A group of Wharton MBA students is doing its part to help offset the effects of automobile pollution.
Last fall, under the direction of Operations and Information Management Department Chairman Karl Ulrich, 40 students launched a product known as the "TerraPass" -- a market-based product that allows customers to compensate for individual car pollution by investing in environmentally-friendly projects undertaken by other businesses.
TerraPass works by charging its customers an annual fee proportional to the size of their car. The company then invests the generated funds to help other organizations undertake energy-reduction plans that offset the original customers' individual pollution.
According to Ulrich, "TerraPass is able to find projects where we tip the balance in proportion to the environmental damage of your car."
Ulrich brought the students in his class a rough conception of the TerraPass, and the students created the name and logo and launched the product. He envisioned the TerraPass as a socially and environmentally beneficial project that could help the students merge the theoretical ideas they learned in class with practical applications.
The project was extremely successful, according to Wharton MBA student and TerraPass sales manager Tom Arnold.
To date, the company has sold over 200 TerraPasses, which helped to offset the effect of approximately 1,200 tons of carbon dioxide and generated $10,000 in profits.
"We took the company from a nebulous business concept to launch in about six weeks," said Arnold.
The students gained more than just profits from the experience, according to several members of the class.
Wharton MBA student David Chao -- the TerraPass spokesman -- said the class changed his conception of the MBA program. According to Chao, many people assume that the MBA program does not have real-world applications, and the class showed that "what we learn in school can be beneficial in the long run."
Fellow classmate Elizabeth Ulman similarly praised the class, adding that it "capitalized on everyone's experience before business school and increased their leverage afterwards."
According to Ulrich, dealing with real-world problem solving in class creates a very receptive audience.
"It's a good way to teach," he added.
The project was part of Ulrich's Operations and Information Management 651 class called Problem Solving, Design and System Improvement.
