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HomeMy WebLinkAboutagenda.council.worksession.20150706 CITY COUNCIL WORK SESSION July 06, 2015 5:00 PM, City Council Chambers MEETING AGENDA I. Climate Sustainability Update, Citizen Climate Lobby and Greenhouse gas inventory Page 1 of 5 MEMORANDUM TO: Mayor and City Council FROM: Ashley Perl, Climate Action Manger, Canary Initiative THRU: CJ Oliver, Director of Environmental Health & Sustainability DATE OF MEMO: June 30, 2015 MEETING DATE: July 6, 2015 RE: Climate Action Update REQUEST OF COUNCIL: There is no formal request for City Council at this time. This is an informational update only. By providing context on local climate mitigation efforts, the information provided illustrates that while progress towards Aspen’s community goals has occurred and continues, adequately addressing the climate challenge and meeting the city’s established goals will require an increased willingness to act and a renewed commitment to protecting Aspen’s climate. This informational update marks the start of a process to re-engage the community and the city in climate protection planning and actions. PREVIOUS COUNCIL ACTION: The year 2015 marks ten years of work by the city of Aspen reducing greenhouse gas emissions and combating climate change. In 2005, the City of Aspen realized that a changing climate was impacting Aspen and would continue to affect Aspen long into the future. At that time, the city commissioned a report titled Climate Impacts and Aspen that showed how Aspen’s climate was already changing and how it would continue to do so. In response to this reality, the city started the Canary Initiative, a city department dedicated to fighting climate change and preparing Aspen for a different future climate. The first task of the Canary Initiative was to conduct an assessment of Aspen’s greenhouse gas emissions for the year 2004. A year later, Aspen formally adopted two greenhouse gas reduction goals: Reduce greenhouse gas emissions by 30% below 2004 levels by the year 2020 Reduce greenhouse gas emissions by 80% below 2004 levels by the year 2050 Aspen is among a group of over 1000 US and Canadian cities that have adopted formal emissions reduction goals, and Aspen is a member of a much broader international community working to reduce greenhouse gas emissions. Following City Council’s adoption of these goals, the city approved the Canary Action Plan, a document that laid out the roadmap for achieving greenhouse gas emission reductions in Aspen through the year 2009. City Council has since made numerous decisions that decreased greenhouse gas emissions in Aspen, however, City Council has not formally adopted an updated Canary Action Plan, a necessary next step for Aspen to continue to fight climate change and achieve the long term goals of the community. P1 I. Page 2 of 5 DISCUSSION: Canary at Work Today: The Canary Initiative of today looks similar to that of ten years ago in that Canary has two areas of focus: Reduce greenhouse gas emissions in Aspen and globally (Carbon Mitigation) + Ensure that Aspen is prepared for a changing climate (Resiliency Planning) To accomplish these two goals, Canary Initiative staff share their time between spurring action and policy locally in the Roaring Fork Valley and lending Aspen’s voice to the state, national and international dialogue on climate change. This division of time between local action and global policy is intentional and is explicit in the mission of the Canary Initiative. Aspen must first and foremost take responsibility for our footprint and work to reduce our impact at home. At the same time, Aspen’s future climate will be determined by greenhouse gas emissions all over the world, not just those emitted locally. Thankfully, the small town of Aspen has a big voice and can act as an example for what is possible in other towns across the globe. Because Aspen is well known and has historically had a reputation for cutting-edge environmental programs, our voice carries weight when we lend it to the state, national and international dialogue on climate. Aspen’s future ability to fight climate change will be determined by our ability to continue to lead by example locally and by the strength of our voice in the global fight to reduce greenhouse gas emissions. Focus on Mitigation: This worksession is meant to be an update to City Council and the community on all projects and work related to climate mitigation, using the recently completed 2014 Greenhouse Gas Inventory (Attachment A) as a guide for the discussion. As Aspen moves closer to the year 2020, the date when we are bound to a 30% reduction in greenhouse gas emissions, the Canary Initiative continuously tracks Aspen’s progress by completing a communitywide greenhouse gas