Higher Education Leadership on Carbon Pricing

Higher Education Leadership on Carbon Pricing

Putting a price on pollutants curbed acid rain and protected the ozone layer.  Most economists say pricing carbon is vital to arrest climate change.  Until recently, pollution pricing was primarily the province of governments.  This time, governments are not alone.  We know of nearly 1,400 companies using or planning to use internal prices on carbon emissions to safeguard investments and reduce emissions.   

Earlier this month, a new kind of player emerged on carbon pricing: colleges and universities.  They are not only implementing carbon prices; they are researching and sharing their work.

At the Global Climate Action Summit, schools pricing carbon launched the Internal Carbon Pricing in Higher Education Toolkit to help others explore how to put a price on CO2 emissions on campus.  With support from Second Nature and the Carbon Pricing Leadership Coalition, Yale, Swarthmore, Smith, ASU, University of British Columbia, and University College London built this suite of resources to answer questions like:

·      Why price carbon?

·      What are the options?

·      How do we build support? And,

·      How do we set a price?

The toolkit includes case studies, decision tools, and calculation aids.

 Former Secretary of State John Kerry at Higher Education Leadership on Carbon Pricing.  Photo by Kaia Rose.

Former Secretary of State John Kerry at Higher Education Leadership on Carbon Pricing.

Photo by Kaia Rose.

Former Secretary of State John Kerry kicked off the launch event on September 13th. He called for action on carbon pricing: “Go back to your colleges and say, “We’ve got to price it…We’ve got to show the world the way forward so we have a chance of winning this battle.”

Following his remarks, leaders on four campuses explained how they are pricing carbon:

Arizona State University now charges $8 per round trip flight purchased, which funds a portfolio of carbon offsets.   

Smith College uses a proxy price of $70 per metric ton of CO2 equivalent (MTCO2e) to ensure large capital decisions account for the costs of carbon.

Swarthmore College’s carbon pricing work takes three forms:

1.     An internal fee of $23/MTCO2e and a request for additional voluntary contributions to support emissions reduction;

2.     A proxy price of $100/MTCO2e applied to major capital decisions;

3.     Public education on carbon pricing, including Swarthmore President Valerie Smith’s public endorsement of carbon pricing.

Yale University uses a revenue-neutral fee of $40/MTCO2e, in which administrative units whose buildings underperform the Yale average change in emissions contribute funds and those that outperform the average receive funds. 

In addition to these schools, several others are exploring internal carbon pricing, and some have already implemented prices.  Princeton has long used a proxy price, now $45/MTCO2e on certain capital decisions.  University College London is piloting a £30/tonne price on building energy consumption.  Whitman College’s Student Senate is adding a carbon fee on student travel fund requests ranging from $5 for a short train/bus trip to $40 for long airplane trips.  As Smith College’s Alex Barron said, “This is the world students are coming into…if we are addressing the climate problem, there is going to be carbon pricing all over the place.” 

During the event’s second panel, Ann Carlson, Professor of Environmental Law at UCLA, reported that carbon pricing “is part of a series of recommendations our task force [The University of California President’s Global Climate Leadership Council] made for campuses to consider.”  In response, UCLA implemented a carbon fee on airline travel that charges $9/domestic flight and $25/international flight, which funds carbon mitigation projects.

UC Berkeley Professor of Energy Dan Kammen contrasts carbon pricing communication in the corporate and higher education worlds: “Many corporations, some of which you wouldn’t expect, have an internal carbon price, which they utilize but do everything they can not to publicize.  Universities… [are] making this a bottom line item and highlighting the benefits and costs.”

Michael Howard, Executive Vice President of Finance and Administration for Smith College, finds internal carbon pricing incents choices that reduce utility costs.  And it supports the kind of thinking core to his position.  “We only have so many resources and it is important that we are always aiming those resources where they can do the most long-term good.”

Tim Pavlis, Yale’s Associate VP for Strategy and Analysis, sees carbon pricing as a valuable tool to improve university decision making: The carbon price “comes up when we’re making high-stakes decisions.  We just expanded our undergraduate population by 15%.  We…undoubtedly increased our carbon footprint to do that.  [It’s] a good thing for us to have done as an institution, but we ought to take into consideration the emissions that are going to result…This gives us a way to do that that doesn’t require a different train of thought than we’re otherwise engaged in.”

The authors are continuing to develop the toolkit.  We welcome suggestions.  If you are exploring internal carbon pricing on your campus, please let us know at the bottom of the toolkit’s “About us” page.  As Tim Pavlis said at the end of the toolkit launch event, “Honesty is something higher ed can bring to this discussion.  We don’t know what’s going to work.  We have to be trying things and we have to be learning from each other, and universities are well-placed to do that.”

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About the Author

Casey leads Yale’s internal carbon price. He recently served as Director of Innovation for Connecticut’s Economic Development department, investing in startups and developing policy to attract talent to Connecticut cities. Casey holds an MBA and a Master’s of Environmental Management. Prior to Yale, he was Sustainability Engineer for Turner Construction Company, an organizer for Dean for America, and co-founder of a sustainability service learning organization in Oberlin, OH.