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Social cost of carbon: the most important number you’ve never heard of

May 26, 2021

This article is from the May 26, 2021, issue of Flip the Script, a weekly newsletter moving you from climate stress to clean energy action. Sign up here to get it in your inbox (and share the link with a friend).

We talk a lot about the energy transition and the need to get to a future that doesn’t depend on fossil fuels. It’s an exciting prospect, and there are lots of steps we can take as individuals and as a society to get us closer to that goal—from switching to electric vehicles to putting solar panels on our roofs. But it’s also important to get clearer on what happens if we don’t take action, especially as the impacts of climate change become more immediate and more obvious. It turns out there’s a (not so) hidden cost to doing nothing—and fortunately, as a society, we’re getting a whole lot better at trying to measure it.

The costs of climate inaction

When we buy gas for our cars or heating oil for our homes, we’re used to just paying the price that’s been determined by the market, which shows up in the tally at the pump or on our monthly utility bills. But the wider costs of using those fossil fuels—to our climate, health, and society—aren’t factored into that price. Each year, the U.S. and other countries spend billions of dollars addressing (and trying to minimize) the damages from deadly wildfires, heatwaves, hurricanes, floods, and other climate-related disasters. The National Oceanic and Atmospheric Administration estimates that in 2020 alone, the U.S. experienced 22 separate billion-dollar weather and climate disasters, well above the previous record of 16 annual events.

The wider costs of using those fossil fuels—to our climate, health, and society—aren’t factored into that price.

The health costs of climate inaction are equally mind-blowing. A group of doctors recently estimated the annual health impacts of climate change in the U.S. to be at least $820 billion, covering everything from treating asthma to fighting Lyme disease. But the actual price tag is likely far higher, given that we don’t even know all the impacts yet, much less how to calculate them. And the health consequences of climate change are expected to only worsen. According to one study, ongoing warming could raise the average mortality rate in Los Angeles by roughly 20 percent by the end of the century.

Baking climate costs into policy

Fortunately, we’re now seeing more aggressive action to tackle these hidden costs, especially at the federal level where it can make a huge difference. In February, the Biden administration agreed on a tentative new number for the “social cost of carbon”—essentially, putting a dollar amount on the impact every ton of carbon dioxide has on society and the environment. The new (tentative) figure is $51 per ton. This means that every time the government considers a project or purchase, this carbon cost now needs to be added to the calculus, potentially changing it dramatically. (The administration also estimated costs for two other greenhouse gases: methane and nitrous oxide.)

The logic behind the approach is simple: if policymakers have a better understanding of the actual societal costs associated with decisions that involve burning fossil fuels (like supporting a new coal power plant), then they might think differently about whether or not to pursue it (opting instead for a cheaper, cleaner choice like investing in solar or wind power). According to analysts, this type of carbon valuation could reshape some pretty significant decisions at the federal level, ranging from whether to allow new coal leasing on federal land, to determining what kind of steel or glass to use in infrastructure projects, to deciding which highways or pipelines can be built.

…If policymakers have a better understanding of the actual societal costs associated with decisions that involve burning fossil fuels (like supporting a new coal power plant), then they might think differently about whether or not to pursue it…

The idea of putting a price on carbon to inform federal decision-making first emerged during the presidency of George W. Bush, when a court determined that the administration’s mileage standards were illegal because they didn’t adequately consider the wider societal costs of vehicle emissions. President Obama set a price for the social cost of carbon at $37 per ton, but this was later slashed to near-zero under the Trump administration (which essentially ignored climate accounting in its rule-making). The new Biden administration estimate of $51 per ton is temporary and could ultimately reach $125 per ton once a more thorough analysis is completed sometime next year.

States and even cities have gotten in on the action. In December, New York adopted “value of carbon” guidance to help state decision-makers determine the climate impacts of proposed policies and programs going forward. Colorado, Minnesota, and Virginia all require regulators to consider the cost of climate damages when they evaluate new applications for power generation, and Illinois and Maine also incorporate such considerations into electricity-related policies. In Minnesota, the city of Minneapolis has set a $42 per ton value for the social cost of carbon and will apply it to policymaking.

Get over it

Not everyone is happy about putting a price on carbon. Some businesses worry that it will affect their bottom lines, since factoring in the climate impact could make their activities less economically viable. In particular, representatives of traditionally high-emitting industries, like chemical, energy, and cement companies, are eager to provide input on the new federal measure. Some conservative politicians have criticized the move as being “a backdoor carbon tax,” even though carbon pricing is where many countries are headed. Even supporters admit the measure isn’t perfect, as the estimated social cost of carbon could swing wildly between different administrations and is also sensitive to inflation.

