant new vines to improve production efficiency as the output from older vines tends to diminish

over time.11

Hirsch Vineyards has the opportunity to explore developing new Pinot Noir grapes that are grown with fog water, resulting in a new, highly sustainable line of wine. This wine would be successful as Pinot Noir grapes require little water, which is optimal for watering with fog collection. In addition, Hirsch Vineyards is known for its Pinot Noir wines, which gives this new wine the potential to gain recognition.

Hirsch Vineyards is well suited for fog collection technology due to its location and climate. The vineyard is located only three miles from the Pacific Ocean.12 This location is optimal due to the heavy marine advection fog that occurs often in Sonoma County due to the cold Pacific Ocean currents cooling the warmer moist air. The Northern California coast is known for this frequent weather phenomenon and is an integral part

of this area’s climate. According to research, coastal areas are optimal for fog collection because advection fog is driven inland by wind, which helps push the fog droplets across the net.13 Hirsch Vineyards’ proximity to the ocean would allow the vineyard to collect water from the persistent marine fog that forms along the coast.

Although Hirsch Vineyards alone may not have a large impact on groundwater levels, they have the potential to be a leading example of this sustainable technology for others to follow. Hirsch Vineyards is a prime candidate for pioneering this sustainable technology, and the company prides itself on maintaining the vineyard for generations to come. Jasmine Hirsch, the general manager of the vineyard, speaks of their “200-year plan,” which refers to their long-term planning for the preservation of their winery through sustainable practices

“Utilizing fog technology is a cost-effective, simple way to help Hirsch Vineyards mitigate their groundwater usage.”

and nourishment.14 Fog collection would be a meaningful step towards maintaining their vineyard through conserving water resources for the future. Hirsch Vineyards would become a leading example in sustainable technology and pave the way for other vineyards to implement this technology as well. Vineyards using fog collection on a wider scale will have a permanent impact on groundwater levels and lead to healthier aquifers.

History of Fog Collectors and Benefits

Fog collectors are a simple technology that has demonstrated success in several other countries by delivering fresh water to coastal communities. Fog nets work

by capturing droplets of water from the air with layers of mesh; these droplets coalesce on the mesh until they are large enough to fall into a gutter at the bottom of the net. From there, the water flows into a tank or irrigation system. Polypropylene mesh nets are currently utilized in countries such as Chile to provide fresh drinking water to coastal, water-scarce communities.15 In Chile, the technology was largely successful, and each net produced several gallons of fresh water per day for the community.16 Fog collection has also found success in countries such as Guatemala, Ecuador, and Yemen.

Fog collection is a sustainable source of freshwater that is costeffective and energy-free. While many

other alternatives to groundwater have negative environmental consequences, fog nets have a relatively low impact. There is little environmental disturbance caused by installing and maintaining the system because the nets simply capture water from the atmosphere. Unlike the technology involved in seawater desalination, fog capture is simple, and Hirsch Vineyards does not need to hire experts to operate the system, saving the vineyard money on maintenance and other operational costs. Not only are fog collectors easy to install and maintain, but the “atmospheric water is generally clean, does not contain harmful microorganisms, and is immediately suitable for irrigation purposes.”17 Fog water can directly irrigate the vines

without any costly additional treatment. Finally, the technology is passive and does not require large amounts of electricity to operate; instead, fog nets rely merely on gravity to pull the water down into storage.

Obstacles

Fog collection is highly weather dependent, which presents a challenge because the system relies on favorable fog and atmospheric conditions to generate water. Specifically, wind is necessary for large volumes of fog water to be collected as the wind blows fog droplets through the mesh.18 Therefore, some weeks might produce less water than others. Fog is extremely hard to predict, and Hirsch Vineyards would have no reliable way to know the amount of water they expect to collect. Despite the technology’s dependence on weather conditions, grape vines are “tenacious survivors,” and they can easily “thrive where other plants cannot.”19 Even if Hirsch Vineyards experiences less fog, the grapevines will likely survive due to their drought-tolerant nature, proving that fog nets remain a viable solution.

