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How the carbon charge works

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In September of 2016, the Carbon Charge Committee was established to manage the Carbon Charge Program. To understand the program and its implications, we ask: what is Swarthmore’s Carbon Charge Program? And what is its significance of the program outside Swarthmore?

According to Climate Action Senior Fellow, Nathaniel Graf, the Carbon Charge Program has four primary goals: first, to provide a platform to educate and engage the community with carbon pricing solution; second, to incentivize reductions in Swarthmore’s emissions; third, to provide capital for projects that reduce our emissions; and fourth, to build momentum for state, national, and global implementation of carbon pricing.

According to the Swarthmore sustainability website, on-campus implementation of the program consists of three components. A school-wide levy on departments for college carbon emissions has been  implemented, though not yet fully developed. The total tax was calculated by multiplying the college’s carbon emissions by the social cost of carbon, and paid for with a 1.25% levy on all departments and by voluntary contributions.

“Yale University was the first school to institute an internal carbon charge; they have a sophisticated structure in which departments and offices are charged proportionally for their own carbon emissions. At Swarthmore, we don’t yet have sufficiently fine-scale tracking of our sources of emissions to create an analogous structure, so right now we are charging for school-wide emissions in proportion to budget size,” said Graf.

Then, the revenues from those charges is used to support renewables, efficiency, metering, and education projects. finally, a shadow price on projects, showing the social cost of the carbon emissions of the project, is implemented to encourage less carbon-intensive construction projects.

“The money is loaned out to different sustainability focused projects on campus. There was just an article released by the college about LED lights being put in the Fieldhouse in the athletic facilities, and that money was from the Carbon Charge tax,” said Nicholas DiMaio ’19, this academic year’s President’s Sustainability Research Fellow.

According to Graf, a primary goal for the Carbon Charge Program is to provide a platform to educate and engage the community with carbon pricing solution, finding more effective ways to tackle climate change.

“I think what’s really important about carbon pricing is that we’re looking to set an example for other institutions, as well as build political will from students on campus to bring these beliefs to their own community and make a difference. Because ultimately one institution doesn’t make that large of a difference, but if several institutions, and eventually local, state, and national governments implement the policy then is to make a huge difference worldwide,” said DiMaio’19

With no current national policy to cap carbon emissions, the college has put its weight behind the movement to limit carbon emissions. The college is one of the first higher education institutions to endorse such a policy.  

“President Smith was the second president to add her signature to the Put A Price On It campaign’s public letter, endorsing a price on carbon and calling on elected officials to take action towards carbon pricing legislation. She went beyond that initial signature by working with the presidents of Wesleyan, Pitzer, Dickinson, and Vassar to share that letter with other college and university presidents, which resulted in a total of 36 schools that have now signed on,” wrote Graf in an email.

In 2009, the Waxman-Markey cap-and-trade bill passed the House of Representatives, but was never brought to a vote in the Senate. According to Graf,  the next time around it is important to have strong mass support for such a bill to pass. And Swarthmore hopes to lead and engage the community to help put a price on carbon.

According to Graf, students who are part of the Sustainability Office or on the Carbon Charge Committee play a strong roll on campus. Currently, the Carbon Charge Committee is working on a weekly newsletter, infographic posters, a community forum, and an op-ed about carbon pricing. Some of the students also engage the community outside of Swarthmore.

Lamia Makkar’21, one of the two first-year student interns for the Office of Sustainability spoke about her work.

“I helped to organize the SCPA conference in October, developing tools and resources for the participants from other schools. Since then have worked on maintaining the network of students and helping the Swarthmore team that is trying to get endorsement from Delaware County Council.”

Any students interested in carbon charge of sustainability is encouraged to reach out to Nathaniel Graf at sustainability@swarthmore.edu, or Nick DiMaio ’19.

With enough support from the community, the college would be more well equipped to lead its peers in a worldwide endeavor to combat climate change.

Internal carbon charge seeks external change

in Around Campus/News by

This year, the college instituted an internal carbon charge in an effort to reduce its carbon footprint and eventually become emission neutral. The carbon charge is imposed on the college by itself, and which is intrinsically difficult to implement. The idea of carbon pricing is a policy idea commonly for mitigating carbon emissions on a national scale, but Swarthmore and other institutions have implemented a version of carbon prices on themselves.