But compared to the alternative (no valuation of impacts), it’s an important step. Despite the naysayers, many business groups have supported efforts to factor in the costs of emissions in federal and state decisions. Such a move sends a clear signal to businesses (as well as everyday Americans) that everything comes at a price—even inaction—and that the choices we make today can have big consequences down the line. Ricardo Lara, insurance commissioner for the state of California, has praised the Biden administration’s accounting approach because it allows elected officials to “measure climate risk in a way that people can actually understand, and in a way that can shape policy.”

As President Biden continues to prioritize considerations of climate risk throughout the government, his administration needs the right tools to help them make the best choices moving forward. The social cost of carbon is a critically important number, and it’s not the only number that matters. Other numbers, like the unprecedented level of public support behind clean energy (80-90%) and the percentage of emissions linked to consumer choices (55%)—numbers we can influence more directly—will also help shape the scope and speed of the transition to clean energy.

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Where do I start?

May 19, 2021

This article is from the May 19, 2021, issue of Flip the Script, a weekly newsletter moving you from climate stress to clean energy action. Sign up here to get it in your inbox (and share the link with a friend).

This basic but important question deserves its own blog post. This one’s for those of you thinking, “Okay, I see you, energy transition. We’ve got mountains to climb, but I see the path forward—and I’m here for it. Sooooooooooo…what should I do exactly?”

Let’s lay out two foundational facts first:

  1. There is no shortage of quantity or variety of work to be done to tackle the climate crisis and transition to a clean energy future. We’ve got technologies to adopt, solutions to deploy (top 80 here), systems to change, hearts and minds to win, and politicians to convince. No corner of our industry, government, or economy can sit this one out.
  2. There are a lot of us. Human civilization, with its boundless energy, creativity, skills, passion, and collective resolve, is a force to be reckoned with. Oh, and we each have access to the sum of all human knowledge (updated by the second) via a machine in our pockets.

With such a variety of challenges to tackle and an equally varied set of skills and capabilities to deploy, we’d be wise to figure out a good method for assigning the right humans to the right task. 

A powerful venn diagram

Here’s a good starting point: a venn diagram from the fantastic Dr. Ayana Elizabeth Johnson. While profoundly simple, it’s one of the most effective answers we’ve seen to the common question: what should I do?

Venn diagram from Dr. Ayana Elizabeth Johnson
Dr. Ayana Elizabeth Johnson’s venn diagram

Three circles: we’ll call them the “joy” circle, “solutions” circle, and “your magic” circle for short.

The “Joy” circle

This might be the most neglected but most critical circle. You need this element to sustain action—without it you’ll burn out. “This is the work of our lifetime,” Dr. Johnson explains. We’ve got to stay in it for the long haul. Added benefit: if you’re joyful about the work, you’re far more likely to draw people in to join you. 

The “Solutions” circle

Again, there is no shortage of work that needs to be done (see above). It’s worth keeping in mind, though, that not all the work is equally impactful. Foregoing a plastic straw at McDonald’s won’t make a big dent and, frankly, the entire anti-plastic-straw movement won’t either. On the technology front, for example, we should probably prioritize tackling refrigerant management (no, not refrigerators themselves—the chemicals that make them cold) before micro wind turbines. We can’t (and shouldn’t) aim to optimize this prioritization effort with perfect, robotic precision; but we should be generally smart about it. There are some good reasons why we at Generation180 focus on activating people around solar and electric vehicle technologies, for example: they’re both high on the impact ranking list, economically viable for millions of households and businesses, ready to scale, and are good at creating ripple effects that amplify their impact.

The “Your magic” circle

This last circle doesn’t require as much explanation. Just make sure you’re considering all the various forms of value you can bring to the table, beyond the usual suspects like “I have loads of money” or “my cousin is a Tik Tok celebrity.” Think through all the things you can create, arrange, convene, give, publish, host, develop, or….cook? We need hilarious YouTubers and brilliant engineers, childrens’ book illustrators and courageous politicians. The bottom line is we need ALL the skills, resources, networks, and “magic” brought to the table. 

Putting it all together

So what’s in the middle—the intersection of the “joy,” “solutions,” and “your magic” circles—in your venn diagram? Giving talks to help spread the word about climate and clean energy? Writing poems or producing art to spur reflection? Giving community members rides in your EV? Helping get-out-the-vote campaigns to let policymakers know you care about clean energy? Getting engaged with your local city council on renewable energy issues? Here are some examples that we’ve encountered in our time working alongside all sorts of individuals:

 

The EV owner-turned-community ambassador: she loves new tech (“Joy”), is great at talking to strangers (“Magic”), and wants to help drive adoption of EVs, a critical piece of the clean energy puzzle (“Solutions”). An incredible number of EV owners level up their impact by participating in community events that help educate others about the benefits of EVs (this is why over 300 in-person events normally happen during National Drive Electric Week). Since word of mouth is such a crucial source of information for car shoppers, this is important work that needs doing (we can help equip you for this).