inventory every three years. These inventories track progress toward the 2020 and 2050 goal, and the previous inventories were completed in 2004, 2007 and 2011. The most recent inventory is now complete for the year 2014. Highlights from the 2014 Inventory: Communitywide GHG emissions are down 7% from the 2004 baseline The inventory measures five key sectors that affect the overall community emissions: Transportation – All the cars, trucks, and buses on the roads in Aspen and a portion of commuter traffic on Highway 82: Reduced 13% Commercial Energy – The electricity, natural gas and propane used to heat, cool, and power all commercial buildings: Reduced 11% Residential Energy – The electricity, natural gas and propane used to heat, cool and power all homes and residents: Increased 5% P2 I. Page 3 of 5 Airport – All of the fuel sold and dispensed at the Aspen Pitkin County Airport for use in airplanes and the emissions from ground support equipment - Increased 15% Landfill – The emissions from disposal of waste at the Pitkin County Landfill and the energy and fuel used onsite - Increased 2% Although a 7% decrease seems modest, it is important to note that reductions were achieved despite a growing population (5% increase) and economic growth (taxable sales up 3-4% per year). In contrast to other cities that are working towards similar goals, Aspen has reduced emissions more than 28 other cities. However, 21 other U.S. cities are outpacing Aspen, some with as much as a 31% reduction in GHG emissions. Contributors to Success: Although Aspen is not on track to accomplish the 30% reduction goal by 2020, the community’s GHG emissions are moving in the right direction thanks to numerous initiatives and community support over the last five to ten years. A listing of some of the most notable community accomplishments shows that Aspen is working to reduce emissions in all five sectors: Transportation: - 1st rural Bus Rapid Transit system in the U.S. (VelociRFTA) - City of Aspen transit routes are free and carry over 1million passengers/year - 1st rural bike share system in the U.S. (We-Cycle) - Paid parking and carpool incentives - Silver rated Bicycle Friendly Community - Increased electric vehicle charging stations Commercial and Residential Energy: - Renewable Energy Mitigation Program (REMP) - Energy Smart financing and assistance for homes and businesses to reduce energy - Aspen Electric energy moving towards 100% renewable by 9/2015 - Increased solar panels and use of renewable energy for buildings Airport: - Increased messaging to visitors to reduce car use - Increased fuel efficiency in aircrafts - Aspen/Pitkin County Airport is currently formalizing a sustainability strategy Waste: - Curbside and drop-off recycling for all residents and businesses - Compost collection and drop-off available to all residents and businesses General: - Aspen’s active support for state, federal, and international climate policy o EPA Clean Power Plan o Department of Interior Coal Valuation Analysis o Mayors National Climate Action Agenda - Tree City USA designation (robust and healthy forest canopy sequesters carbon) P3 I. Page 4 of 5 Upcoming Opportunities for Reductions: More Work is Necessary: While cities around the world ratchet up their own environmental sustainability efforts, Aspen will need to take bold action to maintain its well-known leadership position and to ensure the well-being of the community in the face of the challenges of the future. In those cities that are surpassing Aspen with more significant greenhouse gas emissions reductions, there are two best practices that all follow: forecasting and climate action planning. Aspen has the ability to do both of these and will begin to focus in these areas over the next year. Forecasting will give staff the ability to weigh a variety of different policy and program decisions against Aspen’s goals and evaluate how each choice will affect Aspen’s GHG emissions. Climate action planning will then allow Aspen to set in place a long term strategy to reach the 80% reduction goal by 2050. Without long term planning, the dramatic changes needed to achieve our goal will not be realized and Aspen will remain on the ‘business as usual’ track, greatly missing the goal and the opportunity to increase the quality of life in Aspen. In addition to forecasting and planning, Aspen will specifically need to focus on cutting overall energy use and reducing the reliance on natural gas in buildings; significantly reduce the amount of vehicles commuting into and out of Aspen; and work with other energy suppliers in the region to increase the amount of renewable energy that is available to customers. If Aspen is strategic and willing to act, the community could use the climate crisis as a catalyst