The college is also a leader in the push for a nation-wide tax on carbon, President Valerie Smith signed the Letter on Carbon Action, which was a letter sent by colleges and universities to the Trump administration encouraging him to honor the Paris Climate Agreement, make sure policies are based on the scientific and technical facts, and invest in a low-carbon economy. The college also endorses a nationwide carbon tax and has advertised their advocacy heavily on the college’s official social media. The carbon charge, as well as the advocacy for the national carbon pricing, is an attempt by the college to help combat climate change and is the primary way that Swarthmore is trying to mitigate climate change.

Swarthmore’s carbon charge was modeled after Yale and Princeton’s internal carbon charges, and a goal of the charge is to serve as a model and help advance the case both for internal charges at other institutions as well as for nationwide carbon pricing. Swarthmore’s internal carbon works by raising money for a carbon fund which will be used for sustainability projects.

The charge consists of three parts: a fee levied on department budgets, a shadow price on energy for future projects, and the carbon fund. The fee charge placed on department budget funds the carbon fund. The fee is a flat tax on departments, and the shadow price is an added fee on energy that makes the cost of energy higher to the college than it would be without the self-impose shadow price.

Climate Action Senior Fellow Nathan Graf believes that the carbon charge has been successful in its first year of operation.

I think the Carbon Charge program has been fantastically successful, in particular as a platform for education and engagement on carbon pricing solutions. The baseline levy for the Carbon Charge is currently 1.25 percent of department and office budgets, exclusive of salaries and benefits, which totals about $300,000. For next year’s charge, several departments stepped up and voluntarily contributed an additional $40,000 to the Carbon Charge. I think that level of generosity reflects positively on the program and speaks to the support it has in the campus community,” he said.

Graf also explained what the money raised by the Carbon Charge will be used for.

“The Ecosphere Executive Committee granted final approval for a Green Revolving Fund a few weeks ago. The GRF will use the revenues for the carbon charge on projects that will reduce our emissions and save the college money in the long run. We’re working with Facilities to use much of the first year’s revenue to fund LED lighting upgrades on campus,” he said.

The charge was developed by members of the Swarthmore community including faculty, alumni, and members of the administration. Professor of Economics Stephen Golub highlighted the importance of private institutions like the college instituting changes in light of the lack of climate.

“The carbon charge was the result of the concern about sustainability and climate change and so on, highlighted by the divestment movement, again with discussions we had within the department, we thought the college should do something … It was an attempt to see if we could come up with something we could do concretely about climate change at this college and link up with the national movement to price carbon, that national and international movement, which to economists is the most promising thing you can do,” he said.

Golub also explained the charge in economic terms.

“The idea is that greenhouse gasses and climate change are …  a negative externality [a bad effect on people not involved in a particular purchase], and you can’t leave that to the private market. You have to either regulate it, or put a price on it. There are a number of advantages to pricing over regulation, and we need to do this. This needs to be done on a national and global scale, voluntary efforts aren’t enough. In the absence of the federal government doing anything, individual institutions can step up to the plate,” he said.

The structure of the Carbon Charge is a flat tax on departments, meaning that the charge is not reflective of their actual carbon usage, which would not create an incentive for members of the department to change their carbon usage.

[Carbon within departments] is very difficult to price. How would [the] economics department reduce its carbon footprint? Well, we could turn the lights off, we could shut off our computers, we could make sure our windows are closed, and so on, but there’s no way at present to measure or price that because the economics department is part of Kohlberg hall, and even in Kohlberg, even if we were to do this together with the other departments, there is no way to monitor that very easily in Kohlberg at present. It’s very, very difficult. For Yale, it is a bit easier because they have different schools, and they can monitor that for different institution within Yale,” he said.

Golub also praised the work that has been done by the college and stressed that the carbon charge was part of a larger movement.

“This is the first year, and my take on it [is that] I think amazing progress was made in one year considering the difficulty of this. Again, it’s kind of a crazy thing for places to tax themselves, the government should be taxing us. It’s awkward to implement, considering the difficulties of this, [but] we’ve done a great job […] Any one person or institution can only do so much, but there are two reasons that it matters a whole lot. First of all, everyone should do their part. We’re doing our part, but maybe more important is the signal that it sends out there to the world: that we care; we are a prestigious place, even if small; and that what we can do makes a difference, and if others see that we’re doing this, [then] we’re part of a movement,” he said.

Swarthmore implements a Carbon Charge, but what will be its effects?

in Around Campus/News by

This year, the Office of Sustainability is implementing a carbon charge on each department at the college. Swarthmore and Yale University are currently the only two institutions of higher education to impose such a charge for carbon use. The charge will be equivalent to 1.5 percent of each department’s budget and will raise about $300,000 this year.

