Yale carbon charge aims to ‘tilt people’s behavior to low-carbon activities,’ says Nordhaus

The benefit of a carbon charge at Yale is that it would be an incentive for everyone to work to reduce greenhouse gas emissions on campus, according to Professor William Nordhaus, who chaired a task force on the issue.
On Earth Day, April 22, 2015, Yale's Presidential Carbon Charge Task Force hosted a special town hall discussion with the university community to discuss the details of a report recommending that Yale adopt a carbon charge as part of its campus sustainability efforts.

The benefit of a carbon charge at Yale is that it would be an incentive for everyone to work to reduce greenhouse gas emissions on campus, according to Professor William Nordhaus, who chaired a task force on the issue.

“Pricing is something that affects everybody,” Nordhaus said recently at a community forum in which he outlined the recommendations of the Yale Carbon Charge Task Force appointed by President Peter Salovey in August 2014.  The task force recommended that the university introduce a comprehensive program for a carbon charge on carbon dioxide emissions from Yale-operated facilities and operations.

Under the program, units of the university would receive a charge if they exceeded a base level of emissions, or a rebate if their emissions were below their base level. Each unit’s base level of emissions would be some portion of the university’s current overall emissions as a result of energy use.

“The sum of the base is the sum of the emissions,” Nordhaus explained, noting that the expectation was that a carbon charge program would be revenue neutral or close to that — total charges and rebates around the university would likely cancel either out.

“This is not something to raise revenue,” Nordhaus said. “This is not a tax.”

Because of the complexity of implementing a carbon charge program, the task force recommended that it be phased in over three years.

In sharing the task force’s recommendations in an email to the Yale community, Salovey and Provost Ben Polak stated: “We look forward to piloting this concept in select units in the future, and to continued careful research and study as we consider potential wider implementation. We believe that this proposal can serve as a model for other institutions, expanding Yale’s role as a pioneer in researching, teaching, and designing innovative solutions to climate change.”

“I know there’s a lot of support and desire among students to really make sure this charge was impactful and broad-reaching,” said task force member Jennifer Milikowsky, a student at the School of Management who spoke at the forum. “I think that we really did a good job of balancing that with practical aspects of this charge.”

Task force member Edward Wittenstein, director of Yale’s Johnson Center for the Study of American Diplomacy, said the consideration of a carbon charge showed how Yale’s “academic research and teaching can inform a University policy.”

The task force recommended that the carbon charge be set at the social cost of emissions, currently estimated by the federal government to be $40 per ton of carbon dioxide. School of Management professor Sharon Oster, a task force member, said that, with a carbon charge in place, decisionmakers at Yale would include “the cost of the social damage they are doing to the environment and to society” when considering the price of projects and operations.

One participant at the forum asked about the role that sources of renewable energy played in Yale’s effort to reduce greenhouse gas emissions. Nordhaus said the task force’s focus was on the consumption of energy by Yale, not how it was produced, but noted Yale’s overall sustainability efforts were “way ahead” of many universities. (A large solar array at West Campus is scheduled to begin providing renewable energy for Yale in June 2015.)

Another attendee at the forum said he doubted the efficacy of a carbon charge program because he had no control over emissions generated by his work environment.

“A lot of people just don’t pay attention to this,” Nordhaus said of emissions, but a carbon charge can “tilt people’s behavior to low-carbon activities” and make them aware of the energy usage required, for example, by the lighting in their campus building or the equipment they use at Yale. He said a carbon charge program also provides institutions with a benchmark for decisions.

At the forum, Polak said the task force was a “model example of how you can get students and faculty and staff working together on serious university problems.” He concluded that exploring the concept of a carbon charge was “an incredibly important educational thing to do,” whatever the experiment brought.

“I think it’s the right idea,” he said, but noted, “It’s the beginning of the journey, not the end of the journey.”

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