for the creation of a better, more prosperous way of life in Aspen for all. In the coming year, City Council and the community will have the opportunity to take action and support projects that reduce greenhouse gas emissions. Attachment B provides a list of upcoming programs and actions that can help reduce Aspen’s impact. The attachment is only a starting point to draw attention to upcoming opportunities, but there will be other unexpected projects and decisions where City Council will be relied upon to consider how Aspen’s climate can benefit from or be affected by a community decision. It is important for the community and City Council to realize that achieving an 80% reduction in greenhouse gas emissions by the year 2050 will require bold policy decisions and constant commitment from all members of the community. In the coming year, there will be numerous opportunities for City Council to support programs that reduce greenhouse gases. One of those will be supporting the Aspen Energy Challenge, an energy efficiency competition that challenges Aspen to reduce more energy than 49 other towns to win a $5million prize. The other upcoming opportunity for City Council to support federal climate policy comes from a group of engaged citizens involved in a national non-profit organization called the Citizens Climate Lobby. During today’s worksession, more information will be provided on these upcoming programs. More information is also available in the attachments. Aspen Energy Challenge (Attachment C) Citizens Climate Lobby (Attachments D & E) P4 I. Page 5 of 5 FINANCIAL/BUDGET IMPACTS: Responding to climate change and providing environmental sustainability are not optional goals. These efforts are vital to a way of life that will dictate Aspen’s success now and in the future. As a high mountain resort town, Aspen’s economic success is directly linked to the quality of the environment, as visitors are drawn to Aspen because of its natural splendor. Climate change is already impacting Aspen financially through changing snowpack, increased drought and increased chances for natural disasters. As temperatures in Aspen continue to warm (8-10 degrees by 2050), town will continue to feel the financial stress of these and other impacts due to climate change. Although there is no specific budget request to City Council at this worksession, spending city funds today on protecting Aspen’s environment will, without a doubt, pay off for Aspen in the long term and shows a commitment to investing in Aspen’s future success. ENVIRONMENTAL IMPACTS: City Council’s Environmental Sustainability Dashboard contains numerous measures related to reducing energy and greenhouse gas emissions, but the overall work of the Canary Initiative and the path towards a near zero carbon town will move the needle on all of the measures that matter to Council and the community. As Aspen reduces greenhouse gas emissions, residents and visitors alike will experience a higher quality of life, complete with less congestion, more walkable streets, cleaner air, and a more connected community. CITY MANAGER COMMENTS: ATTACHMENTS: Attachment A: Executive Summary: 2014 Communitywide Greenhouse Gas Inventory Attachment B: 2015/2016 Upcoming Programs Attachment C: Explanation of Aspen Energy Challenge Attachment D: Description of Citizens Climate Lobby Attachment E: Regional Economic Modeling summary of Carbon Fee and Dividend P5 I. P6 I. Executive Summary Background: Since 2004, the City of Aspen has tracked communitywide greenhouse gas (GHG) emissions as part of a commitment to mitigating Aspen’s contributions to climate change. The production of a base-year GHG inventory in 2004 facilitated establishing long- term reduction targets of 30% below 2004 levels by the year 2020 and 80% below those levels by 2050. Subsequent communitywide GHG inventories, published for calendar years 2007, 2011 and now 2014 provide the opportunity to track progress in working towards the 2020 and 2050 reduction targets. Approach and Scope: Aspen’s 2014 Communitywide Greenhouse Gas Inventory was conducted in accordance with the US Community Protocol for Accounting and Reporting of GHG Emissions (USCP), and presents results in metric tons (MT) of Carbon Dioxide Equivalents (CO2e). Ensuring consistent inter-annual comparisons is a top priority and required recalculating historic emissions for 2004, 2007 and 2011 by applying updated practices, categorizations and carbon intensities to the original data from those years, as is the best practice associated with carbon accounting. Communitywide emissions are totaled but also reported by sector to provide deeper insight into where the most progress has been made and determine where ongoing mitigation efforts might focus. The 2014 Inventory represents