Business, Climate, and Environment Lab

Environmental degradation and climate change may be the largest failures of free private markets that the world has ever observed. Governments and businesses have adopted myriad policies to solve these problems, sometimes with success but frequently with unintended consequences. Business and government will have to work together to solve the most pressing environmental challenges of our time, from climate change to species extinction. The Business, Climate, and Environment Lab supports cutting edge research, provides thought leadership, and brings together stakeholders from academia, government, communities, and the private sector to design smart public and private sector policies related to topics such as climate change, renewable energy, air and water pollution, waste disposal, biodiversity, and deforestation.

Climate Change and Financial Risk

Central Banking and Climate Change: Ongoing work is exploring the role that central banks can and should play with respect to climate change and the extent to which it is a systemic risk within the Federal Reserve Bank of the United States’ scope and mandate.

Climate Risk Disclosures: Securities regulations in the United States require publicly traded firms to publicly disclose material risks to the firm to ensure well-functioning markets. Numerous private governance standards are attempting to fill in the content of materiality in the climate change context. This project explores how materiality varies across industries, and what public regulators can learn from private governance standards, and will ultimately recommend changes to securities regulations to promote uniformity in climate risk disclosures.

Banks, Private Governance, and the Transition to a Low-Carbon Economy: While many scholars have focused on the public law rules governing banks and whether, for example, central banks can adopt measures to promote the transition to a low-carbon economy, this project focuses instead on the steps that banks themselves are taking as a matter of private environmental governance. Recently, major banks in the United States and abroad have begun to adopt standards to minimize financial risk from the transition to a low-carbon economy and to promote investment in “green” assets. This project will examine this form of private environmental governance and the role that banks can play as quasi-regulators to encourage a smooth transition to a low-carbon economy.

Energy and Environmental Markets

Carbon Trading, Emissions Leakage and Waterbeds: Carbon markets can be effective tools to reduce greenhouse gas emissions, but additional and overlapping climate policies by a subset of states or countries often lead to unintended side effects. This project investigates how improved policy design can mitigate this problem.

Renewable Energy Markets: Renewable energy portfolio standards are prominent policy tools by which individual U.S. states incentivize solar energy, but regional integration could enhance their cost-effectiveness.

Decarbonizing the Transportation Sector

Improving Transportation Policy: Ongoing projects investigate the performance of new-vehicle tailpipe standards for local air pollution, the role of consumer myopia in energy-efficient vehicle purchases, and what factors explain long-run preferences for driving.

Green Growth

The Economics of Planetary Boundaries: To keep the earth stable we need to solve a number of environmental problems including climate change, biodiversity loss, chemical pollution, and ocean acidification, to name but a few. In short, humanity needs to stay within the “planetary environmental boundaries”. We ask the grand question: which policies would keep humanity within the planet’s safe operating space?

Environmental Policy in Emerging Economies: Emerging markets face increasing pressure on their natural environment. We study how effective policy-making differs from more developed economies, the role of governance and corruption, and the barriers to adoption of cleaner technologies in low-income countries.

Why Have Forests and the Economy Grown in Europe? Satellite data shows that forest cover in Europe has increased over the past century, despite enormous growth in living standards and economic activity. We disentangle what is responsible for this trend, and the role of expanding protected nature areas.

Building Climate Resilience

Climate Risk SolutionsLast summer, researchers from across the university posed 30 Climate Risk Solutions. In honor of the 50th anniversary of Earth Day with a looming climate crisis, we invited Penn students to submit their own climate risk solutions.

Risk Transfer for Climate Adaptation: Ongoing projects are investigating how innovations in risk transfer can help promote climate adaptation in communities throughout the US, particularly in a coastal context.

Adaptation Blueprint: Novel policy approaches, creative new regulatory tools, and visionary planning ideas, which can anticipate future risks and help communities better adapt to a changing climate.

Climate and Environmental Ethics

Business Ethics and Climate Change: A series of projects will examine the ethical obligations and duties of business firm managers to limit their greenhouse gas emissions and environmental impacts, as well as the duties and obligations of individuals to the environment and to future generations.

Light, S.E. (forthcoming 2021).  National Parks, Incorporated. University of Pennsylvania Law Review, 169.

Berkey, B. The Philosophical Core of Effective Altruism. Forthcoming in Journal of Social Philosophy:

Berkey, B. Prospects for an Animal-Friendly Business Ethics. Forthcoming in Animals and Business Ethics (Springer).

Abito, J.M. (2020). Measuring the Welfare Gains from Optimal Incentive Regulation. Review of Economic Studies (forthcoming).

Bento, A.M., M.R. Jacobsen, C.R. Knittel, and A.A. van Benthem (2020). Estimating the Costs and Benefits of Fuel Economy Standards. In: M.J. Kotchen, J.H. Stock, and C.D. Wolfram (eds.), Environmental and Energy Policy and the Economy 1.

