U.S. States & Regions
States and regions across the country are adopting climate policies, including the development of regional greenhouse gas reduction markets, the creation of state and local climate action and adaptation plans, and increasing renewable energy generation. Read More
City-level Climate Leadership in Boulder: The Climate Action Plan Tax
Cities across the United States are using a range of policy options to achieve their climate mitigation goals. One example is Boulder, Colorado, which has a long history of taking climate action, and is using a market-based approach to both reduce emissions and fund mitigation programs. In 2006, the city passed Initiative 202, the Climate Action Plan (CAP) Tax Initiative, which became the nation’s first directly voter-approved carbon tax. The tax charges consumers based on their fossil fuel-based electricity consumption, and the revenue is used to fund energy efficiency and renewable energy programs.
What if you held a sale and customers bought hardly any of your product? You might conclude that your product wasn’t very popular. If your product happened to be carbon allowances, essentially permission slips to emit carbon pollution, that lack of popularity sounds like a good thing for the climate.
This is essentially what happened last week when California and Quebec, who have joined their carbon markets, announced the results of their most recent auction of allowances. Companies who must buy allowances decided they didn’t need the full amount being offered, presumably because their emissions are declining.
California and Québec began their carbon markets in 2013, and the partners have held joint auctions of allowances every three months since November 2014. Each jurisdiction sets a limit on nearly all fossil fuel combustion at an amount that declines each year (the cap). Businesses responsible for that fossil fuel combustion have to buy allowances at auction to cover their emissions.
Historically, businesses have bought more than 90 percent of the allowances offered. But at the most recent auction, only about 10 percent of the allowances were sold.
This is great news. It means that carbon emissions are going down, and at a faster rate than the policy requires. If emissions were going up, prices at auction would be high. If emissions were going down at the same rate as the cap, then prices might be low but the auction would still sell out.
Market forces, like declining costs of renewable power, are part of the reason why emissions are declining. Businesses can use cost-effective alternatives to fossil fuels in their operations.
Also factoring into the results are the numerous other policies California and Québec have in place to drive down emissions, including ones aimed at increasing energy efficiency. That means businesses use less energy overall.
Is there any reason this might be considered bad news? Well, if you were counting on the money from the sale, it’s a problem.
California has anticipated generating billions in revenue through 2020 from the allowance auctions. But with few allowances sold, that state revenue source drops dramatically. California’s auction revenue is directed to various clean energy programs across the state, which means those programs could be in jeopardy if auction sales remain low.
So, is this an example of cap-and-trade working or not working? I would argue this is how cap-and-trade is supposed to work. The government sets a cap based upon its climate goals, the cap creates a price in the market, and companies incorporate the carbon price into their business decisions. If emissions are low (more accurately, if they are lower than the cap), then businesses don’t buy carbon allowances, pure and simple. Both California and Québec agreed upon rules for handling unsold allowances before their programs started, so businesses know what to expect.
A larger and more difficult question is whether this is an example of carbon pricing working. In both jurisdictions, the cap-and-trade program is only one of many policies aimed at reducing emissions. It’s unclear at the moment to what extent the carbon price is driving down emissions (and allowance demand) versus other policies. A sophisticated statistical analysis is required to answer that question, and as the cap-and-trade program continues there will be observations to enable just such an analysis.
There is often a heated debate around implementing new policies, and it is not unusual to hear predictions that regulating carbon emissions will cause economic doom. But time and again, experience has shown that businesses adapt quickly to new conditions and keep doing what they’re good at – giving us the products and services we want to buy. That they’re doing this while keeping their carbon emissions below a set level is something to celebrate.
|In Philadelphia, officials collect energy use data from schools, hospitals, labs and office buildings, using the information to identify energy and cost savings.|
Cities can be the leaders and heroes in our climate crisis if we can build the right relationships to empower them.
Whether it’s because their governments can be more responsive, or because they are becoming so interconnected, cities are playing a prominent role on the international stage in galvanizing climate action.