Another obstacle involved with fog water collection is the initial capital investment in the fog collection technology and the limited collection

capacity of the fog nets. The equipment would include several fog nets and barrels to capture the accumulated water. While the barrels are inexpensive and Hirsch Vineyards owns existing irrigation equipment, the fog nets require Hirsch Vineyards to make a larger initial payment. Fogquest, a non-profit organization that helps water-scarce communities in developing countries implement fog nets, states that a fog net of 40m2 costs around $1,000 and produces around 53 gallons of water annually on average.20

As stated, the amount of water collected can vary due to weather conditions. Fog nets must pull water directly from the small droplets in the atmosphere, which may cause low water yields. Due to the limited water collection of these fog nets, Hirsch Vineyards would need to purchase several to establish and sustain a new line of Pinot Noir grapevines. Despite the obstacles, these efforts are still feasible because Pinot Noir is the most drought-tolerant of all grape varieties, requiring as little as five gallons of water to thrive during their first two years.21

Another important limitation of using fog collection at Hirsch Vineyards is the small scale. Although creating a single new sustainable Pinot Noir wine is the

most feasible for Hirsch Vineyards, it will have very little impact on the aquifers themselves. Using fog collection at Hirsch Vineyards is a very small solution to the overwhelming problem that California is facing. While fog collection may provide enough water for the growth of a selection of new grape vines, the overall reduction of water use would be minimal. Still, while this solution will not solve all of California’s water challenges, Hirsch Vineyards would set an example with a sustainable technology that could lead to a more substantial impact on aquifers if others follow in their footsteps.

Value for Hirsch Vineyards

Fog collection will benefit Hirsch Vineyards in the long run because groundwater is not an ongoing sustainable source of water. In fact, some wells in Sonoma County are already going dry. Daniel Fernandez, a researcher of fog collection technology at CSU Monterey Bay, states that many farmers have contacted him because their wells are running low, and they need another source of fresh water.22 Groundwater is unsustainable and soon many wells will run dry, which could affect much of Sonoma County’s wine industry and

force them to look for more sustainable solutions. By using fog water, Hirsch Vineyards has the potential to jump ahead of many of its competitors in the wine market who may face water shortages.

Furthermore, the cost of groundwater is likely to increase due to Sonoma County’s conservation efforts, which would increase costs for vineyards. While the fee for extracting groundwater is currently $40 per acre-foot,23 Sonoma County recently unveiled a proposed groundwater fee of $95 to $160 per acre-foot24 and neighboring Petaluma Valley proposed fees of $230 to $400 per acre-foot.25 These proposed regulatory fees demonstrate how Sonoma County’s attempts to manage groundwater will result in higher costs for vineyards in the upcoming years. By investing in a sustainable source of fresh water, Hirsch Vineyards can avoid some of these steep ongoing fees. For California’s wine industry, fog collection could be a meaningful step toward finding innovative ways to contend with the state’s declining groundwater supply.

The Sustainable Wine Market

By creating a sustainable Pinot Noir wine, Hirsch Vineyards can tap into the rapidly expanding sustainable wine market and appeal to a new audience of environmentally responsible consumers. There is a lot of room for growth in this market as sustainable wines are becoming increasingly popular with consumers. Research by the Wine Institute states that 71 percent of U.S. wine drinkers would choose a sustainable wine over a non-sustainable wine, and 82 percent of sellers consider sustainability either frequently or occasionally when marketing wine to customers.26 By creating a sustainable wine, Hirsch Vineyards would interest a large base of environmentally conscious consumers who are willing to pay a premium for a wine that aligns with their personal values. Research shows that a consumer’s “willingness to pay” increases when a wine is proven to be sustainable.27 Wine grown with fog water would interest consumers who are looking for wines

DISCUSSION QUESTIONS

that are conserving the state’s resources, which would make the wine more marketable and profitable in the years to come.