a sector–based approach to GHG accounting, quantifying and allocating GHG emissions to 6 sectors, and consistently referring to them as: 1. “Residential energy” (CO2e from the use of electricity, natural gas and propane in residential buildings); 2. “Commercial energy” (CO2e from the use of electricity, natural gas and propane in commercial buildings); 3. “Vehicles” (CO2e from all on-road vehicle transportation within Aspen and a portion of trips originating from or destined to Aspen) 4. “Airport” (CO2e from aviation fuel dispensed at the Aspen Pitkin County Airport and from gasoline and diesel dispensed for ground support equipment) 5. “Landfill” (CO2e from solid waste and Aspen’s portion of on-site energy use): and 6. “Wastewater” (CO2e from the treatment of Aspen’s wastewater). P7 I. Results: Since 2004, the Aspen community has reduced total CO2e emissions by 7.4% (Figure 1). After initially climbing between 2004 and 2007, net communitywide CO2e dropped 7% below base- year levels in 2011. Between 2011 and 2014, emissions only declined by an additional 0.44%. Moving forward, meeting Aspen’s long-term targets will require substantial additional emissions reductions from 2014 levels on the order of -23% by 2020 and -73% by 2050. Figure 1. Aspen's CO2e Emissions 2004-2014 and Future Targets P8 I. 2014 Aspen Communitywide Greenhouse Gas Inventory In 2014, the Aspen community generated 394,341 metric tons of CO2e: about the same amount as the energy used in 36,000 average American homes for one year or the emissions associated with driving an average passenger vehicle 934 million miles (EPA, 2014). Residential energy use accounts for 31% of Aspen’s 2014 emissions (Figure 2), making this sector the community’s largest single source of GHGs. Between 2004 and 2014, residential energy emissions increased by 5%. In terms of scale, residential energy is followed somewhat closely by commercial energy, which comprises 25% of Aspen’s 2014 emissions. Since the base year, commercial energy emissions have decreased by 26%. Taken together, more than half of Aspen’s 2014 GHGs (56%) came from the use of electricity, natural gas and propane in residential and commercial buildings, and collectively fell 11% between 2004 and 2014. Vehicles traveling within and to or from Aspen comprise the third largest source of the community’s emissions at 19% of the total, and have declined 13% since the base year (Figure 3). Emissions related to the Aspen/Pitkin County Airport comprise a significant percentage of the communitywide total (15%) and have increased 15% over 2004 levels despite a decrease in aircraft operations. Aspen’s Pitkin County Landfill emissions represent 9% of the community’s total 2014 GHG impact and have increased 2% since 2004. Emissions related to wastewater at the Aspen Consolidated Sanitation District represent less than 1% of the communitywide total (only 0.01%) and are therefore considered “de - miminis”, and not represented in the graphs and figures throughout the Inventory. Wastewater emissions fell 12% between 2004 and 2014. Results pertaining to each one of the six sectors are discussed in detail in the main body of the report. Figure 2. Sources of Aspen's GHG Emissions in 2014 P9 I. 2014 Aspen Communitywide Greenhouse Gas Inventory Context: While a 7.4% decrease in net emissions from 2004 levels appears modest, it is important to contextualize these results by comparing them with changes in other community metrics that typically influence communitywide GHG emissions. Two of these are economic activity and population, both of which have grown since 2004. Inflation-adjusted total retail sales occurring within the City of Aspen have grown 22% since 2004 after a decline between 2007 and 2011 during the recession (City of Aspen Finance Department, 2014). Population within City limits has grown by 5.5% over the same time period from 6365 people in 2004 to 6712 in 2014 (Colorado Department of Local Affairs, 2014). The fact that the community appears to have to decoupled growth in emissions, at least somewhat, from both population and retail sales is a testament to the success of its many communitywide GHG reduction programs such as public transit and growth in the amount of renewable electricity sold by local utilities. Without these programs, communitywide emissions would have likely followed the upward trend of these other community indicators. Figure 3. Change in Emissions, Population and Taxable Sales (inflation-adjusted), 2004-2014 P10 I. 2014 Aspen Communitywide Greenhouse Gas Inventory Conclusion: Despite growth in both population and economic activity since 2004, the Aspen community has successfully reduced its overall GHG emissions by 7.4% since that time. While this rate of decrease will not facilitate the