Councilmember Cheh has proposed a carbon price — here’s what you need to know

Councilmember Cheh has proposed a carbon price — here’s what you need to know

By Courtney Dyson

We just achieved a key milestone in the carbon price campaign. On May 18th Councilmember Mary Cheh finally presented a draft proposal for a carbon price in DC!

The proposal comes on the heels of the DC Council introducing a bill requiring 100% of the District’s electricity to come from renewable sources by 2050. Councilmember Cheh’s proposal brings us one step closer to enacting a strong and fair carbon fee-and-rebate policy, and we are grateful for her leadership.

However, it must be strengthened before being introduced and passed into law.

The proposal is still in draft form, so specific allocations of the revenue raised in this proposal will undoubtedly change. At this time, we are focusing on the effectiveness of the proposal in terms of reducing fossil fuel emissions. The Councilmember’s current draft cuts in half the most important numbers: the level of the carbon price itself, the economy-wide coverage, and the emission reductions that follow.

The Carbon Price

With a fee starting at only $10 per ton of carbon dioxide, Councilmember Cheh’s proposal falls along the lines of many others being implemented around the globe. And akin to those, it is not enough.

The recommended carbon price to meet the high end of the Paris Agreement (2.5 degree Celsius warming) is $230 per ton of CO2 in 2020. A higher carbon price is cited as being needed to hasten the transition to clean renewable energy sources and to improve energy efficiency. Our proposal calls for a fee that begins at $20 per ton and increases $10 per year, to eventually reach $150 per ton by 2032.

Economy-wide Coverage

One of the leading differences between the two proposals is that Councilmember Cheh’s would only place a carbon fee on oil and gas combustion. It completely omits the electricity sector from paying a fee.

Fossil fuels are a main source of energy for electricity generation in the district. In order to ensure a swift transition to clean energy across the economy, it would be more effective to apply a carbon price across all sectors, rather than segmenting them with different policies like an RPS. Under the coalition proposal, the electricity sector would decarbonize decades faster than under Councilmember Cheh’s.

Emission Reductions

DC has the goal to reduce greenhouse gas emissions by 50 percent by 2032, and the coalition proposal would put us on track to achieve those goals.

However, Councilmember Cheh’s proposal cuts the carbon price in half and lessens its scope, inevitably diminishing emission reductions.

The Put A Price On It DC proposal reduces CO2 emissions from natural gas and oil by 5.75 million tons by 2032 (not including the emissions reductions from electricity), whereas Councilmember Cheh’s proposal only reduces it by 2.65 million tons by 2038.

We cannot afford to let that mass of greenhouse gas emissions escape into our atmosphere. We are on the brink and every ton of CO2 emitted into our atmosphere counts.

*Emission reductions from heating fuels only

What does this mean for our campaign

We’re going to work closely with Councilmember Cheh to mold this proposal into an equitable carbon pricing policy that catalyzes reductions in greenhouse gas emissions, encourages innovation and clean renewable energy, and is fair to all DC residents.

There are still many factors of this proposal to be determined and we must keep up the pressure to ensure a rebate to ratepayers, the details of which are still to be determined by a commission.

On June 5th we will be having a press conference to urge our councilmembers to continue making progress on a fair and equitable carbon price and to push for the bill to be introduced.

In the meantime, you can send a message to Council Chairman Phil Mendelson expressing your support for a strong and fair carbon price today.

Read on for more details comparing our proposal with Councilmember Cheh’s proposal.


AT A GLANCE: COMPARISON OF PROPOSALS

Feature Councilmember Cheh’s Proposal Coalition Proposal
Fee Rate Taxes carbon at a rate of $10 per ton starting in FY2020

Price of carbon increases $5 per year per ton of CO2

Price of carbon capped at $100 per ton in 2038

Taxes carbon at a rate of $20 per ton starting in FY2019

Price of carbon increases $10 per year per ton of CO2

Price of carbon capped at $150 per ton in 2032

Electricity Sector 100% RPS by 2050, plus long-term Renewable Power Purchase Agreement (PPA) for Standard Offer Service

  • Per the Clean Energy DC plan, this would require the electric utility to procure 70% of the Standard Offer Service via long-term renewable PPAs, phased in over three years based on the percentage of supply contracts that are up each year. The RECs accompanying the renewable energy would also be purchased and used for compliance with the RPS.

