The purpose of this document is to describe an organization focused on mitigating climate change and habitat destruction by allowing the consumer to create a demand for sustainable business practices via a product grading system.

1. Environmental Stewards of Capitalism
Dane Thompson
January 7, 2016
Abstract
The purpose of this document is to describe an organization focused on mitigating climate change and
habitat destruction by allowing the consumer to create a demand for sustainable1 business practices via a
product grading system. The process of providing the consumer with a greater power to affect business
policy will also generate revenue, which will be used to further protect our environment and strengthen
societal infrastructures.
The grades will be presented in the number of generations that humanity can continue to conduct a
particular set of business practices, if they were accepted as common standards, before either reaching a
level of greenhouse gas (GHG) emissions, which would result in dangerous anthropogenic interference2
(DAI) or biologically necessary resources (BNR) are depleted enough to prevent human populations from
being able to sustain themselves; these grades will be produced by applying them to the DAI and BNR
formulas.
I. Dangerous Anthropogenic
Interference Formula
T
he DAI formula requires the collection
of two sets of data: the emissions associ-
ated with the production, transportation,
and use of a product; and the DAI threshold3.
The symbols for this equation are as follows:
EPDsingle Emissions per dollar generated by a single product
Esingle Annual net emissions from a single product
Rsingle Annual revenue generated by a single product
Eall Global annual net emissions from all products via
a particular set of business practices
Rall Global annual revenue generated by all products
Ythreshold Number of years to reach DAI threshold
DAI DAI threshold in GHG units
G Number of generations to reach DAI threshold
Ygeneration Number of years per generation
The emissions per dollar from a single prod-
uct can be calculated by evaluating the follow-
ing statement:
EPDsingle =
Esingle
Rsingle
If all companies conducted their practices
with this standard of emissions per dollar, then
the annual global emissions would be:
Eall = EPDsingle ∗ Rall
The number of years to reach the DAI
threshold would then be:
Ythreshold =
DAI
Eall
And the number of generations to reach the
DAI threshold would be:
G =
Ythreshold
Ygeneration
=
DAI
Eall ∗ Ygeneration
1A business practice is sustainable if it satisfies the Environmental Protection Agency’s standard, i.e., "the conditions
under which humans and nature can exist in productive harmony to support present and future generations" (EPA 2015).
2As defined in the IPCC’s third assessment report. A concise summary of the relevant parts of this report can be found
in the article "Definining Dangerous Anthropogenic Interference" (Mann 2009).
3The DAI threshold can be found in the IPCC’s fourth assessment report and is equal to the GHGs that will raise the
Earth’s average temperature by two degrees Celsius (IPCC 2007).
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2. II. Biologically Necessary
Resource Formula
The BNR formula requires the collection of two
sets of data: the loss of BNR, i.e. the loss of nat-
ural capital, habitat, and habitable land, which
will be determined by measuring the pollution,
and natural capital used that is not renewed
in the production, transportation, and use of
a product; and the BNR needed to sustain hu-
man populations. The meaning of the symbols
in the equation are as follows:
Bsingle loss of BNR in the production, transportation, and
use of a product
Rsingle annual revenue generated by a single product
BPDsingle loss of BNR per dollar
Ball global annual loss of BNR determined by the
production, transportation, and use of a product
Bnet Bcurrent - Ball
Rall global annual revenue generated by all products
Pgrowth 1+ Percentage of population growth in N years
Bcurrent current levels of BNR
Ythreshold number of years to reach BNR threshold, i.e BNR
depletion resulting in the inability to sustain
human populations
Hall BNR needed to sustain human populations for the
current year
G’ number of generations to reach the BNR threshold
Ygeneration number of years in a generation
The loss of BNR per dollar for a single prod-
uct can be calculated by evaluating the follow-
ing statement:
Bsingle
Rsingle
= BPDsingle
If every company conducted business with
this standard, then the annual global loss of
BNR can be calculated by the equation:
Ball = BPDsingle ∗ Rall
In order to find the number of years before
reaching the BNR threshold, the minimum
value of N must be found in the following
inequality:
Ythreshold=min[N]{Bnet * N ≤Hall * N * Pgrowth}
And the number of generations before
reaching the BNR threshold can be calculated
by evaluating:
G =
Ythreshold
Ygeneration
III. Features of the grading system
The grade given to a product will be the lesser
of the two solutions generated by the DAI and
BNR formulas, i.e. G or G’. An average of the
two grades cannot be implemented because
it misrepresents the impact of a practice. All
of the grading data will be available to the
public online. The grades will be renewed an-
nually and presented on the products. Compa-
nies will be graded based upon a weighted
average of the grades of the products they
produce. Non-producing companies will be
graded upon their operations and a weighted
average of the products they sell.