successful fulfillment of Aspen’s 2020 GHG reduction goals, it does demonstrate that it is possible to grow the economy and serve more residents while simultaneously reducing emissions. Whether or not quality of life has improved for most residents of and visitors to Aspen over this same time period is subjective. However, several initiatives responsible for facilitating a part of the 7.4% GHG reduction likely have enhanced the overall well-being of the community. One of these, the growth in RFTA ridership since 2004, has mitigated traffic congestion, saved commuters time and money and improved Aspen’s air quality while also reducing GHG emissions. Similarly, Aspen Electric’s efforts to dramatically bolster the percentage of its sales coming from renewable energy has saved consumers money, earn publicity for the community, and fostered citizen engagement while dramatically cutting emissions. Both of these examples indicate that programs aimed at reducing emissions can often enhance community and quality of life by generating a myriad of co -benefits. In moving towards 2020, it is clear that accomplishing the communitywide goal of reducing GHG emissions by 30% is a challenge that will Figure 4. Changes in Aspen’s Communitywide GHG Emissions by Sector, 2004-2014 P11 I. 2014 Aspen Communitywide Greenhouse Gas Inventory require ongoing planning and dedication, but also that doing so provides an opportunity to continue enhancing quality of life for the Aspen community. P12 I. Attachment B: Upcoming programs with GHG reduction potential - The Environmental Sustainability Dashboard should be used for all projects and decisions as a tool to help evaluate the environmental impacts of decisions (City Council) - The city can expect more requests for support for expanded transit service to underserved areas, especially affordable housing (Transportation, Canary and We- Cycle) - Support citizen engagement via Citizens Climate Lobby (Canary and the community) - Aspen Energy Challenge (Canary, CORE, Holy Cross, Source Gas and Aspen Electric) - Staff will engage Council and the community in a discussion of the Climate Action Plan, and strategies to implement the plan (Canary) - Staff will work with the community and City Council to develop an energy benchmarking program for buildings (Canary) - Staff will provide resources and funding towards efficiency improvements in small lodges as part of the ‘Small lodges program’ (Community Development, CORE and Canary) - Staff are currently working to update the Bike and Pedestrian Master Plan and address areas where connectivity is needed (Castle Creek Bridge bike bath and Rethink the Streets) (Engineering) - Cozy Point offers an opportunity to increase the awareness and knowledge of the value of local food (Parks Department, ACES, Canary) - Electric Vehicle Readiness Plan (Utility and Canary) - Changes to off-street parking requirements (Community Development) - Reduce energy use at the school district and involve students (Transportation and Canary) - City-owned buildings offer energy reduction opportunities and the remodel or replacement of any existing building offers potential to create an environmentally responsible building as an example for what the city would like to see from private developers. (ARC, Asset, Police, Canary) - CORE offers Development Assistance Grants to help with the design of an efficient building. P13 I. The Aspen Energy Challenge  Aspen is one of 50 communities competing in a national energy efficiency competition with a $5,000,000 prize awarded to the top contender based on energy savings and community involvement  Through 2016, Aspen is competing to save the most electricity and natural gas in homes, schools, and municipal buildings  Local utilities and community partners launched the Aspen Energy Challenge to lead Aspen’s effort in the competition YOU WIN! ASPEN WINS!  Do your part and start saving energy in your home today!  Grab an energy efficiency cheat sheet, sign up for a residential energy assessment, or take advantage of rebates for energy saving upgrades  Through saving energy, you will save money, reduce your en- vironmental impact, and make your home healthier and more comfortable  Visit AspenEnergyChallenge.com P14 I. Fee and Citizens’ Climate Lobby is a non-profit, non-partisan, grassroots advocacy organization advancing a national non-partisan, market-based policy to address climate change. In order to generate the political will necessary for passage of the Carbon Fee and Dividend proposal they train and support volunteers to engage elected officials, the media and the public. Currently 266 chapters are in place around the U. S. and more in Canada as well as other parts of the world. The Roaring Fork Valley has two nationally recognized chapters – one in Aspen, which has been active since October 2014 and the other is the Roaring Fork Valley chapter, which has been active since 2013. Proposed Policy CCL’s Carbon Fee and Dividend proposal is an economically efficient, revenue-neutral way to internalize the costs of burning carbon-based fuels across the entire US economy. Pricing carbon is the policy approach that economists, scientists, politicians and corporations say is the optimal mechanism to mitigate the likelihood of catastrophic climate change while simultaneously growing personal prosperity and the economy. Carbon Fee and Dividend promises to reduce nationwide CO2 emissions 33% in 10 years, 52% after 20 years, create 2.1 million new jobs and add up to $85 billion to annual US GDP; all while saving 13,000 lives annually due to reduced air pollution . What i Tenets of the policy: 1. Place a steadily rising fee on the CO2 content of fossil fuels. As long as fossil fuels remain artificially cheap, their use will rise. Correcting this market failure requires their price to account for their true social costs. To gain bipartisan support CCL advocates for a true cost-comparison between competing fuels AND reducing greenhouse gas emissions. As proposed, the carbon fee will start at $10-$15/ton and steadily rise each year through 2035, providing the economy both market certainty and ample time to de- carbonize. The initial fee would be equivalent to $.10/gallon of gas to consumers. 2. Return all of the revenue from the carbon fee back to households. 100% of the revenue from the carbon fee will be held in a Carbon Fees Trust fund and returned directly to all US households as a monthly dividend. P15 I. The vast majority of households will receive more than they will pay for increased energy costs. This feature will inject billions of dollars into the economy, protect family budgets, free households to make independent choices about their energy usage, spur innovation and build aggregate demand for low-carbon products at the consumer level. British Columbia enacted a revenue neutral carbon fee in 2008 and it costs less than 1/10th of 1% to administer the dividends. The economy has not suffered and has faired better than other parts of Canada, while consumption of fossil fuels has declined. 3. Border adjustments will discourage businesses from relocating. Import fees on products imported from countries without a carbon fee, along with rebates to US industries exporting to those countries, will discourage businesses from relocating where they can emit more CO2 and motivate other countries to adopt similar carbon pricing policies. Existing tax and trade systems avoid complex new institutional arrangements. Firms seeking to escape higher energy costs will be discouraged from relocating to non - compliant nations (“leakage”), as their products will be subject to import fees. 4. It's good for the economy AND even better for the climate. A study from the Regional Economic Modeling Institute shows that a carbon fee-and- dividend will reduce CO2 emissions 50% below 1990 levels in 20 years and that recycling the revenue creates an economic stimulus that adds 2.8 million jobs to the economy. How is CCL going to get this policy proposal to become legislation? CCL utilizes grassroots organizing through local chapters to create a groundswell of support and confidence in the effectiveness of the Carbon Fee a nd Dividend proposal.  By lobbying in support of the Carbon Fee and Dividend proposal through friendly relationships with our federally elected representatives, with respect, appreciation and gratitude for their service. CCL local chapter representatives have met three times, and will continue to meet with Representative Tipton, and Senators Bennet and Gardner in Grand Junction and in Washington, D.C. Our CCL colleagues from chapters around the country are doing the same in many legislative districts in almost all 50 states.  We write letters to the editor and op-eds, and meet with editorial boards to gain their editorial endorsement. We also seek adoption of resolutions in support of the Carbon Fee and Dividend by local elected officials. Town of Carbondale and Pitkin County Commissioners have adopted a resolution in support of Carbon Fee and Dividend, both of which were presented to congressional representatives during a recent lobbying trip in Washington.  