Per the CleanEnergy DC plan, limit the area from which RECs may be purchased for compliance with the RPS to the PJM

Fee applies to electricity at same rate as other sectors, which increases efficiencies.

See analysis below on necessary amendments to any proposed 100% RPS.

Gasoline & Diesel Carbon fee would be implemented when one adjacent state adopted a similar fee Same
Transportation -Vehicle excise tax tied to emissions standards, exemption for used cars 7 or more years old

-Additional fee on parking

Same
Green Finance Fund The first $30 million raised would go to the Green Finance Authority, after that the Green Bank would receive $10 million per year for 4 years 20% of the revenue is directed to greenhouse gas reduction programs, with a focus on energy efficiency and supporting greener buildings, as well as the installation or retrofit of HVAC and other large building systems.
Resident Rebates $X million per year for low-to-moderate income residential carbon fee offset, the details of which would be decided by a commission appointed by the Mayor and the Council in accordance with guiding principles established by the bill, to include:

  • Holding the lowest-income residents harmless for the tax;
  • Eliminating any potential displacement effect that it could have;
  • Minimizing administrative costs of the program.
75% of revenue rebated to all residents, with an enhanced rebate for residents below 200% the federal poverty level.

See below for principles to which a commission must adhere.

We are concerned that Cheh’s currently proposed $10/ton starting price with $30M allocated for the Green Bank would leave zero revenue for any other purpose, including the rebate.

Business Rebates $X million per year to the SEU and/or Green Finance Authority for programs assisting master-metered multi-family building owners with energy efficiency retrofits

$X million per year for a tax deduction for energy efficiency retrofits in commercial buildings

Under the Coalition proposal, 5% of the revenue is directed toward operating-cost relief for small businesses.

The Coalition asks that CM Cheh’s proposal specify that funds appropriated to the Green Finance Authority and/or SEU, master-metered units, and commercial tax credits can be used for both energy efficiency AND for investments in building electrification (switching from gas/oil to electric space/water heating and cooking).

The proposal should also specify where money goes from either parking fees or a fee on motor fuels if a neighboring jurisdiction acts.

Further analysis from the coalition:

On Necessary Amendments to the RPS 

We applaud Councilmember Cheh’s proposal to restrict the catchment area for qualifying RECs under the RPS to the PJM alone, as well as her proposal to require 70% of the SOS be procured by long-term renewable PPAs. However, the Coalition proposal seeks far larger reductions from a comprehensive carbon price on electricity.

In short, a 100% by 2050 RPS policy will not help the District achieve its 2032 climate and energy goals. This approach leaves 80% of electricity unaffected now, and does not strengthen our existing efforts to decarbonize as mandated by the 50% by 2032 RPS. If the Council is intent on reducing electricity emissions via a new RPS, the target date must be significantly sooner.

The design of the current 50% by 2032 RPS presents another opportunity for increased emission reductions. There need be no three-year pause beginning in 2020, when clean energy will comprise 20% of the electricity mix. Instead, the RPS could reach 30% by 2023 and exceed 50% by 2032.

Proposed Rebate Commission Must Adhere to Specific Principles

In order to better detail the specifics of residential energy use compensation, the Coalition is supportive of a bill that would allocate 75% of revenue to residential rebates, and appoint a commission specifically to determine the technical aspects of its distribution. (The current revenue allocation to the Green Bank in initial years is out of proportion and should be adjusted).

The commission should include members representing environmental and environmental justice organizations; low-income advocacy organizations; unions; the Office of the People’s Counsel; applicable agencies; and other members with relevant expertise. The commission should report back to the Council within six months of beginning work, but at the very latest no longer than twelve months after beginning work.

The bill language must require the commission to adhere to the following principles:

  1. The economic outcome must be progressive for the majority of DC households. Households who contribute least to the climate crisis — specifically low-and middle-income households — should not pay more in a carbon fee than they receive in compensation.
  2. The price signal and the revenue must be decoupled. In other words, no one should receive revenue back at the same time that they pay the carbon fee (e.g. on-bill).
  3. The price path should be unchanged from our original proposal of $20/ton in year one, increasing $10 every year to a cap of $150/ton.

