10/20/2014 08:38 am ET Updated Dec 20, 2014

Why We Are Working With Colleagues in China to Develop Sustainability Metrics

I am in no way an expert on China, but one need not be an expert to understand that China's elite knows they are in the midst of a deep crisis of environmental sustainability. I visited Beijing last week to finalize a partnership between Columbia University's Earth Institute Research Program on Sustainability Policy and Management and the China Center for International Economic Exchanges. Our goal is to develop a set of focused, practical sustainability metrics that can be used by businesses and governmental agencies in China, the United States, and around the world. While there are a number of NGOs and governments engaged in similar work, our goal is to develop measures of the physical dimensions of sustainability, rather than the broader environmental and social justice indicators pursued by many other organizations.

The China Center for International Economic Exchanges (CCIEE) is a new and impressive Chinese think tank that has the ear of the government and is loaded with analytic talent. At Columbia, our sustainability metrics project is led by my colleagues Dr. Dong Guo and Dr. Satyajit Bose, along with a number of graduates of Columbia's Masters programs: Alison Miller, Kelsie DeFrancia, and Hayley Martinez. Last week, Dr. Guo and I met with our Chinese counterparts to outline a proposed work plan and begin discussing methodological issues. While China's effort at developing sustainability metrics is well-funded and directly connected to their government, our work is far from fully-funded and faces the gridlock of Washington's political world. Nevertheless, we believe that an equal and joint effort to develop sustainability metrics can have a profound impact on the effort to speed the transition to a sustainable economy.

Since the start of the 21st century, the Chinese economy has expanded dramatically, one of the true economic miracles of all time. Along with that economic growth we have also seen an unprecedented level of environmental degradation. Too much of China's land, water and air has been damaged. In Beijing last week, many people remarked how clean the air was compared to the week before. Even to a New Yorker, the air was still filthy and as the week went on, I experienced an unrelenting cough that took several days of "clean" Manhattan air to get rid of.

In the United States during the 1950s, '60s and early '70s, we experienced similar issues in many parts of America. A bipartisan consensus developed in this country and resulted in the National Environmental Protection Act (1969), the EPA (1970), the Clean Air Act (1972), and a number of other laws protecting the environment. When some extremists, namely Interior Secretary James Watt and EPA Administrator Anne Gorsuch Burford, tried to turn back the environmental clock during the first two years of the Reagan Administration, they were chased from office and replaced in 1983 by the original EPA Administrator, the moderate Republican William Ruckelshaus. It turned out, just as in China today, Americans really thought that breathing was important; there remains a broad consensus on the importance of protecting the environment.

This semester, a course is being taught at Columbia by Thomas Jorling and Leon Billings, two of the leaders of the bipartisan staff that wrote America's air and water pollution control laws. They will be discussing the "good old bipartisan days" this week, in a panel discussion moderated by Columbia environmental law professor Michael Gerrard. The discussion will be web-cast and is being filmed as part of a documentary about a time when we were able to focus on the national interest and put aside partisan interests. Jorling and Billings are hoping to teach us the lessons they learned about working across the partisan aisle in the hope that someday we will again have the opportunity to do what they once did.

While we have not enacted any major new federal environmental law for almost a quarter-century, we have been able to make substantial progress in cleaning up our environment with existing federal law with expanded activities by states, local governments, nonprofits and corporations. In the early 1980s, America broke the connection between the growth of pollution and the growth of our economy. America's economy continues to grow while the absolute level of pollution continues to shrink. According to EPA, since 1980, the U.S. GDP has grown by 145% and an index of the six most common air pollutants has declined by 62%.

While some of the reduction of pollution was caused by factory shut downs and the "export" of pollution to the developing world, most of the reduction was accomplished through serious and effective regulation of power plants, factories, and automobiles. My recent visit to China reinforced my impression that just as air pollution taught America about the importance of environmental protection, it is having that same impact in China today.

There is a myth, perpetuated by some self-interested business people, that one must trade off economic growth against environmental protection. It is true that an individual business may suffer costs and may even go out of business if it cannot figure out a cost-effective way to reduce their pollution, but the American experience clearly demonstrates that an economy can grow while pollution is reduced. Pollution control regulation forces innovation and modernization and can force an old business to reinvent itself. This turns out to be very useful in the emerging global economy, where businesses often compete against newer organizations, making use of innovative, less polluting and more efficient technologies. My clear sense is that the same intense drive and energy that has caused China's rapid economic ascent can also be devoted to its environmental sustainability.

At the (private or public) organizational level, sustainability can be seen as a conceptual framework for assessing the physical elements of an organization's material inputs, work processes, outputs and outcomes. This assessment requires transparent, reliable, valid and auditable measures. Measurement is important because, to once again paraphrase the management guru Peter Drucker, you can't manage something if you can't measure it. Without measures, you cannot tell if your management actions are making the situation better or worse.

These organizational-level measures can then be aggregated by industry or by geography with the ultimate goal of either being included in a nation's Gross Domestic Product or placed in a new indicator of a city, state or nation's progress toward a renewable, sustainable economy. I often say that the state of measurement in this field is relatively primitive and we have a long way to go. I am reminded about the time in the U.S. when every corporation self-reported their financial condition, making a true and fair public financial market difficult. After the market crash of 1929, during the New Deal era of the 1930s, the Security and Exchange Commission began the process of regulating corporate financial reporting leading to the development of generally accepted accounting practices. When coupled with professional and regulated auditing, it is now possible to have some faith in corporate financial reports. We need sustainability metrics to follow the same course and we need to develop generally accepted sustainability metrics.

In a global economy, we will need these metrics to be developed along similar lines in many nations. The hope of our Earth Institute team and our colleagues in the China Center for International Economic Exchanges is to contribute to the development of such a set of sustainability metrics. I believe this will be a decade-long process and envision an open and dynamic analytic effort to build these critical measures.