We facilitate presentations and table at events to promote CCL and introduce others to our Carbon Fee and Dividend proposal. P16 I. Summary of “The Economic, Climate, Fiscal, Power, and Demographic Impact of a National Fee-and-Dividend Carbon Tax” By REMI and Synapse Summary by Danny Richter, Ph.D. About the study: Citizens' Climate Education Corporation (CCEC) and Citizens' Climate Lobby (CCL) contracted a third party, Regional Economic Modeling, Inc. (REMI) to do a nation-wide macroeconomic study on the impact of its Fee and Dividend (F&D) policy. The policy modeled is not a perfect representation of F&D (most obviously, F&D begins at $15 per ton whereas the study began at $10 per ton), but it is quite close, and accounts for the impact F&D's border tariff adjustment would have on the US economy. REMI used three models to do the study: (1) The Regional Energy Deployment System (ReEDS) built by the National Renewable Energy Laboratory and run by Synapse Energy Economics; (2) the Carbon Analysis Tool (CAT); an enhancement of the open-source CTAM model and populated by data from the US Energy Information Administration (EIA); and (3) REMI PI+, a proprietary dynamic model of subnational units of the United States’ economy whose methodology and equations are peer-reviewed and available to the public. Output included impacts on 160 industries, nationally and regionally for the 9 “U.S. Census” regions commonly grouped together in a number of federal data sources and in the energy market forecasts from the EIA. Model results were able to estimate the effects of the policy on GDP, personal income, employment, prices, carbon dioxide emissions, mortality due to NOx and SOx emissions, revenues, monthly dividend amount, energy generation capacity by technology, energy Figure 1: U.S. CO2 emissions under F&D (yellow) and without a carbon tax (blue). F&D reduces US emissions to 69% of 1990 levels by 2025, and to 50% by 2035. Figure 2: Thousands of jobs created by F&D relative to the case without a carbon tax. Over a million jobs created within 4 years, over 2 million within 9 years. P17 I. generation by type, investment in power, population, and economic migration on both a regional and national level. Income and employment figures for each of 160 industry categories considered are included. These 160 industries encompass the entire economy. The results are all relative to a baseline case where there is no carbon tax (modeled by using the exact same set-up, with a $0/ton value for the carbon tax). In other words, all three models were run two times. Both times, the set-up was identical except for one thing: the price of carbon was either $0 from 2016-2035 (the baseline), or was $10 per ton in 2016 and increased by $10 every year after that (F&D). Why should we trust REMI? CCL hired REMI because we are committed to quality data free of ideological taint that you might get from some think tanks. As its name suggests, REMI models regional economics. It does this well. Dr. George Treyz founded REMI in 1980, after working as an academic with Nobel Prize-winner Lawrence Klein and other pioneers in the field of econometric modeling. REMI's modeling products grew from Dr. Treyz's work on one of the first regional macroeconomic models ever created: the Massachusetts Economic Policy Analysis (MEPA) model. Close links to the upper echelons of academia have persisted throughout REMI's 3+ decades of experience, resulting in several academic publications in journals such as the American Economic Review, the Review of Economics and Statistics, and the Journal of Regional Science. This experience and expertise is why private and public entities from all across the political spectrum have entrusted REMI to do their analyses, and paid them well for that expertise. These former clients include, but are not limited to: the American Gas Association (AGA), the Nuclear Energy Institute (NEI), the National Federation of Independent Business (NFIB), the National Education Association (NEA), the International Brotherhood of Teamsters, Booz Allen Hamilton, EY (formerly Ernst and Young), PWC (formerly Price Waterhouse Coopers), and ICF International. Like CCL and CCEC, REMI is truly nonpartisan. In that same spirit, CCL and CCEC did not attempt to influence the outcome of the report in any way. In fact, we were excited when we saw that not all the results were positive for every region, because that speaks to the integrity of the analysis. Our first priority is a livable world, and we can't get there without an honest and clear-eyed view of the facts. Figure 3: Cumulative lives saved from avoided emissions by region under F&D. Region ENC, including Ohio, Indiana, Michigan, Illinois, and Wisconsin, has the most lives saved. 