IV. Implementing the grading
system
The implementation of the grading system will
occur over several years, as policies will need
to be put into place in order to make it feasible,
which includes, but is not limited to: mandat-
ing a grading time-line, providing incentives
for implementing minimum grade standards
for products being produced in or imported
into a country, and subsidizing the grading
process.
Subsidies
The intention of subsidizing the grading pro-
cess is so that companies do not heavily reflect
the expense of being graded in the cost of their
product. Reducing product inflation will pro-
tect a graded product’s marketability, allowing
the consumer to make informed ethical deci-
sions instead of monetarily restricted decisions
reflecting the limitation of their class.
Incremental grades
Implementation will be most easily achieved
by initially grading products in the commodity
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3. and energy industries. Because the grading
of commodity and energy products requires
the grades of non-commodity (NC) and non-
energy (NE) products, grading will need to be
incremental.
This incremental process will initially grade
commodity and energy products based on a
standard of primary environmental impact fac-
tors, i.e. factors that result directly from a
producer’s practices, the consumer’s use, and
the known impact of using products from a
third-party. Because these grades are not com-
prehensive, companies will need to be graded
based upon the same criteria of factors. Grad-
ing a company based upon a percent of factors
evaluated will skew the accuracy of the grade,
as factors vary in their impact. Maintaining
the same percent of factors evaluated is cru-
cial to the final grade. However, during the
incremental process a permitted range will be
employed.
Once these contingent grades are estab-
lished, certain NC and NE companies can be-
gin to grade their products; a portion of these
grades will be calculated by a weighted aver-
age of the commodities and energy sources
they choose to employ; graded commodity and
energy companies can assist in this process by
electronically updating who they sell a product
to. Once contingent NC and NE products are
calculated, commodity and energy products
can be more accurately evaluated, following
which, NC and NE products can also be more
accurately evaluated.
In order to grade a company the impact
of the buildings used will need to be assessed.
Building assessments will be put into a register;
the register will allow renovations to be easily
accounted for and building assessments to be
transferred to new owners if necessary.
Nuclear Energy
The risk factors associated with the produc-
tion, storage, waste, transportation, and use of
nuclear energy will be reflected in the grade
of nuclear energy producers. In order to ad-
dress these factors it will be necessary for nu-
clear energy producers to adhere to a certain
set of plant standards. The standards include:
sufficiently trained staff; a particular quality,
security, and maintenance of the facility; a lim-
itation on the area potentially affected by the
facility; and a facility density limitation, i.e. a
cap on the number of plants in existence region-
ally and globally. Nuclear plants that do not
adhere to these standards will be graded based
upon the historical likelihood of an incident oc-
curring at a sub-standard plant; this probability
will be multiplied by plants in existence. Also,
companies that choose to use nuclear energy
will have this information disclosed as part of
their grade.
V. Grades: Inter-industry
Quantification vs. Individual
industries adjusted for a
functional economy
Inter-industry Quantification
Projecting the impacts of a business practice
onto all revenue that is generated in the global
economy is not an accurate characterization of
a functioning economy for two reasons: first,
industries have inherent variance in their im-
pacts; and second, the process of grading two
products may result in accounting for an im-
pact twice.
The effectiveness of the grading system
does not depend upon its projections reflecting
a functioning economy.
The intention of the grading system is to
provide the consumer with the opportunity
to quantitatively judge, across and within all
industries, whether they support the relative
effect a product has on the environment in
exchange for the utility it provides; and in do-
ing so create a demand for particular business
practices. I have, however, developed a for-
mula, which is able to depict a functioning
sustainable economy. I have provided a de-
scription of this formula in an attempt to show
how its application is inferior to the DAI and
BNR formulas.
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4. Functional Sustainable Economy Formula
The FSE formula requires the collection of three
sets of data: the data necessary for the DAI
and BNR formulas, and the inherent impact
per dollar (IIPD) of a particular industry in a
functioning and sustainable economy.
The following equations calculate the ad-
justed EPDsingle and BPDsingle:
EPDnet = EPDsingle − IIPD
BPDnet = BPDsingle − IIPD
The Ythreshold and Ythreshold can be calculated
by the following equations:
Ythreshold = Rall ∗ EPDnet
Ythreshold = Rall ∗ BPDnet
And the sustainability grade can be converted
to generations by solving the following:
G =
Ythreshold
Ygeneration
G =
Ythreshold
Ygeneration
One of the drawbacks of this formula is
that it relies on individuals providing projec-
tions on the inherent impact of an industry and
its degree of necessity in the economy. Rely-
ing on the projections of individuals has the
potential to result in inaccurate calculations,
which would lead to businesses assuming an
improper level of environmental responsibility.
