As part of the MBA program at the University of Pennsylvania, students recently founded a company that allows car drivers to easily and affordably negate most of the environmental impact of their cars. The idea behind TerraPass is simple. TerraPass allows individuals to tap into the growing market for carbon emission credits traded by large companies such as DuPont and IBM. These markets are structured in the same way as as the markets for sulfur emissions that were so successful in reducing acid rain.
Although the workings of these markets are complex, the end result isn't. Car drivers can completely offset the CO2 emissions of their cars for about $50 a year, without having to modify their cars or change their lifestyle. Compare it to a hybrid vehicle, which costs several thousand dollars more than a comparable non-hybrid, and offers a much smaller fuel efficiency gain.
It's kind of Kyoto for Cars.
TerraPass grew out of a class project on problem solving and design at the Wharton School. During the six-week span of the class, a team of students created the business - from product design to marketing to sales to fulfillment.
The idea sprang from Professor Karl Ulrich, who felt guilty about driving his Ford pickup on weekends between Philadelphia and Vermont. "I'm an environmentalist, but I need this truck," he explains. "On one of the trips it occurred to me that I'd be willing to pay to offset the impact of the truck."
He offered a no-interest loan to his MBA class to launch the web-based business. "Effectively, TerraPass tips the economic balance in favor of efficiency and renewable-energy projects that otherwise aren't viable," he says. Now, the power of these market-based mechanisms to effect environmental change with proven record in reducing industrial pollutants is available to individuals."
With automobiles emitting 20% of today's CO2, the TerraPass service is a simple, efficient way for citizens to get directly involved in combating global warming. TerraPass purchases collectively finance projects that reduce industrial CO2 emissions, offsetting their own contribution to global warming.
TerraPass prices range from $29.95 for hybrid vehicles to $79.95 for SUV and utility vehicles.
When asked about their target customer, TerraPass team members say, "The people our product initially appeals to are those who are already aware of the problems emissions create. The message we are trying to send is that you should take responsibility for the pollution that results from your driving, and we are empowering individuals to do this. As the TerraPass membership grows, we hope that owners of high polluting vehicles will take note and feel compelled to do their part."