As Yale Launches Carbon Charge Study, F&ES Eyes Learning Opportunities

A solar array at Yale's West Campus.

As international leaders convene in Paris for United Nations climate change negotiations, one of the more frequently discussed solutions for reducing global greenhouse gas emissions is setting a price on carbon. But to date it remains unclear whether such strategies would actually work.
 
An experiment launched at Yale this month will examine that very question, testing a series of schemes that utilize behavior forces to improve energy efficiency in buildings across campus. 
 
Over the next six months, several Yale departments, including the Yale School of Forestry & Environmental Studies (F&ES), will participate in an experimental pilot study testing four different carbon-pricing models. Organizers hope the pilot project will provide insights into the best approach for a campus-wide carbon charge.
 
The concept for the larger project, known as the Yale Carbon Charge Project, began in an F&ES classroom. And now members of the F&ES community see an opportunity for applied academic research and new student learning during the project.
 
“Many economists think that putting a price on carbon is how the world should address climate change. But there’s a long way to go between theoretically setting a price on carbon and having it change people’s behavior,” said Brad Gentry, Professor and Associate Dean for Professional Practice at F&ES and member of the first Carbon Charge Task Force.
 
The carbon charge experiment, he said, is an opportunity to bridge that gap.
 
The Yale carbon project emerged during a 2014 Earth Day event organized as part of F&ES Professor Daniel Esty’s course, “Climate Change and the Quest for Clean Energy.”

During a “teach out” panel event that day, Jennifer Milikowsky ’15 M.F./M.B.A., who is now the Carbon Charge Project Manager, asked the panel about Yale’s role in reducing carbon emissions. In an offhand comment, Sterling Professor of Economics William Nordhaus, one of the panelists, suggested, “Yale could implement an internal carbon tax.”

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To the surprise of some, the idea quickly gained traction. Within a year Yale President Peter Salovey appointed a task force, chaired by Nordhaus, to examine whether a carbon tax would be a feasible and effective tool in the university’s sustainability initiatives. Then in April, Salovey announced that Yale would move ahead with a pilot project exploring different carbon pricing options.
 
Putting a price on carbon has been well explored in the private sector, with more than 400 companies working on internal carbon prices. But integrating such a plan on a university campus is a far different thing.
 
“This is taking place and is certainly gaining traction in the corporate world,” said Ryan Laemel ’14, the Carbon Charge Project Coordinator, who along with Milikowsky is helping to implement the pilot project. “But when we start to think about it from an institutional perspective — especially at a university that has so many different types of buildings and actors — it becomes a much more complicated problem. And that’s one of the fundamental goals: to think about how internal carbon pricing might work at a complex institution like Yale.”
 
Advocates hope the pilot project, which officially began on Dec. 2, will provide some answers. In a series of experiments, 20 different Yale buildings will be used to test one of four different carbon-pricing schemes over the next six months.

The four carbon pricing models are:

• A “distributed charge” model in which poor performers — i.e. those who fail to meet their emissions targets based on past performance — pay good performers. It’s a zero-sum game in which, “If you don’t keep up with the Joneses, you gotta pay,” said Milikowsky.
• A target-based model that requires all units to meet 1-percent carbon reduction targets in order to receive annual rebates from the university.
• An energy-efficiency earmark model that promotes investment in future energy improvements. In this scenario, units will pay a monthly carbon tax that is returned at the end of the year on the condition that it be spent on “energy action” improvements within their buildings.
• A price signal model in which individual units will receive utility bills that include detailed information about their energy use. The bills will include, for instance, information about how their energy usage translates into environmental terms known as a “social cost of carbon” that measure the relative environmental impact of GHG emissions.

 
“Feedback from the participants and an analysis of the results will inform a broader conversation about whether and how to consider potential wider implementation at Yale,” Salovey said in an announcement this week. “We believe that this pilot project can serve as a model for other institutions, expanding Yale’s role as a pioneer in researching, teaching, and designing climate change solutions.”
 
Kroon Hall, the administrative home of F&ES and Yale’s first LEED-certified building, will be one of five units assessed in the first scheme. But while the premise of that model is a zero-sum competition among the participants, F&ES administrators plan to work cooperatively with the other departments, said Susan Wells, the Director of Finance and Administration.