Starting with the groundbreaking Mayors Climate Protection Agreement in 2005, city initiatives like the Compact of Mayors and the Carbon Neutral Cities Alliance are evolving to connect cities with each other to exchange knowledge and achieve economies of scale for new technologies. This month, mayors around the world announced plans to push for investments in climate-friendly urban infrastructure, particularly in developing nations.
But the transformation we need requires more than connecting cities to one another. Cities also need to be connected to other levels of government and to the business community.
Barriers to Action
Two new reports from C40 Cities (Power Behind Paris) (Unlocking Climate Action In Megacities) highlight obstacles stopping cities from enacting transformative climate solutions. First, cities operate within a larger system of governments that affect their ability to act. Second, they rely on businesses to implement solutions to achieve a low-carbon, resilient local economy.
You could look at these as barriers or simple truths, but either way, the fact that cities rely on external entities is important to keep in mind. To combat global climate change, we cannot expect any institution to do it alone.
The C40 reports point to the need for better vertical integration with governments, and stronger collaborative relationships and practices with the private sector.
Examples of Leadership
Putting this into practice is difficult but achievable.
For example, to achieve its goal to reduce the city’s carbon footprint, Philadelphia had to address energy use in buildings, the city’s largest source of emissions. To establish its energy benchmarking policy, which collects and publicizes energy use for non-residential buildings over 50,000 square feet, the city had to work with local school officials, universities, and commercial real estate companies. The city collects energy use data from schools, hospitals, labs, office buildings and more that can be used to find energy and cost savings.
The city of Phoenix has set a goal to get 15 percent of its electricity from renewable resources by 2025. To reach that goal, it has partnered with the private sector, investors, and the state to finance and develop solar power installations on public and private lands, including the airport, a landfill, and a water treatment plant.
Steps like these can help states implement the Clean Power Plan, and help the U.S. close the gap to reach its emissions-cutting goals under the Paris Agreement. Despite this, cities have been largely outside-looking-in when it comes to serious conversations on designing and implementing state, federal and international climate policy.
An Integrated Approach
How much faster could we tackle our climate and energy challenges if we took a more integrated approach? The potential is great; for every Philadelphia or Phoenix there are a dozen more cities that aspire to achieve similar success.
For these reasons, C2ES is promoting collaborative approaches that result in integrated 'ecosystems' of policies and programs. Our Solutions Forum fosters new relationships among cities, businesses, and states on key issues. We are also helping cities work with local businesses to establish climate resilience plans that leverage both public and private resources.
City-city initiatives are critical to galvanize support for and increase understanding of transformative climate and energy solutions. But putting these solutions into practice will take on-the-ground collaboration with other levels of government and businesses.
The state of New York has passed a budget that includes a new EV purchase incentive that will provide up to $2,000 for eligible buyers of an all-electric vehicle, a plug-in hybrid EV, or a hydrogen fuel cell vehicle. Meanwhile in Minnesota, legislators have been considering an EV purchase incentive.
The CEO of the Freedom Foundation of Minnesota criticized EV purchase incentives as “a reverse Robin Hood scheme,” without the green tights, that takes money from the many (taxpayers) and subsidizes the purchases of the few (elites who buy EVs). How accurate is the assertion that the wealthy benefit the most from purchase incentives?
A free EV data tool from the New York State Energy Research and Development Authority can provide some insight. Developed with support from C2ES, EValuateNY gives users access to wide-ranging data sources from New York State’s EV market and allows easy comparisons of the factors that affect EV sales. You can find more about the tool in a previous blog post.
Our initial assessment, examining the period before the purchase incentive program has been implemented, shows that the EV market extends well beyond New York’s wealthiest counties.
Using the U.S. Census Bureau’s data on median household income by county, we established three income brackets to compare wealth between counties. Next, we broke down EV registrations by county and income bracket from the beginning of the EV market (2010) to the most recent data in EValuateNY (2014). The results show that counties with high median incomes account for slightly less than half the state’s total EV registrations.