The charge is being implemented after a group of faculty recommended creating an internal cost for carbon last year. The money from this fund will be spent on projects to improve sustainability at the college. A Carbon Charge Committee will be formed to determine how the money will be spent.

The sustainability office hired Nathaniel Graf ‘16, as well as two student sustainability fellows, to research the implementation of the carbon charge and suggest future directions for the college to take to increase its environmental friendliness. The sustainability office has grown from one to three full-time staff members in the last year. However, it is unclear who will be on the carbon charge committee and  how the money raised from the charge will be spent.

Professor Stephen Golub of the economics department explained that the carbon charge came out of informal discussions with a group consisting mostly economics professors, including himself.

“The original idea was to have some sort of a shadow price. That is, when you build a building, you look at the costs of productions of building the building and you also include the cost of carbon emissions.”

Golub explained that idea of a carbon charge grew out of that cost, and the administration picked up the idea and implemented this year.  

Chair of the engineering department Carr Everbach said that the carbon charge would have a small but not unfelt effect on the department’s budget.

“Engineering will have to pay about $800 this year out of our budget.  While this is a relatively small fraction, it is a lot of money to a student we might pay to work as a grader or lab assistant.  We will probably just shuffle our money around slightly differently this year; for example, we may not upgrade some equipment as quickly,” said Everbach.

Everbach explained that the department’s budget has not increased since 2010, which meant that even small cuts put some strain on the department.

While Everbach noted that the new Biology, Engineering and Psychology building would have more efficient heating and cooling systems, he said that the department was limited in its ability to reduce its carbon footprint when it did not have data on its own electricity usage.

“We have no idea how much electricity we use annually… If we knew the carbon costs of our actions and had immediate feedback, we could make better decisions.  Another example:  all faculty travel should be logged in regardless of how booked, and a carbon estimate made and tallied by the college.”

The carbon charge is being implemented and studied by the sustainability office. Graf, who graduated last year with degrees in biology and chemistry, was hired specifically to study the carbon charge. He explained he would have several different roles in his job.

“Broadly, my job will be to support the Carbon Charge Committee in their work, mentoring and working with the President’s Sustainability Research Fellows on the carbon charge, and helping other colleges and universities explore internal carbon pricing at their own institutions.

When asked about possible uses for the funds, Graf offered a number of possibilities: “The funds from the Carbon Charge may be used for renewable energy installations, energy efficiency projects, improved metering, and education/behavior focused initiatives.”

Graf also brought up the idea of a “green revolving fund.” This fund would be a pot of money that departments could draw from to offset the cost of making purchases of more sustainable goods-for example L.E.D. light bulbs, which are more efficient but also more expensive than regular light bulbs. Graf also emphasized that a big goal of the sustainability office was to increase knowledge among students about what they could do to combat climate change.

The lack of data on the electricity usage of individual departments is a problem the Sustainability Office is also examining. Sustainability Coordinator Melissa Tier, ‘14 explained that, while the office has some data on electricity usage, it would not be enough to implement a carbon charge that was based on the actual greenhouse gas emissions of individual departments.

“Metering is currently used for facilities and sustainability staff to keep close track of energy data. We don’t have the metering to analyze [individual departmental emissions] yet,” said Tier.

Tier explained that more comprehensive metering would be critical to developing a more rigorous carbon charge in the future. “We don’t have a one to one ratio of buildings to departments. Because our metering is very high level, we can’t make distinctions between departments in the same building. The Science Center has a lot of high energy users in the building, so how do we distinguish between, say, physics and CS?”

In addition to the carbon charge, the college also purchases so called “carbon credits” to offset greenhouse gas emissions. These purchases are not funded by the carbon charge and go towards things like planting trees, which reduce the amount of carbon in the atmosphere. Without the purchase of carbon credits, the college’s total carbon emissions have actually been increasing in the last few years. Tier explained that the sustainability office was aware of this issue.

“We are aware that purchasing RECs to offset our emissions is not sufficient by itself.”

Some students expressed the belief that while the carbon charge was an appropriate measure, it was not enough. Stephen O’Hanlon, a leader in the Mountain Justice movement, thinks the college can and should do more.

“The carbon charge is a step in the right direction but it is nowhere near enough and not in line with the scale and scope of the climate crisis …in order take the climate crisis seriously as an institution we need to do everything we can to create political change.”