“I’ve already reached out to my peers in those other buildings to say, ‘We know this is posited like Survivor, but let’s get together and share best practices,’” Wells said. “Nobody suggested that, but that’s the way we like to roll at F&ES. Let’s collaborate.”

Leaders at F&ES, which is already a campus leader in energy efficiency, have pledged to take the pilot very seriously — for Kroon, and for all of the School’s buildings. While no changes will be made that affect the comfort of occupants — and all initiatives will be cost-effective — the community will target a wide range of measures to improve energy efficiency, Wells said. That includes increased vigilance about open windows in Kroon, communications about cutting energy usage with technology, and a recent “weatherization” event conducted by the student-led Environmental Stewardship Committee. In addition, the School will add real-time energy readings on wall-mounted terminals inside Kroon.
 
Although it remains unclear what will happen after the pilot project is complete, the task force suggested that six months is not enough time to test the potential value of the strategy. They endorsed a three-year follow-up study.
 
“The project has goals, but the pilot is sort of testing some of the means to those goals,” Milikowsky said. “We’re testing the pathway. We don’t feel like we’re at the point yet where we’re testing the project.”
 
The project was designed to complement other sustainability initiatives at Yale, which has set a goal of reducing carbon emissions 43 percent by 2020 compared with 2005 levels.
 
The Yale Sustainability Office issues regular three-year strategic plans focused on what people are doing and how sustainability can be advanced across campus. Now in the final year of the most recent plan, the university aims to achieve a 5-percent reduction in greenhouse emissions and energy use. And last year, Salovey announced $21 million investment in energy projects over three years, in addition to capital projects and operations improvements.
 
Milikowsky and Laemel say the carbon charge project will aim to incentivize and empower all members of the Yale community through simple actions such as closing windows, adjusting thermostats, and shutting off computers at night.
 
“Who does a carbon charge engage? Potentially, anybody who turns on the lights,” Gentry said. “So there will be many more squeals. There will be many more opportunities for learning. There will be many more opportunities for engagement across campus. Opportunities to say, ‘Hey, responding to climate change, reducing our energy footprint, is not just something they’re going to do. It’s something you’re going to do as well.’”

It will also empower building managers to craft and implement fresh energy management solutions based on newly available data, predicted Julie Paquette, Director of Energy Management for the Yale Department of Facilities.
 
“The way I view the carbon charge is as an engagement tool, really,” she said. “The primary components are providing more energy information to decision-makers, and providing more motivation for them to do something with that information.”
 
And that motivation for behavior change, she says, could go beyond just turning off computers at the end of the workday. It also could affect how individuals and departments use time and space on campus — such as incorporating “work at home days,” adopting expectations that buildings can be cold on weekends and dark after 9 p.m., and creating a culture in which workers are willing to share space or work in multi-purpose spaces.

“Clearly, behavior is not limited to personal habits and personal schedules, but includes how the department wants to operate, set policies, and utilize physical assets to support the academic mission and work of students, faculty, and staff,” she said. “The energy implications of both individual behavior and also departmental behavioral policy are huge.”
 
If the complexity of the the carbon charge project makes it an unusual challenge, that also makes it a huge opportunity for F&ES and Yale to conduct research on an issue of increasing global importance, Gentry said.
 
While many sustainability-related activities on campus have focused on operations, he said this project will highlight the value of incorporating such research into the university’s academic mission. The data collected in the coming months, he said, should ultimately be incorporated into classroom research, student projects, and engagement outside the university, he said.
 
“It strikes me that this is exactly what we want to be doing,” he said. “If you think about the university as a learning lab, we should try price mechanisms and see how they work. We should try quantity mechanisms and see how they work. And then we should harvest lessons learned from that and share those widely through our teaching, through our broader engagement and dissemination.
 
“And obviously, everybody’s hoping or believing that the things we learn here could be useful in the outside world,” he added. “So it’s an engaged-type of research opportunity. And I also think it’s important not to see it as a one-off but to see it as a continuing opportunity at Yale. Because none of this is going to be decided quickly.”