Figure 1: Distribution of EVs by Income Bracket and County (2010-2014)
Therefore, EVs are not solely purchased in high-income counties, though households with high incomes are found in each county. However, EV registrations in three high-income counties (Suffolk, Nassau, and Westchester) account for more than 43 percent of the state’s total registrations, but only about 22 percent of the population. Clearly, these high-income counties have a higher rate of EV registrations. To dive deeper, we used EValuateNY to plot the rate of EV purchases per 1,000 vehicle registrations by county and income level, shown in Figure 2. Using a rate of EV purchases helps eliminate other factors that may affect the data, such as population or the rate of vehicle ownership. We also added the total number of EV registrations as the size of the bubble representing each county.
Figure 2: Household Income with Rate of EV Purchases and EV Registrations by Income Bracket and County (2010-2014)
This chart indicates that income may have a positive effect on the rate of EV registrations. High-income counties’ rate of EV purchases per 1,000 vehicles is higher than the range of low-income counties. With some notable exceptions, it’s also higher than the range of medium-income counties.
EValuateNY helped establish two findings[i] about the effect of income in New York State’s EV market:
1. Counties with low and medium median incomes make up more than half of the market; and
2. Residents of high-income counties may be more likely to purchase an EV than residents of low- and medium-income counties.
So, would New York’s forthcoming purchase incentive rob from the poor and give to the rich? This could not be entirely true, since more than half of all registered EVs are in low- and middle-income counties, and residents in these counties would arguably benefit more from $2,000 than residents from high-income communities. However, there may be some validity to the argument that on an individual basis, residents of high-income counties would benefit more from the purchase incentive because they may be more likely to buy an EV.
From a policy perspective, the purchase incentive is designed to promote EV deployment, reduce greenhouse gas emissions, and invest in the state’s economy. The program is not designed with any specific social equity goals, but New York legislators could address any potential wealth disparity by instituting an income cap, as California recently did.
The value of purchase incentives in spurring the EV market should not be lost in the discussion of income, though. A recent report by the Stockholm Environment Institute highlights the need to reduce EV price premiums as a means of encouraging consumer adoption. The effect of purchase incentives on state EV markets has been demonstrated over the past year after Georgia eliminated its $5,000 all-electric vehicle tax credit, and EV sales fell sharply.
New York State’s purchase incentive is a helpful tool for putting more electric vehicles on the roads. All New Yorkers, not only the wealthy, benefit from the reduced greenhouse gas emissions from having EVs using some of the least carbon-intensive electricity in the nation.
[i] The strength of any correlation is difficult to establish, as EValuateNY’s user interfaces are designed to provide high-level insights. A regression analysis that provides confidence intervals may be required to better understand the significance of income on counties’ rate of EV uptake. Users may conduct advanced analyses by directly accessing EValuateNY’s databases.
C2ES recently headed to Anchorage, Alaska, for a two-day Solutions Forum workshop to help Mayor Ethan Berkowitz launch an effort to make the city more climate resilient.
While many cities have undertaken resilience efforts, Anchorage is integrating the corporate community into its efforts as few others have done. About 50 business leaders, city, state, federal and tribal officials, nonprofit organizations, and other experts shared their experiences addressing climate change impacts and enhancing resilience.
Alaska is on the front lines of climate change. Businesses, cities, and Alaska Native communities are all experiencing the impacts. Alaska has warmed at more than twice the rate of the rest of the United States, and Anchorage experienced its two warmest years on record in 2014 and 2015. The region has also seen less snow than normal, with 2015 snowfall totaling about half the average.
These changes have already affected winter recreation activities, important to the economy and also the spirit of a city that prides itself of having fun in the cold. This year, a trainload of snow had to be dumped on Anchorage’s streets for the ceremonial start of the iconic Iditarod sled dog race.