Berkouwer, S.B. (2020). Electric Heating and the Effects of Temperature on Household Electricity Consumption in South Africa. The Energy Journal, Vol. 41:04

Berkouwer, S.B. and J.T. Dean (2020). “Credit and attention in the adoption of profitable energy efficient technologies in Kenya.” Working Paper.

Jacobsen, M.R., C.R. Knittel, J.M. Sallee and A.A. van Benthem (2020). The Use of Regression Statistics to Analyze Imperfect Pricing Policies. Journal of Political Economy 128(5).

Kousky, C., and H.J.P. Wiley (2020).  The Role of Insurance in Coastal Adaptation: Workshop Findings.  Philadelphia: Wharton Risk Center, University of Pennsylvania. March.

Kunreuther, H. and P. Slovic (2020). What the Coronavirus Curve Teaches Us About Climate Change. Politico Magazine. March.

Abito, J.M., C.R. Knittel, K. Metaxoglou and A. Trindade (2019). The Role of Output Reallocation and Investment in Coordinating Externality Markets. Working Paper.

Berkey, B. (2019). Climate Justice, Climate Policy, and the Role of Political Philosophy. Ethics, Policy & Environment, 22:2, 145-147.

Berkey, B. (2019). Collective Obligations and Demandingness ComplaintsMoral Philosophy and Politics6(1), 113-132.

Berkey, B., and E.W. Orts (2019). Review of Ryan Burg, Business Ethics for a Material World. Business Ethics Quarterly 29: 143-146.

Kousky, C. (2019). Time for a New Apollo Project: A Climate-Friendly EconomyThe Hill. July 27.

Kousky, C., K. Greig, and B. Lingle (2019). Financing Third Party Wildfire Damages: Options for California’s Electric Utilities. Philadelphia: Wharton Risk Center, University of Pennsylvania. January.

Kousky, C., and S. Light (2019). Insuring NatureDuke Law Journal, 69 Duke Law Journal 323.

Light, S.E. (2019). The Law of the Corporation as Environmental Law71 Stanford Law Review 137.

Light, S.E. (2019). The Role of Universities in Private Environmental Governance Experimentalism33 Organization & Environment 57.

Perino, G., R.A. Ritz, and A.A. van Benthem (2019). Understanding Overlapping Policies: Internal Carbon Leakage and the Punctured Waterbed. National Bureau of Economic Research.

Pless, J., and A.A. van Benthem (2019). Pass-Through as a Test for Market Power: An Application to Solar Subsidies. American Economic Journal: Applied Economics 11(4): 367-401.

Walls, M., M. Wibbenmeyer, and C. Kousky (2019). Does the Coastal Barrier Resources Act Provide a Policy Template to Address Wildfire Risk?  Resources. March 20.

Hagenlocher, M., S. Schneiderbauer, Z. Sebesvari, M. Bertram, K. Renner, F.G. Renaud, H. Wiley, and M. Zebisch (2018). Climate Risk Assessment for Ecosystem-based Adaptation: A guidebook for planners and practitioners. Bonn: GIZ.

Harari, M., and E. La Ferrara (2018). Conflict, Climate and Cells: a Disaggregated Analysis. Review of Economics and Statistics 100 (4), 594-608.

Light, S.E. (2018). Regulatory Horcruxes, 67 Duke Law Journal 1647.

MacDuffie, J.P. (2018). Response to Perkins and Murmann: Pay Attention to What Is and Isn’t Unique about TeslaManagement and Organization Review, 14(3), 481-489.

Berkey, B. (2017). Prospects for an Inclusive Theory of Justice: The Case of Nonhuman Animals. Journal of Applied Philosophy 34: 679-695.

Berkey, B (2017). Human Rights, Harm, and Climate Change Mitigation Canadian Journal of Philosophy 47: 416-435:

Berkey, B (2017). Benefiting from Unjust Acts and Benefiting from Injustice: Historical Emissions and the Beneficiary Pays Principle, In: Climate Justice and Historical Emissions (Cambridge University Press)

Cornell, N. & Light, S.E. (2017). Wrongful Benefit & Arctic Drilling, 50 U.C. Davis Law Review 1845.

Light, S.E. (2017). Precautionary Federalism and the Sharing Economy, 66 Emory Law Journal 333.

Berkey, B (2016). Review of Darrel Moellendorf, The Moral Challenge of Dangerous Climate Change. Ethics, Policy, & Environment 19: 108-111.

Epanchin-Niell, R., C. Kousky, A. Thompson, and M. Walls (2016). “Threatened Protection: Sea Level Rise and Coastal Protected Lands of the Eastern United States.” Ocean and Coastal Management. 137(March 1):118-130.