Conclusion

Utilizing fog technology is a costeffective, simple way to help Hirsch Vineyards mitigate their groundwater usage. Groundwater is a rapidly declining natural resource that needs to be addressed by all businesses in Sonoma County. Farms and vineyards need to take responsibility and decrease their usage before more harm is done. Although Hirsch Vineyards’ creation of a sustainable Pinot Noir wine may not solve the entire county’s problem of groundwater depletion, the growing sustainable wine market means that Hirsch Vineyards could expand this operation in the future. If Hirsch Vineyards can tap into and grow the sustainable wine market, soon their small solution will be mitigating the problem on a larger scale.

1. In what other ways might fog collection be applied to mitigate water scarcity in California?

2. Do you think Sonoma County’s proposal to charge a groundwater fee will incentivize vineyards to switch to alternative water production methods? Why or why not?

1 “Basin Conditions.” Sonoma Valley Groundwater Sustainability Agency, https://sonomavalleygroundwater.org/conditions.

2 “The Value of Aquifers in Sonoma County.” Earth Economics, https://www.sonomaopenspace.org/wp-content/uploads/HLHECase-Study-Ag-Open-Space-Technical-Report-Groundwater. pdf.

3 Englund, Sofia. “As Wells Run Dry, Sonoma Valley Reckons with New Water Regulations.” Sonoma Magazine, 18 July 2022, https://www.sonomamag.com/as-wells-run-dry-sonoma-valleyreckons-with-new-water-regulations.

4 Halverson, Nathan. “California Is Literally Sinking into the Ground.” Mother Jones, 10 June 2015, https://www. motherjones.com/environment/2015/06/california-sinking-

drought-ground-water.

5 “The Value of Aquifers in Sonoma County.”

6 Alfarrah, Nawal, and Kristine Walraevens. “Groundwater Overexploitation and Seawater Intrusion in Coastal Areas of Arid and Semi-Arid Regions.” Water, vol. 10, no. 2, Feb. 2018, p. 143. Crossref, https://doi.org/10.3390/w10020143.

7 “Impacts of Surface Water Withdrawals for Irrigation.” Student Materials, 17 Dec. 2022, https://serc.carleton. edu/integrate/teaching_materials/food_supply/student_ materials/1107#:~:text=Negative%20impacts%20of%20 dams%20and,water%20temperature%20downstream%20 from%20dam.

8 Wu, Jianguo, et al. “Three-Gorges Dam — Experiment in Habitat

Fragmentation?” Science, vol. 300, no. 5623, 2003, pp. 1239–1240., https://doi.org/10.1126/science.1083312.

9 Kumar, Rajesha, et al. “Desalination for Agriculture: Water Quality and Plant Chemistry, Technologies and Challenges.” Water Supply, vol. 18, no. 5, 2017, pp. 1505–1517., https://doi. org/10.2166/ws.2017.229.

10 Ibid.

11 “Removing and Replacing a Vineyard.” Hill Family Estate, 20 May 2020, hillfamilyestate.com/removing-and-replacing-avineyard.

12 “Hirsch Vineyard.” Williams Selyem, 12 Nov. 2020, https:// www.williamsselyem.com/hirsch-vineyard/#:~:text=The%20 vineyard%20is%203%20miles,and%20 season%2Dto%2Dseason.

13 “Fog Harvesting.” Source Book of Alternative Technologies for Freshwater Augmentation in Latin America and the Caribbean, International Environmental Technology Centre, Osaka, 1998, https://www.oas.org/dsd/publications/unit/oea59e/ch12. htm#1.3%20fog%20harvesting.

14 “WWC20 – Hirsch, Sonoma Coast.” JancisRobinson.Com, 5 Nov. 2020, www.jancisrobinson.com/articles/wwc20-hirschsonoma-coast.

