Now they have TerraPass, a clever eco-capitalism experiment. Launched by a group of Wharton Business School classmates, the startup sells a decal that drivers can slap on their windshields. The sticker price - $79.95 for SUVs, less for greener cars - gets invested in renewable energy projects and credits. The credits are traded through local brokers on the new Chicago Climate Exchange.
TerraPass lets consumers participate in an emissions trading system the US established in 1990. (Give credit to economist Ronald Coase, who won a Nobel Prize for the idea in 1991.) Under the system, industrial operations that spew less than their share of emissions can sell a credit to companies that fail to keep gunk out of the air. In effect, the dirtier factories can pay greener operations to do the work of cutting emissions. The approach has taken off worldwide, spawning a billion-dollar market.
And it's not just for big-time polluters. Today, farmers cash in on credits by collecting and processing cow dung, which produces globe-cooking methane. Land-owners earn credits by installing wind farms on their blustery fields, which top off the power grid with carbon-free electricity.
But until now, the Chicago Climate Exchange was off-limits to all but registered traders, and the transaction cost of buying credits piecemeal from small outfits was too high. TerraPass aggregates the money plunked down by guilty - ahem, environmentally concerned - SUV drivers, allowing them to participate in the market.
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