The Coalition continues to believe that rebating 75% of the money to District residents in the form of monthly checks or deposits is the best use of the funds. If needed, however, we are open to a diverse commission of experts determining the specific allocation of these funds, as long as the solution is timely and adheres to the principles described above.

Faces of the Campaign: Meet Michael Riley Place

Faces of the Campaign: Meet Michael Riley Place

Faces of the Campaign is an ongoing series featuring our key organizers and stakeholders involved in “Put A Price On It, D.C.” Our coalition of 70 organizations is comprised of racial justice activists, union workers, health advocates, moms, dads, kids, retirees, and business-owners alike. Michael Riley Price is a student fellow working on the campaign. Here’s his story.

What is your name and what do you do?

My name is Michael Riley Place and I am a graduating senior at St. John’s High School in DC. I am an Our Climate Fellow working on the campaign as part of the steering committee. 

What woke you up to the climate crisis?

When I was 13, my family moved to New Zealand. Although I have been passionate about the environment my entire life and had learned about climate change, the implications a changing climate has on our Earth never really struck me until I was standing in a ravine carved out by the Fox Glacier. While the glacier still exists, century old images showed it to be significantly larger, stretching through the entire ravine. I realized then, that in only one hundred years, a relative blink of an eye, human society changed the world so much.

Besides the melting of glaciers, there has been intense melting of the ice caps, bleaching of coral reefs, and desertification of rain forests, all because of climate change. The government of New Zealand has always been a leader on environmental issues, recently ratifying the Paris climate agreement and banning offshore drilling. I have come to realize that while the United States has endangered ecosystems just like New Zealand, it has not taken the same action to ensure these places are preserved.

Why does the campaign to put a price on carbon in DC and rebate the revenue matter to you?

The tricky thing about climate change is that no matter where someone lives, their carbon footprint affects the entire world community. As climate change is the product of billions of people emitting carbon in their daily lives, a few individual decisions to bike to work or switch light bulbs is not going to make a significant difference. Entire communities must come together to move towards sustainability, by ensuring that people pay for their pollution. I believe that putting a price on carbon would not only discourage carbon pollution in the district and allow Washingtonians to reduce climate change as a united community, but by being passed in the nation’s capital it would set a national precedent for more cities to follow. Also, the rebate would ensure that communities unable to pay for the increased heating and transportation costs are not stifled by them financially.

How is this campaign different from other environmental campaigns you’ve experienced in the past?

This is the first campaign, environmental or otherwise, that I have played a role in. I love the positive energy of the people involved with the campaign. Although everyone has been working for a long time to ensure that climate change is addressed, and lately it seems our government is taking a step back in environmental progress, everyone still has hope. Hope that if we keep working towards a sustainable future, we will get there.

The steering committee is also made up of a very diverse group, with members hailing from government, businesses, faith-organizations, nonprofits, or grassroots backgrounds. I have learned a lot about the different perspectives that go into forming a successful campaign.

How has climate change impacted your own community?

The effects of climate change are so numerous and far-reaching that it plagues various communities differently. The United States has been experiencing increasingly hotter temperatures and irregular weather patterns. While many of us have the power to manipulate temperatures using air conditioning, there are many Americans who cannot afford this luxury, and billions around the globe who do not have access to it, these people are forced to deal with these rising temperatures. Irregular weather patterns are not only an inconvenience, those who lie in the path of storms face complete devastation. Additionally, many species are adapted to certain climate patterns, causing them to experience the changes intensely.

What was your favorite moment in this campaign?

My favorite moment was participating in the lobby day in March. This was my first experience lobbying and I found it extraordinary to see elected officials speak directly with their constituents about the changes they want to see in their community. Council members Robert White and Stephen Grosso showed their support for the policy and this was really cool.

Tell me about a time you’ve witnessed community power.