In contrast, the DAI and BNR formulas rely
solely on data collection.
VI. Revenue generated by the
grading process
If the grading process is established correctly
it will generate excess revenue, which will be
used to: further research, strengthen the soci-
etal infrastructure of the state/region the com-
pany is engaging business in, and purchase
land for the purpose of preservation.
Additional research
Money designated for additional research may
include funding studies on: climate systems,
ecosystems, alternative energy, clean technol-
ogy, political policy, and business practice im-
pacts.
Societal Infrastructure
The strengthening of a societal infrastructure
includes funding the means that provide access
to clean water, food, housing, health-care, and
education. These funds will be allocated to the
location, in which a company is conducting
business in; these funds will be proportional
to the producer’s expenses in those regions.
Elected officials governing the area of business
will be responsible for allocating infrastructure
funds. Officials maybe audited to ensure funds
are being properly allocated.
VII. Auxiliary features of the
grading system
Domestic production
There are two ways the grading system has the
potential to increase domestic production: first,
if companies are influenced to reduce their en-
vironmental impact and attempt to do so by
reducing the transportation of a product; and
second, if consumers and producers desire to
have infrastructure funds allocated to their area
of residence.
Employment
The effect the implementation of the grading
system will have on the job market is uncer-
tain. The majority of the jobs that are created,
to put the grading system into practice, will
seek to employ recent college graduates via an
international exchange program; this program,
which will require the completion of a particu-
lar course series, will allow individuals to be
exposed to different people and cultures, pro-
viding them with a perspective, which allows
4

5. them to become citizens capable of contribut-
ing more to the global community.
VIII. Addendum
In 2014 Noam Chomsky gave a lecture
at Northeastern University on what ruins
economies. He began by describing three fea-
tures a successful economy has, namely, "peo-
ple who are eager to work, plenty of badly
needed work that should be done, and ample
resources to combine idle hands with needed
work" (Chomsky 2014). Most of his remarks
following this introduction focuses on how the
failure of any of these features are contributing
reasons why economies fail. In the following
paragraphs, I will provide a partial synopsis
of Chomsky’s lecture, while interjecting how
the implementation of the grading system will
help facilitate the features of a successful econ-
omy.
Chomsky outlines four institutional prac-
tices that compromise the features of a success-
ful economy, namely: a reduction in funding
for federal research and development (R&D),
the support for the growth of financial insti-
tutions, undermining the positive features of
markets, and amplifying the negative features
of markets.
The grading system addresses the decline
in federal R&D by providing funding for re-
search and encouraging private entities to in-
vest in R&D for cleaner and more efficient tech-
nologies. It is irrelevant that this funding is not
federal because it addresses the more primary
concern, which is strengthening the R&D:GDP
ratio.
Chomsky mentions that the growth of the
financial sector is largely due to deregulation
and state power under-pricing risk. Unfortu-
nately, the grading system does not have much
influence on this sector because it does not
have much affect on the regulations governing
financial institutions or monetary risk policies.
The grading system strengthens markets by:
providing a portion of the data necessary for
consumers to be informed; funding education,
which facilitates rational consumers; and by
suppressing the rise of oligopolies. The sup-
pression of the rise of oligopolies assumes the
grading system also gives rise to an increase
in domestic production, which would allow
the means of production to be more readily
accessed by small businesses.
The grading system mitigates negative mar-
ket features by reducing the destruction of the
commons and externalities. The destruction
of the commons is reduced by acquiring land
for preservation via the grading fund. And
the reduction of externalities is accomplished
by converting externalities into legal mandates
and business expenses.
References
[Chomsky, 2014] Chomsky, Noam. "Noam
Chomsky (2014) ’How to Ruin an
Economy; Some Simple Ways’". Youtube.
https://www.youtube.com/watch?v=6mhj-
j0z-fk. Accessed: August 2014.
[EPA, 2015] "Learn about Sustainability".
http://www.epa.gov/sustainability/learn-
about-sustainabilitywhat. Accessed: Dec
2015
[IPCC, 2007] Intergovernmental Panel
on Climate Change."Fourth As-
sessment Report: Working Group
Three: Mitigation of Climate Change".
https://www.ipcc.ch/publications_and_d
ata /ar4/wg3/en/contents.html. Ac-
cessed: Nov 2015.
[Mann, 2009] Mann, Michael E. "Definining
Dangerous Anthropogenic Interference".
Proceedings of the National Academy of
Sciences of the United States of America.
http://www.ncbi.nlm.nih.gov/pmc/articl
es/PMC2657409/. Accessed: Dec 2015.
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