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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.

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