 

The creator making content for a good cause: He’s hilarious, writes great scripts, and knows that public education is a crucial step. It’s probably safe to say that online media consumption increased for most everyone during the pandemic. More than ever, content creators can use their skills and platforms to raise awareness and drive action.

 

The school employee making solar happen: Her passion is helping school communities flourish, she has a position of leadership, and she wants to work toward an education system completely powered by clean energy. Given the array (no pun intended) of benefits that solar now offers to schools, teachers, administrators, school board members, parents, and other stakeholders can champion a win-win-win solution for their community. 

See if you can set aside a few minutes this week to fill out your own venn diagram (we’d love to see it via email or social if you want to share!). If your diagram relates to making solar (on schools or homes) and electric vehicles (cars or school buses) happen, head to our pathways page to get started! Have a totally different but excellent idea? Email us at hello@generation180.org.

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More and more U.S. schools are fighting for better access to solar

May 12, 2021

This article is from the May 12, 2021, issue of Flip the Script, a weekly newsletter moving you from climate stress to clean energy action. Sign up here to get it in your inbox (and share the link with a friend).

There’s a growing movement among U.S. schools to choose renewable energy sources, with many switching to electric buses and powering their buildings using solar energy. In most cases, they’re taking advantage of a supportive policy environment that helps them to seriously reduce the costs of going solar and to reap numerous other benefits. But in a few states—like Virginia, Wisconsin, Florida, and West Virginia—gaining access to low-cost solar isn’t as easy, and school districts are fighting for the right to capture their power from the sun.

In most states, schools fund solar through a power purchase agreement (PPA), a financing approach where a third party (either a utility or solar developer) installs, owns, and operates the new solar array. The school then buys the electricity produced from the panels at a fixed rate, usually at a cheaper cost than buying it from the grid. Crucially, third-party financing through PPAs has enabled school districts to go solar and reap much-needed bill savings from day one, without facing the upfront cost of purchasing and installing the panels or paying ongoing maintenance costs.

Across the U.S., 29 states (and D.C.) allow third-party financing arrangements, such as PPAs, to reduce the upfront cost of solar. But PPAs aren’t an option everywhere, and they’re actually illegal in seven states, where utilities continue to oppose practical tools like third-party financing. In places where PPAs aren’t allowed, schools looking to go solar generally have to find another way to cover the cost of the panels, or they just don’t take the leap because of the high upfront expense.

Fortunately, communities in several states are fighting for equal access to (cheaper) solar, hoping to produce their own energy while saving money and creating local jobs. Here are a few examples where the fight is under way:

Removing utility roadblocks to solar in southwest Virginia

In recent years, Virginia has risen to the top in school solar installations, and now ranks eighth nationwide. But access to solar has varied across the state, depending on which utility company provides power to the local community. Many school districts located in the service area of Dominion Energy, the state’s biggest utility, have funded large solar projects through third-party PPAs. Since 2014, when Dominion authorized the use of PPAs in its territory, the amount of solar installed at Virginia schools has grown by over a hundredfold. Fairfax County Public Schools, the tenth largest school district in the country, is using a PPA to put solar on 87 schools with no upfront costs and expects to see long-term energy cost savings of $60 million.

solar on virginia schools has grown 100x since 2014

Meanwhile, in the state’s rural southwest region, the amount of solar installed on schools is tiny—equivalent to what can be installed at one home. Appalachian Power has yet to give public entities access to third-party PPAs, and communities have been fighting for years to change that. In March, a new law was passed that requires the utility to provide access to PPAs to schools and localities in its territory. But the utility continues to drag its feet on finalizing the new solar contract to authorize PPAs, and school districts across the region are calling for immediate, fair, and equitable access to this critical financing tool.

Fighting for third-party solar financing in Wisconsin

Solar advocates in Wisconsin are gearing up for a similar fight. In February, the Midwest Renewable Energy Association (MREA) and Earthjustice filed a lawsuit in state court to open up solar and other clean energy opportunities for communities. In its filing, MREA asks the court to ensure that the Public Service Commission does not illegally interfere with competitive clean energy alternatives and instead sticks to its role of regulating monopoly utility companies.