227,000 American lives would be saved in 20 years under F&D. Figure 4: Annual additional GDP due to Fee and Dividend relative to no carbon tax. The numbers are positive due to a net increase in jobs and more consumer spending from the dividend. Over the 20 years of the study, GDP is $1.375 trillion higher than without F&D. P18 I. Study Highlights: ·CO2 emissions decline 33% after only 10 years, and 52% after 20 years relative to the baseline, $0/ton of CO2 case (Figure 1). ·National employment increases by 2.1 million jobs after 10 years, and 2.8 million after 20 years. This is more than a 1% increase in total US employment we don't get without a carbon tax (Figure 2)! ·13,000 lives are saved annually after 10 years, with a cumulative 227,000 American lives saved over 20 years (Figure 3). ·$70-$85 billion increase in GDP from 2020 on, with a cumulative increase in national GDP due to F&D of $1.375 trillion (Figure 4). ·Size of monthly dividend for a family of 4 with two adults in 2025 = $288, and in 2035 = $396. Annually, this is $3,456 per family of 4 in 2025 ($1152 per capita--children get ½ dividend) (Figure 5). ·Electricity prices peak in 2026, then start to decrease. ·Real incomes increase by more than $500 per person in 2025. This increase accounts for cost of living increases (Figure 6). ·Maximum cost-of-living increase by 2035 is 1.7-2.5%, depending on region (Figure 7). ·Electricity generation from coal is phased-out by 2025. ·Biggest employment gains in healthcare, retail, and other services (excluding public administration). This is because people have more money in their pockets to spend, and these industries are labor-intensive, responding to increased consumer spending by creating more jobs. ·Regional Gross Product is steady or rising in 8 of 9 regions. Why Haven't Previous Studies Found Such Positive Impacts? The majority of previous reports considering a carbon tax have not modeled a completely revenue-neutral carbon tax, do not envision a policy with such an aggressive rate of increase, do not have the same detail as REMI can provide, do not consider a 100% dividend, and do not report health benefits. Where revenue-neutrality was modeled, a “double-dividend” was often discovered in which carbon emissions were reduced and economic output grew. As these previous studies have highlighted, including a May 2013 study by the Congressional Budget Office (CBO), a carbon tax without revenue- recycling is a completely different policy from a Figure 5: Average monthly dividend for a family of four. Each adult gets two full shares, and each child 1 half-shares up to two children for a maximum of 3 full shares per household. Figure 6: U.S. income per capita, after accounting for cost-of-living increases. This means that even accounting for the increased cost of living, the average American is wealthier every single year of the policy. P19 I. carbon tax that does recycle revenue. The two policies, revenue-neutral carbon tax and a carbon tax without revenue returned, should not be confused in terms of their effect on the economy. Failing to consider such a rapid rate of increase in the carbon tax has prevented previous studies from realizing the magnitude of emissions reductions and scale of economic benefit reported in this study. Often, this was because such rates of increase were not considered politically feasible. Most other models, run by academics or think tanks, do not have the detail provided by REMI. Over the past 3 decades, REMI's regional modeling techniques have been refined, detail has been added, and functionality improved. Three decades of such work and refinement in the private sector are what have given it an unmatched level of detail and reliability difficult to replicate. Despite these differences in conception, the results of REMI's work are largely consistent with previous studies in terms a benefit to the economy, industry effects, and emissions reductions. For example, the May 2013 CBO study also stated that a well-designed carbon tax could increase economic output and found a hypothetical $20 per ton carbon tax scenario would result in an 8% reduction in emissions at the national level. If held at that level, REMI's model setup would have found comparable results. Interpreting the Results: Take-home points The biggest take-home from this study is that there is no economic argument against Fee and Dividend. It creates jobs, grows the economy, saves lives, and makes Americans richer. It does this while also reducing CO2 emissions to 31% below 1990 levels by 2025, and to 50% below 1990 levels by 2035. F&D therefore sets the new standard for climate and economic policy. Other policies must now compare their climate and economic impact against F&D. To be against doing anything is to be against jobs, against a larger economy, and against saving American lives. We know of no politician who wants to be against these things, and so we hope that this study will clear the way to rapid passage of F&D. Revision 6: August 1, 2014 Figure 7: Cost of living increases by region. The lowest cost of living increase is around 1.7%, and the highest is 2.5% in 2035. The total increase over 20 years is thus about equal to 1 year of average inflation. P20 I.