Carbondale proposes to levy tax on carbon in electric, heat bills
by Allen Best
CARBONDALE, Colo. – Although one resident has called it ridiculous, residents in Carbondale in April will decide whether to adopt a carbon tax. If approved by voters in the town of 6,500 people, it would be among just a handful of municipal carbon taxes in the United States.
Proponents estimate that the tax would add an estimated $5 to $7 per month to the utility bill of an average home and $20 to $40 for an average business. It would not apply to sale of gasoline.
Under the plan approved by town trustees on Wednesday, revenue would be used to continue and expand programs to improve energy efficiency in homes and businesses and incentivize renewable energy. Funding has ranged from $65,000 to $100,000 for such programs, but the source of that funding—the town’s share of proceeds from natural gas and oil extraction in Garfield County—is expected to diminish in future years.
“It actually started with the trustees,” says Erica Sparhawk, of the non-profit advocacy group Clean Energy Economy for the Region, or CLEER. “This is a very educated group of trustees, dedicated to sustainability, and they take their clean energy goals seriously. So they asked us to help them research and analyze different potential funding sources, so that these kinds of programs without the town having to tap their general funds.”
With just a modest business and industrial sector, 60 percent of Carbondale’s greenhouse gases come from the town’s 2,400 homes. The town’s climate action plan envisions upgrades to those homes so that they use less energy and, coincidentally, are more comfortable to live in. The program being envisioned would address 1,000 homes in the next five years.
Trustees, as the elected members of the town board are called, believe it’s important to create n income-qualifying program, so that lower-incomer residents can benefit from the carbon tax.
Other potential use of revenues could include a large solar farm and a local micro-grid with battery storage.
Once a coal-mining town
The irony of Carbondale adopting a carbon tax is obvious. Mid-Continent Resource’s coal mine was a major payroll in the town for decades. The mine closed in 1991.
“What better place than a town called Carbondale to implement a local carbon fee and put talk into action?” asks Mayor Stacey Bernot, a native, who grew up in Carbondale when it was still a mining town.
But the demographics of the town have changed dramatically in the last 25 years, and Carbondale is now home to wide variety of innovators, creators and activists but also to a large population of immigrants who work in the construction and service sector of the Aspen-area economy. Latinos, mostly immigrants, compose 30 to 40 percent of the town’s population, and they tend to live in trailers and other lower-end housing.
Lately, carbon of another sort has concerned town residents, because of the potential for drilling for natural gas in nearby Thompson Creek Valley. It’s part of the broad swathe of the mineral-rich Piceance Basin that arcs across west-central Colorado.
Town residents have loudly opposed drilling, as they generally see drilling incompatible with the hunting and recreational uses of the valley. by one study, the Thompson Divide provides 300 jobs in the Carbondale-area economy.
Sparhawk says trustees recognize what some—including this writer—called out as an inconsistency: How can you oppose drilling in your backyard while using natural gas to heat your homes and, increasingly, to produce your electricity?
Trustees recognize the need to walk their talk, says Sparhawk. “If we are going to oppose drilling in the Thompson Divide, then we in the community need to lessen our demand for natural gas.”
Six funding mechanisms were evaluated as dedicated revenue sources for energy efficiency and renewable energy improvements in Carbondale, but after a series of work sessions with town trustees, efforts narrowed to the tax on carbon used for home heating and that proportionate of the electricity that comes from carbon sources.
Trustees are scheduled to finalize the ballot proposal at their Jan. 13 meeting.
Modeled on Boulder
Carbondale’s plan is modeled on the tax adopted in 2007 by the municipality of Boulder, Colo.. It is described on the Boulder’s website as the “nation’s first voter-approved tax dedicated to addressing climate change.”
The tax costs the average household about $1.33 a month and now generates $1.8 million a year. The tax is administered through Xcel Energy, which also provides electricity to Carbondale.
Boulder sustainability officials claim to that use of the tax money has been used to stop the growth of greenhouse gas emissions.
“What’s really interesting about Boulder’s carbon tax,” says Will Toor, a former mayor, “is just how popular it has been.” Boulder is deeply divided about whether to get a divorce from electrical provider Xcel Energy, but the 77 percent of voters last November decided to extend the tax through March 2023.
The tax applies only to electricity, and it exempts any energy produced without burning fossil fuels.
Other jurisdictions also have carbon taxes. In Arcata, Calif., a college town two hours north of San Francisco, voters in 2012 passed, by a margin of 68 percent to 32 percent, what they call an excessive electricity use tax. According to the city’s website, the 45 percent tax is assessed on residential household meters that use more than 600 percent of baseline electricity or more than an average of three residential households from one meter.
Washington D.C. also has a carbon tax levied on natural gas and electric bills. The tax in 2014 delivered $20 million to the Sustainable Energy Trust Fund, which is used to improve energy efficiency and expand renewable energy.
Just one mountain town in Colorado has flirted with a carbon tax. Joan May, an elected commissioner in San Miguel County, proposed a carbon tax on electricity and natural gas that would have generated $100,000 a year. Few towns are as liberal as Telluride, but the tax lost badly at the polls.
May says she failed to do her work in advance, leaving voters confused about the administration and use of the money. “I would solicit more support before we put it on the ballot,” she says. “It was basically ready, fire, aim.”
She says she wouldn’t change the proposal itself, though. Similar to Boulder and other programs, the money would have gone into a fund that could be tapped for energy efficiency improvements.
In Carbondale, CLEER avoided May’s mistake in Telluride by holding community meetings. Still, there’s a bit of pushback. In a letter published in the Sopris Sun, Carl Ted Stude, a retired environmental engineer and a 10-year resident of the town, dismissed the idea as impractical.
It’s not the idea of a carbon tax that dismays him. He supports phasing in of a carbon tax at the national level. “I believe the preponderance of scientific evidence that emissions of carbon dioxide are contributing to global warming that will have long-term consequences that are more catastrophic than, say, a reduced ski season at Aspen.”
Stude sees a national tax being phased in
while subsidies and mandates for ethanol, wind turbines and cultured algae are phased out. But a municipal carbon tax in a small town like Carbondale makes no sense, he argues.
“A carbon tax at the local level would involve substantial administrative effort (read ‘economic waste’) in calculating and assessing the tax.”
Allyn Harvey, a trustee in Carbondale, doesn’t think administration will be inefficient. CLER has met with Xcel Energy, Holy Cross Electric and Source Gas, the three energy utilities, and it’s not a difficult process. A greater concern, he says, is the impact on Latino and other poor families, especially if nobody speaks English. “They may be leery of people knocking on their odors to talk about energy,” he says,.
But Harvey sees this as a major opportunities, not just for poor people to ultimately benefit from more comfortable, energy efficient homes, but for Carbondale to take control of its own destiny.
“If we wait for the federal government to take action and for partisanship to end so that we can enact a carbon tax nationwide, ti will be generations form now,” he sways. “I think there’s an opportunity for the local community tot take actions and do something about a problem that we all recognize.”