A local group is floating a ballot initiative that would tax electricity and natural gas to raise money to combat climate change in Denver.
Most people — residents, business owners and heads of industrial operations — would pay a half-cent per kilowatt more on their electric bill, according to the draft language, which could change as the process matures. Natural gas consumers would pay an extra 4 cents per thermal unit. The average household would see a $46 annual increase, according to organizers.
The tax would not apply to people whose energy comes solely from renewable sources, whether they buy wind and solar credits or contribute to the grid with solar panels of their own.
“Carbon taxes” charge extra for energy that emits pollutive greenhouse gasses, like electricity and heat generated by coal and natural gas. In other countries, some carbon levies target the industry — producers and utilities — but Denver’s version would focus on consumers. (One city’s voters do not have the authority to tax an entire industry.)
No major city in America has a carbon tax, but Boulder does.
Organizers aim to put the measure before voters in November, said Ean Tafoya, a civic activist who co-authored the potential law. Brandon Rietheimer of Green Roofs Initiative fame and Thomas Riggle of the Colorado Sierra Club are the other collaborators.
The revenue — projected to be about $40 million in the first year — would fund a Denver Office of Climate Action and Resiliency to invigorate programs and policies that fight climate change.
Organizers say the measure will accelerate the Hancock administration’s efforts — but also act as a referendum on whether the mayor has done enough, fast enough.
Last year Mayor Michael Hancock verbally committed to powering the city solely by renewable energy sources. He imposed a deadline of 2030 and has some vision documents to guide the work, but Tafoya and company see a gulf between the administration’s goals and the money and tools at its disposal.
“We just feel like climate action is the most important thing right now,” Tafoya said. “I think there’s a lot of great staff that is doing sustainability work, but I feel like they are being stifled by not having the funding and the authority.”
Denver’s Office of Sustainability currently consists of three employees and will spend about $370,000 this year, according to the city budget. Another bureaucratic arm, Denver’s Environmental Quality Division, is staffed with 55 people and will spend about $16 million this year.
Both groups are embedded in the Department of Public Health and Environment alongside divisions like animal protection and the coroner. Under the proposal, both would roll up into one agency with its own executive director and, theoretically, more sway in the city. It’s the same idea behind Denver’s impending transportation department.
“The tax itself is to encourage the transition to renewable energy in a quicker manner,” Tafoya said.
Hancock has not taken a position.
“The administration would never take a stance on a ballot initiative until it makes the ballot,” spokesman Mike Strott said.
The climate change office would help prepare a clean-energy workforce.
The new department would have to build a strategy to develop workers — and transition them — for an emerging clean-energy economy.
The city would “prioritize job skills, transition training, apprenticeships and other opportunities that engage, recruit, and retain economically disadvantaged and traditionally underemployed workers, including people of color, women, persons with disabilities, and the chronically underemployed,” the document states.
As of now, the proposal stipulates that Denver double the number of locals who receive help with their energy bills through the city’s Low-Income Energy Assistance Program to address equity concerns wrought from higher energy bills. This idea may not make it to the final version of the initiative, Tafoya said, though some focus on equity will.
The initiative also requires programs and policies prioritize low-income neighborhoods.
Under the law, Denver would also have to develop a menu of incentives for homeowners and businesses, including tax rebates, to make their homes and operations more energy-efficient.
Boulder is already doing something similar, and Xcel Energy participates.
Denver’s neighbor was America’s first city to install a carbon tax that funds government coffers, according to a 2006 New York Times article. Boulder taxes electricity use but not natural gas (it’s working on that).
No other city has done it since. The state of Washington looked at a referendum for a carbon tax in 2016, but it didn’t pass.
Heat-trapping gases like carbon dioxide have fallen by 16.2 percent since 2005, the year before Boulder voters passed the tax, according to Jonathan Koehn, the city’s environmental affairs manager. Tracking progress is key, he said.
“That’s precisely the point of what we’re doing, and if we can’t show that we reduce emissions … then obviously we’re not doing a very good job,” Koehn said.
Boulder taxes households at just under half a penny. Commercial and industrial properties get taxed at lower rates but usually pay more because they use more.
“By pumping money into efficiency, our hope is that it reduces emissions, but on the household level it saves a lot of money,” Koehn said.
Xcel Energy, Colorado’s major utility, works with Boulder to adjust its residents’ bills. It also has its own plan to go carbon-free by 2050. The industry juggernaut would not take a position on the proposal because it’s not yet on the ballot, spokesman Mark Stutz said.
“It should be noted, however, that we already work closely with all of our communities, including Denver, to address their energy goals,” Stutz said via email. “Xcel Energy already is working to address much of what the proposal seeks to accomplish, through our Colorado Energy Plan and our recently announced zero carbon initiative.”
Environmental organizers have submitted the initiative’s language to Denver’s City Attorney’s Office. If and when it passes muster, they will begin to collect signatures to place it on the November ballot.