Jacobsen, M.R., and A.A. van Benthem (2015). Vehicle Scrappage and Gasoline PolicyAmerican Economic Review 105(3): 1312-1338.

Light, S.E. (2015). The New Insider Trading: Environmental Markets within the Firm, 34 Stanford Environmental Law Journal 3.

Light, S.E. & Orts, E.W. (2015). Parallels in Public and Private Environmental Governance, 5 Michigan Journal of Environmental & Administrative Law 1.

van Benthem, A.A. (2015). Energy LeapfroggingJournal of the Association of Environmental and Resource Economists 2(1): 93-132.

A selection of past research projects:

Flood Resilience Research – Collaboration with Zurich Insurance

The Risk Center joined with Zurich and partners to develop key initiatives focused on broadening the scope of flood resilience research, in order to advance global understanding of flood impact, risk reduction, financial protection, and community resilience.

South Florida Water, Sustainability and Climate

A 5-year project was initiated in 2013 to develop criteria for evaluating current and future water use and provide new insights into the value of water resources in the region and the trade-offs for decision-makers under various climate change scenarios.

Integrated Risk and Uncertainty Assessment of Climate Change Response Policies

Howard Kunreuther was one of two Coordinating Lead Authors for the 2014 Intergovernmental Panel on Climate Change (IPCC) chapter “Integrated Risk and Uncertainty Assessment of Climate Change Response Policies” for the Fifth Assessment Report of the IPCC.

Protecting the Ozone

The World Bank funded the Risk Center to develop decision criteria for disseminating project funds to reduce ozone-depleting substances (ODS) production, and to develop efficiency criteria and incentive structures to assist implementation of these projects.

New Digital Dialogue

Check out the fifth digital dialogue to hear fourteen experts’ thoughts on how to scale up financing for coastal ecosystem protection and restoration.

Energy Economics & Finance Seminar

This seminar series is organized by Arthur van Benthem and hosted by the Kleinman Center for Energy Policy. The scope includes regulation and policy for energy, environmental and transportation issues. View the schedule here.

Upcoming Events

Check here for upcoming climate related events taking place at the University of Pennsylvania and around Philadelphia.

Contributing Wharton Scholars:

Arthur A. van Benthem, Associate Professor of Business Economics & Public Policy, and Sarah E. Light, Associate Professor of Legal Studies & Business Ethics, are the faculty members responsible for leading the Business, Climate, and Environment Lab.

Arthur van Benthem (1)

Arthur van Benthem

Associate Professor of Business Economics and Public Policy

Research Areas: Energy Policy; Environmental Policy; Transportation Policy


Sarah E. Light

Associate Professor of Legal Studies & Business Ethics

Research Areas: Climate Law & Policy; Environmental Law & Policy; Private Environmental Governance

Mike Abito (2)

Jose Miguel (Mike) Abito

Assistant Professor of Business Economics & Public Policy

Research Areas: Industrial Organization; Regulation; Environmental Economics

Brian Berkey

Brian Berkey

Assistant Professor of Legal Studies & Business Ethics

Research Areas: Climate Ethics; Climate Justice; Animal Ethics


Susanna Berkouwer

Assistant Professor in Business Economics & Public Policy

Research Areas: Development Economics; Environmental Economics

Wit 3 (3)

Witold Henisz

Deloitte & Touche Professor of Management

Research Areas: Climate Risk Disclosure; Materiality & Management of ESG Factors

Ben Keys

Benjamin Keys

Rowan Family Foundation Associate Professor of Real Estate

Research Areas: Property Markets; Housing Markets; Mortgage Markets


Steven Kimbrough

Professor of Operations, Information, and Decisions

Research Areas: Risk & Uncertainty; Deep Decarbonation Pathways; Market Design

Carolyn Kousky

Carolyn Kousky

Executive Director, Wharton Risk Management Center

Research Areas: Disaster Insurance; Natural Disaster Policy; Climate Adaptation

Howard Kunreuther

Howard Kunreuther

Co-Director, Wharton Risk Management Center

Research Areas: Disaster Insurance; Communication of Climate Risks; Climate Change Policy


Penny Liao

Post-Doctoral Fellow, Wharton Risk Management Center

Research Areas: Natural Disaster Impacts & Policy; Environmental Policy

John Paul MacDuffie1

John Paul MacDuffie

Professor of Management, Management Department

Research Areas: Vehicle & Mobility Innovations; Urban Transportation; Environmental Law & Policy

canva-photo-editor-15-qer5o8 (2)

Eric W. Orts

Guardsmark Professor of Legal Studies; Management

Research Areas: Environmental Law and Policy; Environmental Management & Governance


For more information on the Business, Climate, and Environment Lab, contact Carolyn Kousky, Executive Director, at