Climate Change Education in Business Schools

I was at a workshop at the National Academy of Science this week, with the topic being how business schools address climate change in their curricula.

Website is here; there should be video of the sessions up at some point.

It's an interesting question and there were many good people on the panels and in the audience.

I tried to make two points during my remarks:  One, must keep in mind all the other issues that we want to educate our students about, i.e., there is an opportunity cost to spending time on climate change; and two, in order to broach climate change in an appropriately rigorous fashion, we need to first cover many basics of economics and public policy.

The issue of opportunity cost is very real, and in my position I see those costs all the time.  First consider the core (required) curriculum.  Should climate change occupy a (more) significant role there? (Note that at Tuck, there is one full session on externality in the Managerial Economics course, with climate change serving as the application; and the ManEc profs then join in the Global Economics course later in the year for a session on the global trade implications of cap and trade or a carbon tax.  But right now, many schools are debating having a yet stronger role for global topics in the core.  This will take up time, faculty, and financial resources, especially if an in-country experiential route is chosen.  Other topics also are prime candidates for core positioning:  ethics, entrepreneurship, leadership.  Meanwhile many subjects that have typically been in the core have either been cut back or taken out entirely -- statistics, managerial accounting, decision analysis...

Opportunity cost also arises in the elective (typically second-year) curriculum.  I just got done teaching a new energy economics course, at the request of students.  What is more important, an energy econ course or a course in climate change?  There is also demand/need for elective courses in health care, education, entrepreneurship, technology...

My second point was the need to have fundamentals covered well if we are going to talk seriously about climate change in courses.  The basic economics of externality, optimal amount of emissions, and alternative control policies is not easy; one session on this means "drinking from the fire hose" treatment.  Then layer on top of this the fact that climate change costs and benefits accrue over time, so that discounting and intergenerational equity issues have to play a role.

Meanwhile, if topics such as climate change enter the core, some fundamentals get squeezed out.  What we could be left with is superficial coverage of everything.

One other point about the NAS workshop, very much related to the above comments:  Most of the people there believed very strongly that climate change is not only serious from an environmental impact standpoint, but they also believed that it is quite obvious that we need to do a lot about it -- in the  public and private sectors.  But when you get a bunch of folks with the same mindset, there isn't much consideration of other issues and opportunity costs -- all the attention is on climate change.  There isn't much clearer example of a "silo," something which most people are eager to criticize.  I think the goal of business schools should be to turn out leaders who are adept at leading the organizations of the future, keeping in mind all the possible problems and issues that those organizations might face.  Climate change is but one.