15 Schemenauer, Robert S., and Pilar Cereceda. “Fog-Water Collection in Arid Coastal Locations.” Ambio, vol. 20, no. 7, 1991, pp. 303. ProQuest, http://proxy.library. nyu.edu/login?qurl=https%3A%2F%2Fwww.proquest. com%2Fscholarly-journals%2Ffog-water-collectionarid-coastal-locations%2Fdocview%2F14276040%2Fse2%3Faccountid%3D12768.

16 Ibid.

17 “Advantages of Fog Harvesting System Technology.” UN Climate Technology Centre and Network, www.ctc-n.org/technologies/ fog-harvesting#:~:text=Fogs%20have%20the%20potential%20 to,agricultural%20irrigation%20and%20domestic%20use.

18 Sharifvaghefi, Seyyedmajid, and Hanif Kazerooni. “Fog Harvesting: Combination and Comparison of Different Methods to Maximize the Collection Efficiency.” SN Applied Sciences, vol. 3, no. 4, 2021, https://doi.org/10.1007/s42452-021-04518-3.

19 Asimov, Eric. “Drought Brings Soul-Searching to California Winemaking.” New York Times, 20 Aug. 2015. New York Times, www.nytimes.com/2015/08/26/dining/wine-california-drought. html?searchResultPosition=1.

20 “Sustainable Water Solutions.” FogQuest, https://fogquest.org/f-

AVA LAUNSBACH

“The most rewarding part of this experience was being

able to interview and interact with real people as a way to form ideas for my paper. During my writing process, I visited a few local wine shops to ask managers for their own opinions about sustainability in the wine industry. These conversations gave me information that I would not find through research online and made writing the paper much more interesting and rewarding.”

a-q.

21 “Vineyard Irrigation.” Montana State University Western Agricultural Research Center, agresearch.montana.edu/warc/ guides/grapes/managing-vineyard/vineyard-irrigation.html. Accessed 3 June 2023.

22 Waldman, Heather. “Finding Use for Fog: California Farmers Could Benefit from Using Fog Nets to Buffer Water Supplies.” KCRA, KCRA, 9 Feb. 2022, https://www.kcra. com/article/california-farmers-benefit-fog-nets-buffer-watersupplies/38987492#.

23 “Rate and Fee Study 2022.” Sonoma Valley Groundwater Sustainability Agency, https://sonomavalleygroundwater.org/fee.

24 Kovner, Guy. “Sonoma County Proposes First-Ever Fees for Well Water Pumping.” Santa Rosa Press Democrat, The Press Democrat,

20 Apr. 2022, https://www.pressdemocrat.com/article/news/ sonoma-county-unveils-first-ever-proposed-well-water-feesunder-pioneering.

25 Ibid.

26 “Consumer & Trade Research Shows Increased Demand for Sustainably Produced Wine.” Wine Institute, https:// wineinstitute.org/press-releases/consumer-trade-research-showsincreased-demand-for-sustainably-produced-wine.

27 Ibid.

Photo Credits:

■ Kishivan/AdobeStock—page 66

■ Ramiz Dedakovic/Wirestock—page 67

■ Juan Pablo Serrano Arenas/Pexels—page 68

CLASS OF 2026, MAJORING IN ACCOUNTING

EDITORIAL TEAM

LEFT TO RIGHT: Stephen Xu, Yangyang Lai, Emy Sainbayar, Professor Jeffrey J. Younger, Aidan Katz, Nicolette Hendrawinata, Jocelyn Chen

I hope you enjoyed thIs Issue of The Call for Corporate Action, NYU Stern Student Voices. I congratulate our published authors while offering a warm thank you to the many contributors to this, our eleventh edition.

We culled an impressive collection of 58 semi-finalists from over 650 student essays from Business and Society Spring 2023 and selected 10 for publication. These final student authors and essays are the ultimate inspiration for this issue. We hope that current and future writers are moved by the high caliber of the prose and challenging ideas proposed here.