I witness community power every meeting of the steering community. The diversity of groups represented in the committee is amazing. Student groups, clean power businesses, environmental networking groups, a youth run political action committee, faith organizations, grassroots community groups, and even the Citizens Climate Lobby come together to plan the next steps. This ensures the policy is addressed from all angles. Furthermore, volunteers from the campaign have promoted the policy everywhere from ANC meetings to church events, bringing news of the policy directly to the community. This collaboration was apparent during the youth lobby day, where many people turned out for meetings with representatives and a rally in front of the Wilson Building. It was extraordinary to see so many different people united around one vision.

What was your biggest accomplishment on this campaign?

There have been so many great moments of this campaign, and with the introduction of the bill just around the corner, I know the best moments are yet to come. One of my biggest personal accomplishments of the campaign was writing a speech about why “the bill is late” and delivering the speech at the rally preceding the youth lobby day. As a high school student, it is my generation that will witness the worst parts of climate change, yet we lack the vote and attention of policy makers, I feel as if this is lost on our government. It was extraordinary to give my perspective and then meet with the policy makers directly, giving me hope that in time our leaders will come to realize the importance of protecting the environment for the sake of future generations.

One word summing up your experience with this campaign:

Optimistic

If you could tame a wild animal to do your bidding, what would it be?

A Parrot. This parrot would be fluent in several languages and help me to translate, it would spy on people, deliver food to my house, and be able to have deep and philosophical conversations.

Our greatest tool: Why we need a carbon price to meet the Paris Agreement

Our greatest tool: Why we need a carbon price to meet the Paris Agreement

By Courtney Dyson

In economist’s James K. Boyce’s mind, we are currently facing a tragedy of the commons on the global scale. We have reaped the benefits of fossil fuels over the past centuries without paying for the consequences. The greatest being global warming.

What is Boyce’s solution to this dilemma?

A carbon price. In a recent study called Carbon Pricing: Effectiveness and Equity, Boyce makes the case for a carbon cap-and-dividend. A system which would assign property rights to the “limited capacity of the atmosphere to absorb CO2” and develop a sense of “co-ownership of the gifts of nature”.

The study, published in April by the Political Economy Research Institute at University of Massachusetts Amherst, states numerous times that any carbon pricing mechanisms must be driven by emission targets, the capping of emissions, in order to drive them down, and for any prospect of meeting the goal of the Paris Agreement – keeping global warming below 1.5 – 2 ℃.

However, there are several things to keep in mind in order to ensure that such a policy is both effective and fair.

What should the price be?

Global carbon pricing mechanisms today cover about 20% of fossil fuel emissions. However, they were found to be falling short of their goals due to the prices being too low. Incredibly, after taking into consideration the subsidizing of fossil fuels, the average net carbon price in the world today is minus $8.

This is partly due to that three-fourths of global carbon prices are set below $10 per metric ton of CO2. These prices are well below the recommended level. According to a study (Nordhaus), cited by Boyce, the price required to stay below 2.5 °C warming starts at roughly $230 per metric ton of CO2 in 2020, increasing over time.

This makes the DC price of $20 per metric ton with increases of $10 per ton every year with a cap at $150 in 2032 seem modest. However, our carbon price will be occurring in conjunction with improvements in energy efficiency and an increased renewable energy portfolio. These simultaneous actions assist in bringing down the necessary carbon price.

How do you ensure it is fair?

One concern of increasing pricing to the necessary level to invoke timely change is the impact that will trickle down to ratepayers. This effect was referred to in the study as the “cost pass-through”. Boyce states that this pass-through is “a predictable and desirable feature of carbon pricing” because it signals users to reduce their carbon footprints. The lower your footprint, the less you pay.

Yet, it is important to have complementary mechanisms in place to ensure that ratepayers are not stuck footing the bulk of the bill, instead leaving it to fossil fuel companies – the polluters. Boyce states that this can be achieved by:

substantial share of the carbon rent is rebated to the public as equal per-person dividends, the net impact of the carbon pricing policy turns progressive.

This method and theory will, hopefully soon be put into practice through the Climate and Community Reinvestment Act of D.C. The proposed policy would reinvest a large portion of the revenue raised back to D.C. residents, with portions also allocated into energy efficiency and renewable energy programs and tax cuts for small businesses.

What makes the rebate fair?

It is important that a carbon fee-and-rebate takes into account that every household does not have the same carbon footprint. This is a factor which must be adjusted for when establishing the rebate mechanism. Simply put – those who consume more pay more, and those who consume less pay less. Sound familiar?

