New York City’s pizzerias have recently taken the internet by storm, not because of the iconic flavours of their greasy pepperoni pizzas but because of a particular law surrounding them. On June 23, 2023, the New York City Department of Environmental Protection (DEP) set up additional rules surrounding cooking stoves in local restaurants in a bid to reduce emissions by at least 75%. The proposal sparked an online debate over how much small businesses contribute to global environmental issues and whether cracking down on them is the right move.
The New York Pizzeria Fiasco’s Silver Lining
On June 25, 2023, the New York Post uploaded a controversial article on the potential impacts of DEP’s new rules on New York City’s pizzerias, suggesting that the newly drafted regulation is designated to solely tackle climate change.
The article goes on to say that the DEP regulation targets coal-fired and wood-fired ovens, categorising them as the main culprits of the city’s air pollution. It also mentions the expensive installation and maintenance of the air filter system required to comply with the new mandate.
The news report adds the reactions of infuriated restauranteurs, pizzeria owners, and customers, implying that the regulation is a misfire on the true contributors of climate change and that it has instead falsely harmed small business owners.
“I’m all for responsible environmental practice but tell Al Gore to take one less private jet or something. Give me a break,” Saavi Sharma, a pizzeria customer, told the New York Post.
Many prominent figures have also turned to Twitter to oppose the new mandate. CEO of Tesla motors and Twitter owner Elon Musk also weighed in by tweeting: “It won’t make a difference to climate change.”
This is utter bs. It won’t make a difference to climate change.
— Elon Musk (@elonmusk) June 26, 2023
However, addressing climate change is not the main purpose of the regulation. The whole debate is constructed on misleading grounds made by the New York Post article. The mandate actually aims to tackle public health amid concerns over the city’s air quality.
“Generally, these new rules are being put in to limit the emission of particulate matter, odour, and similar pollutants that are really impactful to our health,” said Garima Raheja, an expert on the impacts of urban air pollution on public health.
The concerns are further emphasised following the recent episode that reminded New Yorkers of the threats of global warming. On June 7, 2023, the city’s skies were drenched in an orange haze due to the smoke from the Canadian wildfires.
“We’re talking about the wildfires and bad air from Canada? Workers with these coal-and wood-oven fired pizzerias are breathing in a wildfire every day,” said Donovan Richards, the lawmaker who passed the legislation surrounding the cook stoves.
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The proposal does not directly aim to reduce carbon emissions but rather particulate matter, which causes asthma and other respiratory issues. The other result of this proposal, however, is an improvement in climate conditions as well, since the fumes emitted in the cooking stoves contribute to global warming.
Despite the elaborate confusion, this article has yielded productive conversations about climate laws surrounding businesses of all sizes.
As millions of social media posts featuring the hashtag “support small businesses” prove, US residents have come together to help fellow business owners kickstart their careers, garnering support especially for owners who have been marginalised
As the New York City pizzeria debacle unfolded, many people have expressed concern over the effect of environmental regulations on small businesses, and whether it is truly fair to target them for climate control. The argument is often backed up with the logic that only big corporations should be punished by climate laws since they are perceived to have a much larger climate impact and more financial room for climate action.
However, do we truly understand the carbon footprint of small businesses, and how can we reduce it?
The Significance of Small Businesses
Anti-corporate sentiment has been emerging in society, penetrating through barriers of political polarisation. According to a 2022 report by Pew Research Center, negative perceptions of large corporations have been widespread in both Democratic and Republican parties in the US since 2019.
Simultaneously, the report shows, small businesses have garnered a cult following, with a whopping 80% of American adults saying that small businesses have a “positive” effect on the country.
On the other hand, when conjuring up images of companies producing climate change consequences, we often think of big names such as fast fashion companies H&M and Zara. Nonetheless, every business, no matter how big or small, has a trace of carbon footprint.
Small and medium-sized businesses (SMEs) play an important role in the economy, allowing anyone in the public to achieve their entrepreneurial dreams, which fosters great economic growth for countries as well. The World Bank found that SMEs are responsible for more than 50% of employment worldwide, with formal SMEs contributing up to 40% of GDP in emerging economies.
One small business undoubtedly generates little to zero significant impact on the environment but adding all small businesses into the equation is a whole other matter. Altogether, SMEs take up a staggering 90% of businesses worldwide, according to the World Bank shows. With each of them generating their own carbon footprint, one can already speculate just how much SMEs contribute to global climate change.
Nevertheless, SMEs do not operate in isolation. Many of them are interconnected with larger corporations. They provide big companies with raw materials, packaging, and production, forming a chain of business transactions embedded in carbon footprints. This supply chain is categorised as Scope 3 emissions – which are 11.4 times higher than operational emissions, also known as Scope 1 emissions – and are considered the hardest to reduce. These global emissions scale is according to the Greenhouse Gas Protocol.
Decarbonising All Businesses
As mentioned previously, the mantra of “support small businesses” has cultivated the mindset that the government should avoid enforcing stringent environmental regulations on SMEs. However, there is more to this than meets the eye.
Firstly, specifically targeting small businesses is a more intricate approach to tackling climate issues caused by business activities. For a better understanding, SMEs act as the roots of the entire scope of business transactions. They provide the most basic and essential minerals for the fruits at the top – large corporations – to grow and flourish. Environmental control on SMEs’ production inevitably influences the rest of the chain, prompting a collection of climate action. This phenomenon is already exemplified by the Covid-10 pandemic, where 57% of the supply chain experienced significant challenges, as shown by a 2020 survey conducted by Ernst & Young LLP (EY US). It concludes that, “when small business suppliers struggle, larger operations falter too.”
In other words, SMEs are the Achilles’ heel for large, seemingly indestructible, businesses.
Secondly, governments should indeed avoid exercising stringent laws and instead adopt feasible regulations to allow SMEs to operate. As shown in the New York City pizzeria controversy, most news reports only mention how the required air filter systems for the cook stoves could cost up to US$20,000. They mostly disregard the official proposal’s rule – if the establishment cannot achieve a 75% reduction in particulate emissions, a valid reasoning is needed for a 25% reduction instead. This kind of flexibility is required for SMEs, as they operate in diverse circumstances.
Additionally, SMEs should exploit the use of the United Nations’ SME Climate Hub, a non-profit global initiative that provides support for SMEs to pursue climate action through provision of resources, tools, and incentives. Currently, they have consolidated an achievable plan for SMEs to halve their emissions by 2030, and attain a net zero by 2050. The Hub also follows the 1.5C Business Playbook, where it documents the mechanics of gaining competitive advantage through adopting climate goals.
It goes without saying that larger corporations also need to have hefty environmental laws surrounding their climate change effects. However, these regulations need to be implemented worldwide. According to a 2018 research on where multinational firms emit carbon dioxide, the emission levels are found to be lower in countries with tighter climate laws. This goes to show that stringent regulations are actually effective. The problem lies in the fact that not all countries have strict environmental rules, allowing corporations to export their polluted production to countries with lax regulations. If every country cooperates and enforces feasible climate action, large carbon-emitting corporations will have nowhere to run off to.
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