While the college is clearly devoting significant resources to sustainability efforts, data shows that Swarthmore’s carbon emissions have actually been increasing in the last several years. It remains to be seen if the efforts by the college will actually translate into real reductions in emissions of greenhouse gases.

Why the carbon charge is welcome but no alternative to divestment

in Op-Eds/Opinions by

This past weekend, the Board of Managers at Swarthmore College approved an internal charge on greenhouse gas emissions. We should mark what appears to be an initial step toward developing a carbon pricing model. However, while welcome, the plan is no alternative to divesting the institution’s $1.9 billion endowment of fossil fuels.

I have had the privilege of both co-authoring the white paper that underpinned the faculty resolution calling for divestment and joining the working group that developed the proposal for the new carbon charge plan. As I write this column, it is not yet clear to what extent the Board adopted the working group’s proposal, but let’s assume for now that congratulations are in order all around! The plan was designed to collect a fee from each department to begin registering the social cost of each metric ton of carbon (or its equivalent in various gases) that the college emits (limited for the moment to the physical plant, electricity use, and emissions associated with planned construction) in order to fund sustainability projects. It also calls us to bend our intellectual energies toward better understanding the social costs of carbon through our teaching, learning, and research and then apply our growing knowledge to the pricing scheme. Why is all this important? It urges us down the long road of building sustainable infrastructures that will be necessary, if we survive the climate crisis.

However, the carbon charge leaves invisible the role of investment capital in sustaining an industry that is playing a dangerous profit-fueled game with our futures, a game that we underwrite and legitimize with our investments. It leaves unexamined the strange fiction that the only appropriate metric for assessing financial investments is financial return, a position that wouldn’t bear scrutiny in most, if any, Swarthmore classrooms. Yet, it is enshrined in the Board of Managers’ 1991 guideline that the “Investment Committee manages the endowment to yield the best long term financial results, rather than to pursue other social objectives.” Do we really believe that our current investments have no impact on social conditions?

Alone, the carbon charge assumes that we, consumers of fossil fuels, are solely responsible for the dilemma in which we find ourselves as a species. Don’t get me wrong, we do bear responsibility, and the new initiative is a step in the right direction. However, we also know that corporations go to great lengths, through marketing and lobbying, to shape the political, social, and economic landscapes in which they operate. Rest assured that while we try to diminish our consumption, fossil fuel companies on the Carbon Underground list will be using our investments to make the task as difficult as possible.

The new carbon charge plan also assumes there is a glide path of declining consumption that can keep global temperatures below 2 degrees Celsius (never mind 1.5 degrees). Sustainability initiatives funded by the carbon charge should be undertaken for the long term common good, but to address the climate crisis, they would have been more appropriate thirty years ago, when the public became aware of global warming. Unfortunately, as the fossil fuel industry actively suppressed climate science, we let those decades pass, and we now find ourselves in a catastrophically difficult situation.

Now, robust intervention is necessary. The mitigation scenarios that could keep global temperatures within 2 degrees Celsius require carbon sequestration technologies that don’t yet exist and a global price on carbon to have been agreed in 2010. Consequently, we need direct regulation of the extraction of fossil fuels accompanied by massive support for research and development of alternative energy, humanitarian aid, and preparation for climate impacts in vulnerable areas.

Through divestment, the college can join other institutions and use its privileged status to signal to world leaders that they can and must take bold steps to regulate the extraction of fossil fuels. Millions of vulnerable people are at severe short term risk (estimated by DARA and the Climate Vulnerable Forum at 6 million per year by 2030). Even the college itself is under threat.

Our students have already done the heavy lifting by launching and building an effective global campaign. We know this because our college representatives at the COP21 summit in Paris reported back that UN President Ban Ki Moon cited the importance of the divestment campaign as part of “a rising global tide of support for a strong, universal agreement,” declaring, “All of us have a […] duty to heed those voices.” Faculty, students, many alumni, and at least six distinguished honorary degree recipients understand President Moon’s perspective, and I expect some managers on the board do as well. After all, the optional Green Fund that the board established for new donations signals that the 1991 guideline is not water tight.

For those in civil society with cultural and economic capital, divestment remains an important tool in our toolbox, and we have a responsibility to use it. As we publicly demonstrate to our political leaders how to say no to fossil fuel companies, we should press them for an ambitious global carbon price, restrictions on fossil fuel extraction, and a plan to freeze the development of new reserves.

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