Our student selection team—all past authors of The Call—chose the winning essays based on several criteria. They sought compelling content, fluid composition, and evidence of critical thinking. They looked for specific “calls for corporate action” that were realistic, creative, passionate, and unique. They looked for intriguing insights into the interrelations between business, society, and government. Finally, they sought variety, looking to present a mix of current student thinking across a complementary collection of topics.

This publication was written, assembled, and edited by NYU students—specifically, Senior Editor

Nicolette Hendrawinata, and her fellow editorial team: Aidan Katz, Stephen Xu, Yangyang Lai, and Tarun Sivakumar. Our Senior Art Designer, Emy Sainbayar, and Associate Jocelyn Chen are both responsible for the beautiful graphic design you see here. Additional editorial services were provided by Management. Communication Assistants: Amaya Chmielewski, Brigitte Uriarte, Corina Senior-Egana, and Isabel Schantz. Thank you, all, for your hard work and dedication. Your editorial and artistic sensibilities grace every page.

Thank you also to NYU Stern Undergraduate Dean Robert Whitelaw for his supportive opening letter and to Professor Matt Statler for his introduction to the Business & Society course. An extra thank you to Sangeeta Bhojwani, Associate Director of the Dean’s Office Affairs & Undergraduate Initiatives who assisted with the Dean’s letter.

Most importantly, thank you to the dedicated instructors who facilitate the weekly critical thinking and writing sessions that form the backbone of Business & Society. Their instruction permeates all these essays. Without their dedication, this publication would not have been possible—so thanks to the following teachers from Spring 2023:

A.J. Fuentes, Adelina Yankova, Alex Puutio, Amaya Rivera, Aya Tanaka, Bob DiYanni, Bruce Meyerson, Carol Newell, Claudia Caruana, Ellen Pluta, Fadia Nordveit, Haider Fancy, Irv Schenkler, Kate Brideau, Keith Meatto, Kevin Barrow, Kim Bhasin, Larry Menna, Maria Patterson, Mark Brennan, Matt Statler, Nicole Adair Jones, Rachel Laryea, Robert Wosnitzer, Tim Gilman, Tim Glencross, Vivian Giang, and Wei Shi.

Finally, for all their support and guidance, I would like to separately thank Batia Wiesenfeld, the Andre J. L. Koo Professor of Management and Director of the Business and Society Program; Brian Hanssen, Director of the Management Communication Program; Matt Statler, Clinical Professor of Business and Society, and Richman Family Director of Business Ethics and Social Impact Programming; Mara van Loggerenberg, Senior Associate Director of Social Impact Programming; and Mrs. Janeece Lewis, Senior Administrator of the Management Communication Program.

Thank you, one and all.

Warmly, Jeffrey J. Younger

PAST ISSUES

Enjoyed this magazine?

Check out past issues of The Call for Corporate Action: NYU Stern Student Voices

VOLUME 10, SPRING 2023

https://issuu.com/corporateaction/ docs/the_call_2023

VOLUME 8, SPRING 2021

https://issuu.com/corporateaction/

VOLUME 4, SPRING 2017

https://issuu.com/corporateaction/ docs/thecall_nyustern_2017

VOLUME 7, SPRING 2020

https://issuu.com/corporateaction/

VOLUME 3, SPRING 2015

https://issuu.com/corporateaction/ docs/thecall_nyustern_2015

VOLUME 9, SPRING 2022

https://issuu.com/corporateaction/ docs/the_call_2022

VOLUME 6, SPRING 2019

https://issuu.com/corporateaction/

VOLUME 2, SPRING 2013

https://issuu.com/corporateaction/ docs/the-call-spring-2013web_final

VOLUME 5, SPRING 2018

https://issuu.com/corporateaction/ docs/thecall2018_nyustern

VOLUME 1, SPRING 2011

https://issuu.com/corporateaction/ docs/thecall_2011

docs/thecall2019_nyustern

docs/thecall2020_nyustern

docs/the_call_2021