Specifically, the lawsuit challenges unlawful guidance documents from the Commission that discourage electricity consumers (including school districts) from using third-party financing for solar systems on their properties. The current guidance, which prevents people from reaping utility bill savings from solar, essentially limits solar access to only those who can afford to buy the panels outright, thus discriminating against lower-income customers. “We’re not asking for favorable treatment. We’re asking for fair treatment. Clean energy alternatives to the monopoly utility model can stand on their own. We’re asking the [Commission] to stop holding them back,” said MREA director Nick Hylla.

Pushing to make PPAs legal in Florida

The fight to allow PPAs continues in Florida, which ranks 24th in the nation for installed solar capacity at schools, despite being the “sunshine state.” Florida is one of only seven states in the country to explicitly ban PPAs, even though it would stand to gain 25,000 new jobs and spur $4 billion in economic investment if PPAs were legalized.

In March, Generation180 and Solar United Neighbors joined together with 64 schools, localities, universities, and nonprofits to call on state lawmakers to endorse bills that would open up access to PPAs. Miami-Dade County Public Schools, the fourth largest district in the country, became a supporter of PPA legislation thanks to advocacy efforts lead by local high school students and parents at MAST Academy.

Luisa Santos, Miami-Dade School Board, and Thomas Brulay, MAST Academy

MAST Academy set out to become first Florida school to achieve net-zero energy and net-zero waste. After learning that they would need PPAs to fund a sizable solar array, MAST students gathered over 1,000 petition signatures and wrote to newspapers in support of legalizing PPAs. They convinced the leaders of the district, which has an annual electricity bill of $65 million, that investing in clean energy would reap tremendous financial, educational, and health benefits. On the day before Earth Day, it became the first district in the South to commit to 100% clean energy by 2030.

Shortly after that commitment was made, the Florida legislature failed to advance any bills enabling PPAs, a necessary step for the district to meet its goals. If Miami-Dade County Public Schools could utilize PPAs to install an average-sized (250 kilowatt) solar system at every school, it could take a giant leap towards its energy goals. While paying no upfront costs, they’d save approximately $3 million a year—money that could be directed toward teaching and educational tools, and improve student health and safety.

Expanding solar access in West Virginia—but with conditions

In contrast, West Virginia has made welcome progress in updating antiquated electricity regulations. A coalition of businesses, local governments, elected officials, and community organizations, has been pushing for access to PPAs in the ‘Mountain State’ for several years. Last month, they succeeded in making West Virginia the 29th state to allow PPAs.The state legislature passed a bill exempting solar PPAs from falling under the jurisdiction of the state Public Service Commission. The law is designed to encourage retail customers (like schools) to invest in solar energy by specifying that solar energy systems located on and serving specific premises do not constitute “a public service.”

While access to this funding method builds a new runway for solar to take off across the state, the new law comes with conditions that limit this growth. For example, the total of all PPAs (plus net metering arrangements for selling power back to the grid) for a given utility cannot exceed a cap of 3 percent  of the utility’s total customer peak demand during the previous year. The law also limits how much solar power a customer can generate onsite to no more than 25 kilowatts for residential, 500 kilowatts for commercial and 2,000 kilowatts for industrial.  Even with these limits, this is a big win that will help a state known for coal to turn towards the sun.

If you want to help advocate for your school to go solar, check out our Solar for All Schools page for a map of all solar schools and tools to help your school do it.

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Will the feds get an “A” for electric school buses?

May 5, 2021

This article is from the May 5, 2021, issue of Flip the Script, a weekly newsletter moving you from climate stress to clean energy action. Sign up here to get it in your inbox (and share the link with a friend).

There’s so dang much happening in clean energy these days that it can be hard to keep up. Here’s one key trend that’s largely gone under the radar until now: electric school buses. Public health advocates have been promoting the benefits of these zero-emission kid transporters for a while, but only recently have both lawmakers and school districts jumped in on the action. Why? Electric school buses are a win-win for our children’s health and the climate—and much-needed investment from the government may soon actually happen.

In recent months, unprecedented federal funding opportunities have opened up to convert the nation’s 500,000 school buses to electric. At least three bills introduced in Congress this year—the Clean School Bus Act, the CLEAN Future Act, and the Clean Commute for Kids Act—call for billions of dollars to speed this transition over the coming decade. Aspects of these bills will likely be integrated in some form into the final version of President Biden’s newly unveiled $2.3 trillion infrastructure package, the American Jobs Plan. The plan would make at least a fifth of the nation’s school bus fleet electric, covering the costs of both buying the buses and building charging stations.