One of the best mechanisms we have to meet the goals of the Paris Agreement is carbon pricing. Methods like those studied by Boyce and put into practice by legislation such as the Climate and Community Reinvestment Act of D.C. are tools which are effective in reducing carbon emissions quickly, encouraging innovation and new technologies, and most importantly, done in a manner that is just.

Read the full study below:

Boyce-Ecol-Econ-2018

 

Courtney Dyson is a Communications Fellow at Chesapeake Climate Action Network

Image at top by Flickr user Hsing Wei, Crowded, 2009.

Speak up for #PriceItDC at the D.C. Candidate Forums

Speak up for #PriceItDC at the D.C. Candidate Forums

Election season is underway for the D.C. city council. Join us during the month of May at candidate forums to show your support for #PriceItDC and climate action.

We need YOU to make sure that everyone running for office this year knows: D.C. residents want leaders who will act on climate, protect our communities, and pass a carbon rebate NOW.

Thursday, May 3: Hear the Candidates!
Where: Westminster Presbyterian Church (400 Eye Street SW)
When: Thursday, May 3, 7:00pm – 9:00pm

Saturday, May 12: 2018 “I Rent, I Vote”: Tenant Town Hall and Candidate Forum
Where: All Souls Unitarian Church (1500 Harvard St NW)
When: Saturday, May 12, 11:00am – 3:00pm

Thursday, May 31: The “Year of the Anacostia” Candidates Forum
Where: Anacostia High School (1601 16th street, SE)
When: Thursday, May 31, 6:00 – 9:00pm

RSVP Here!

Where’s the Bill? Day of Climate Action

Where’s the Bill? Day of Climate Action

April 13th 12:30-3:00 pm

We’re bringing EVERYONE together to descend on the D.C. Council Building to urge our Councilmembers to support and pass a carbon fee-and-rebate policy.

On April 13, we’ll kick off an action-packed day with a rally at 12:30pm outside the Wilson Building led by students and professors from across D.C. Then at 1:30pm we’ll head inside to meet our legislators face to face.

The day’s events will focus on students and D.C. youth because their immediate futures are at risk. However, everyone who cares about the future of the city is invited to join and support the students as we work together to pass a carbon fee-and-rebate this year!

Here are the details:

What: Where’s the Bill? Day of Climate Action
When: April 13th 12:30-3:00 pm
Where: John A. Wilson Building 1350 Pennsylvania Ave. NW, Suite 506 Washington, DC 20004
(2 blocks south of Metro Center)
Details: Wear yellow! We’ll have some yellow campaign shirts to loan, but please wear yellow if you can.
Why: It’s time to pass a carbon fee and rebate in D.C!

 

RSVP now!

Building our Movement at Capital Pride

Building our Movement at Capital Pride

Each year Dupont City hosts the Capital Pride Parade to commemorate the 1969 Stonewall riots, which paved the way for decades LGBT rights activism. As a coalition working to create a greener and more equitable city, Put A Price On It D.C. is committed to working across all progressive movements.

That’s why last weekend we headed to the 2017 Capital Pride Parade to get the word out and speak with city Councilmembers.

Our committed campaign leader, Howard Crystal, recapped his valuable experience bird-dogging at the parade!

I’ve never been in the Pride Parade or witnessed the behind-the-scenes set-up process. This past weekend however, I not only got to be behind the scenes–I had the chance to join a terrific team bird-dogging councilmembers for the Put A Price On It Campaign!

The team started the day with an orientation from Climate Justice Organizer, Jeremiah Lowery. After the orientation, we searched the parade crowds for any councilmembers lined up to march.

We spotted Councilwoman Mary Cheh, a continued champion of sustainability politics, first and I volunteered to give her our pitch.  After speaking with the councilwoman, we spoke to her supporters as well as other councilmembers.

In the end, I got the chance to talk to four Councilmembers and several of their supporters in the midst of the exciting parade. Everyone we spoke with was supportive. One councilmember even assured us he is on board with the campaign!

I hope you have the chance to get out there and speak with councilmembers about this important campaign. They need to hear from all of us!