More frequent icing conditions and low visibility caused by warming are affecting aviation—an important mode of transportation in a state where more than 80 percent of the communities are not served by roads. Warming temperatures have also contributed to earlier snowmelt, which can lead to a month-longer fire season.
Anchorage is no stranger to preparing for extreme events. Because of Anchorage’s experience with disasters, from earthquakes to wind storms, many aspects of the city are well prepared with existing planning structures, coordination efforts, and ongoing tracking in place.
The private sector also is keenly aware of how external events can affect their employees, customers, and community. Companies’ experience with risk management and emergency management plans and drills can be coordinated with city and state agencies to build and maintain local resilience.
Workshop participants worked through the Disaster Resilience Scorecard, a tool developed by IBM and AECOM and used around the world. The scorecard helps cities establish a baseline of their current level of disaster resilience, identify priorities for investment and action, and track their progress in improving their disaster resilience over time.
Now that Anchorage has developed this baseline, C2ES will continue to work with stakeholders to explore these insights and questions that follow to helping businesses, states, and cities in Anchorage and beyond collaborate on climate resilience.
Key Insights on Collaboration for a Resilient Anchorage
C2ES held a two-day Solutions Forum workshop in March 2016 in Anchorage, Alaska, focusing on opportunities for collaboration in building a climate-resilient Anchorage. About 50 business leaders, city, state, federal and tribal officials, nonprofit organizations, and other experts shared their experiences addressing climate change impacts and enhancing resilience. Discussion focused on the role each stakeholder group can play in planning for resilience. This paper summarizes the key insights of the meeting and areas of focus moving forward.
Collaboration for Climate Resilience
in Stamford, Connecticut
The city of Stamford, Connecticut, is a corporate hub with more than 125,000 residents, the third largest city in the state. As a coastal city, Stamford is vulnerable to threats of climate change, extreme weather, and natural disasters, making it imperative for the city’s leadership to plan for resilience.
Pacific Gas and Electric Company’s
Based in San Francisco, Pacific Gas and Electric Company (PG&E) provides natural gas and electric service to nearly 16 million people throughout Northern and Central California. PG&E’s service area includes diverse communities from the coast to oil-producing regions around Bakersfield and rural agricultural communities across the Central Valley. As part of its broader climate change commitment, the company is working in a variety of ways to address the need to adapt to changing climate conditions.
Climate Change Impacts in Anchorage
Climate changes will impact the entire Anchorage community. Businesses of all sizes are an important part of the community, and will experience many different risks, such as disruptions to their supply chain, financial losses from extreme events, and threats to the health and safety of their employees. The business community in Anchorage can work together with city and state agencies, along with other stakeholders to evaluate potential risks and take steps toward enhancing the community’s resilience.
|Josh Wiener of MetLife, Kevin Rabinovich of Mars Inc., Rusty Hodapp of Dallas-Fort-Worth International Airport and Rob Bernard of Microsoft share the strategies that helped them win Climate Leadership Awards with David Rosenheim of The Climate Registry at the fifth annual Climate Laedership Conference, March 10 in Seattle.|
Climate action can start with an idea, but it takes a goal and a plan to get there to make that idea a reality.
When the folks at Microsoft began their current sustainability journey in 2007, “There was well-intentioned chaos,” according to Rob Bernard, the company’s chief environmental strategist. When the Clinton Foundation asked the software maker for a tool to monitor carbon in cities, “That made us think that, internally, we needed to have a strategy on sustainability,” Bernard said in his remarks at the fifth annual Climate Leadership Conference (CLC) in Seattle earlier this month.
That strategy led Microsoft to set and achieve its first public greenhouse gas goal, a 30 percent reduction within five years. Once that was met, the company then set -- and met -- an even more ambitious goal: carbon neutrality.
Microsoft was one of 13 organizations, three partnerships, and one individual honored with 2016 Climate Leadership Awards for accomplishments in reducing greenhouse gas emissions and driving climate action. The were given by the U.S. Environmental Protection Agency’s (EPA), in collaboration with C2ES and The Climate Registry.