School buses might seem like “small potatoes” compared to other clean energy issues, but they’re actually a big deal. More than half of all public school kids in the U.S.—nearly 25 million children on a typical school day—ride the bus to attend classes and events. School buses account for a whopping 90 percent of all buses in the country, so if we’re aiming to tackle the problem of rising greenhouse gas emissions from transportation (which we need to), then school buses are a key target. With almost all of these buses still running on dirty diesel fuel, there’s an electric revolution waiting to happen in the school parking lot.

 

Clean buses equals healthier kids

Clean buses, healthier kids

Anyone who’s ever waited for the bus knows what it’s like to breathe in diesel fumes: they’re thick, choking, and clearly unhealthy. Studies have found that pollutant levels on diesel buses are 5 to 10 times higher than those in nearby areas, and there are strong associations between even low-level air pollution and deadly respiratory diseases. School children are at particular risk: breathing polluted air can lead to short-term struggles with cognitive tasks and focus, and over the longer term, diesel fumes can negatively affect brain development and overall academic performance.

In contrast to diesel, electric buses pollute far less, even if the electricity used to charge them comes from power plants that burn fossil fuels like coal and natural gas. (In the future, of course, the buses would ideally be powered by solar and wind power.) One study found evidence that retrofitting school buses improves kids’ test scores. Electrifying school buses is also an important step in addressing climate change and economic inequities, since the areas with the highest air pollution levels are also often poorer communities and communities of color.

 

Lowering the sticker price

Lowering the sticker price

Despite the attractiveness of going electric, the main barrier for school districts has been economic. The upfront cost of an electric school bus is nearly three times that of a diesel bus. However, if the full life cycle of the bus is considered—from its purchase to decommissioning—electric buses are actually competitive with diesel buses, mainly because of the lower lifetime operating costs. Estimates put lifetime savings for each electric school bus in the tens of thousands of dollars when compared to a diesel bus—driven largely by reduced fuel costs and maintenance.

To get over the cost hurdle, school districts around the country are taking various approaches, from obtaining grants and using funds from the Volkswagen emissions scandal settlement —which usually enable districts to buy 1-2 electric buses at a time—to more creative tactics that lay the path for full-fleet electrification. California’s Twin Rivers Unified School District, one of the country’s first districts to start operating electric buses (in 2016), has used funding from the state’s emissions trading program to assemble the largest zero-emission school bus fleet in North America, with 40 total buses. The district plans to shift all 130 of its buses to electric in the next 2.5 years.

In contrast, Montgomery County Public Schools in Maryland is using a leasing arrangement to transition its fleet over the next 12 years. The county recently signed a four-year contract with a vendor to switch out 326 diesel buses (more than 20 percent of the total) with electric versions, paying a fixed rate that will cover the use of the new buses, plus all charging infrastructure and the electricity and maintenance costs. The vendor, meanwhile, is responsible for buying the buses upfront and aims to recoup at least some of its investment through savings on fuel and maintenance. (The project will also earn revenue by using the bus batteries to store energy, which can then be sold back to the grid.) “I am hoping this will be a model that opens doors for others that have the same reluctance that I did to say, ‘I can do this with existing funds,’” said Todd Watkins, the district’s transportation director.

A third district, Bethlehem Central School District in New York state, aims to fund its transition to all-electric by using money saved from reduced bus operations as a result of the COVID-19 pandemic, as well as obtaining at least $1 million in grants from the state. The grants and other funding would put the upfront cost of a new electric bus within $40,000 of the cost of a new diesel version, and bring down the total cost of ownership to within $800 of a diesel bus.

 

federal action

Federal action to amp things up

The economic calculus will only get easier if the funding proposals currently making the rounds in Washington end up becoming law. Pushing this legislation through Congress could be a struggle given the Democrats’ slim lead. But even if the scope of funding shrinks during negotiations, a significant chunk of change (possibly in the billions of dollars) will likely be available to support electric school bus purchases. Importantly, the proposed funding doesn’t just center on children’s health but also has a strong equity component, earmarking a share of the grantmaking to districts with high pollution risks.

With the current laser focus at the federal level, electric school buses could rapidly hit the mainstream, giving the industry the boost it needs to prove itself in the market, and leading to broader adoption of the buses for both city and private fleets.  E-bus technology is advancing quickly: one bus recently set a record by driving more than 1,000 miles on a single charge, and a new fast-charging system being tested can “fuel” a bus fully in 10 minutes. As Senator Alex Padilla (CA) recently noted, shifting to zero-emission school buses isn’t just a smart market move, it’s “an essential aspect of building equitable, sustainable infrastructure and is a wise investment in our children, our environment and our future.”