The Sustainability Babel Fish

5 Pages Posted: 1 Jun 2011 Last revised: 30 May 2014

See all articles by Nalin Kulatilaka

Nalin Kulatilaka

Boston University - Department of Finance & Economics

Ory Zik

Massachusetts Institute of Technology (MIT)

Date Written: May 24, 2011

Abstract

We introduce a unifying language to quantify sustainability across multiple domains. The use of scarce resources is translated into their energy equivalents, by including upstream losses, conversion efficiencies, and externalities. We aim at developing intuition regarding both magnitude and cost to facilitate decision-making. Our basic unit of measure, called Energy Points (EP), is based on the energy content in a gallon of gasoline. EP computations rely on existing data streams such as bills and thus, easily measured, monitored, and verified. The framework captures local variation, reflects embodies energy, and is conveniently linked to economic measures through prices.

Keywords: energy efficiency, sustainability, climate change, environmental behavior

JEL Classification: Q4, Q2, H4, D81

Suggested Citation

Kulatilaka, Nalin and Zik, Ory, The Sustainability Babel Fish (May 24, 2011). Boston U. School of Management Research Paper No. 2011-10. Available at SSRN: https://ssrn.com/abstract=1851524 or http://dx.doi.org/10.2139/ssrn.1851524

Nalin Kulatilaka (Contact Author)

Boston University - Department of Finance & Economics ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
617-353-4603 (Phone)
617-353-6667 (Fax)

Ory Zik

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

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