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The Economics of Sustainability

An Interview with Environmental Defense Fund Economist Gernot Wagner
March 26, 2012
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In This Interview
Gernot Wagner, Economist, Environmental Defense Fund


Bachelor’s degree in environmental science, master’s and PhD in political economy and government, Harvard University

Master’s in economics, Stanford University

Career Highlights

Economist at the Environmental Defense Fund, 2008 – present

Adjunct professor of energy economics at Columbia University’s School of International and Public Affairs, 2011 – present

Peter Martin Fellow at The Financial Times, 2007

Consultant at The Boston Consulting Group, 2007 – 2008


Gernot Wagner is an economist with the Environmental Defense Fund. In his book But Will the Planet Notice? How Smart Economics Can Save the World, he argues that individual action, while often guided by the best of intentions, may not lead to noticeable, lasting change. In fact, it can even be counterproductive. Knut Haanæs, global leader of BCG’s Sustainability Initiative, recently sat down with Mr. Wagner to discuss the potential of market forces and economic incentives to induce real change, as well as the link between sustainability and competitive advantage.

You seem to live your life in a way that supports the ideals of sustainability. And yet last year you published a book that says individual action won’t save the planet. Why not?

I am a vegetarian. I don’t have a driver’s license. I try to do all the right things and certainly want to teach my one-year-old these values. But I’m under no illusion that these individual actions make a difference to the wider outcome. In the end, it all comes down to policy. That even goes for companies. Wal-Mart recently committed to decreasing its carbon footprint by 20 million tons over five years. That’s great. It’s also tiny relative to the 6 billion tons the U.S. emits every year. Even Wal-Mart’s commitment can only make a difference if and when it leads to fundamental policy change.

The trick, of course, is getting from here to there. Most environmentalists tend to assume that green behavior will lead to green policies. I’m not so sure that link is quite as clear as we’d like to think.