The Morning Report
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If you live in San Diego, as I do, then you’re responsible for paying the rent that utilities owe the city through an agreement known as the franchise fee. It may sound like an odd structure, but that’s how it’s always been, and not just locally.
These agreements offer an opportunity to push traditional and mostly fossil fuel-based power companies toward more renewable energy and could help slow the warming of the planet. But many cities, including San Diego, were locked into the terms of their agreements for multiple generations.
Cities are just now beginning to secure renewable energy promises from their local private providers as they renegotiate contracts in this age of climate emergency.
Minneapolis is pushing the envelope. It signed five-year agreements with Xcel and Centerpoint Energy and forged a so-called clean power partnership, which leverages the power of public scrutiny over company pledges to help the city meet its greenhouse gas reduction goals.
During my recent chat with Minneapolis Sustainability Director Kim Havey, an interesting question arose: Why not use the franchise fee to put a price on carbon emissions?
Ever since President Donald Trump pulled out of the U.S.-led Paris Climate Agreement in 2017 (a series of voluntary promises from 197 countries to curb emissions), U.S. mayors (including San Diego’s) stepped up to shoulder the pledge in their own cities instead.
Havey hypothesized that the local franchise fee agreement in his city — arguably the most powerful tool any municipality has over a private power provider — could be used to charge those companies for the amount of greenhouse gases they emit.
Havey said there is no widely accepted method on the market yet to really force companies to change their behavior and decarbonize. There are two strategies in the works on some scale: cap-and-trade, which is a market solution that allows companies to buy and sell pollution permits. California has the biggest cap-and-trade market, but some believe it’s not always an effective emissions-curbing solution if the price of the permit is too low.
The other is a carbon tax, a term that often sends chills through free market advocates. A carbon tax is simpler: It puts a price on the carbon dioxide that’s emitted. Governments around the world have set different prices based on how harmful they believe a metric ton of carbon is to society, a highly debatable measurement.
The Obama administration estimated the social cost of carbon should be $50 a ton by 2020. The Trump administration estimated something between $1 to $7 per ton. Some academics estimate the price should be between $50 and $100 per ton by 2030 to meet the Paris Agreement goals (a.k.a., avoid catastrophic climate change).
Cities like Minneapolis and San Diego have mostly transitioned away from coal. But they are significantly reliant on natural gas, which is still a fossil fuel, even though it emits less carbon emissions than coal.
“There isn’t a great pathway forward that can take up the scale to reduce carbon emissions from gas,” Havey said.
But what if, instead, you tied the franchise fee to carbon emissions, he wondered.
The fee price would then drop as carbon emissions drop, he said. It could be based on a simple calculation.
The social cost of carbon would serve as the baseline for environmental damage created by producing a ton of carbon emissions. The fee would be tied to whatever the emissions factor is for electricity and gas.
Think of it this way. The average home uses about 1,000 kilowatts per month, according to the U.S. Energy Information Administration. So if a utility produces a million units of energy and emits 500,000 metric tons of carbon emissions in the process at the social cost of $50 per ton, that equates to $25 million more in fees on the power company.
That would probably send utility companies screaming to state regulators. But it’s just a hypothesis, after all.
EPA Says ‘Nuh Uh’ to San Diego Company’s Anti-COVID Gas Badge
The Environmental Protection Agency told a San Diego-based company to stop selling a clip-on badge that supposedly spritzes a COVID-killing gas into the air.
EcoShield LLC sold its Eco AirDoctor Portable device out of drug stores in the states of Washington and New Jersey, according to an Environmental Protection Agency press release. The self-described “personal air sanitizer” sprays chlorine dioxide gas from a badge that customers are encouraged to wear on their backpacks or shirts.
It’s an “unregistered product making false disinfectant claims in violation of federal law,” the EPA says. The agency issued a stop sale, use or removal order, which is supposed to prevent the company from selling its product.
EcoShield LLC did not respond to a request for comment last week.
It’s not the first product to be torn from shelves, physical or otherwise. The EPA recently cracked down on Amazon and eBay for hosting a wide range of pesticides that claimed to protect people against the novel coronavirus.
Many of those products had little to no English language instruction and contained methylene chloride, commonly used for paint removal, which is banned for retail sale by the EPA because exposure can result in death.
The U.S. Food and Drug Administration warned the public in April against drinking chlorine dioxide or purchasing products that contain it as a measure to prevent or treat COVID-19. The FDA said at that time that it wasn’t aware of any scientific evidence supporting the safety or effectiveness of the solution.
Apparently, researchers in Colombia and Spain recruited a handful of COVID-19 patients back in April to study the oral ingestion of chlorine dioxide. The study never produced any published results, however.
In Other News
- The atmospheric chemist decried by surfers for sounding an alarm over COVID-19 spread at California beaches at the beginning of the pandemic chatted with Voice of San Diego’s CEO.
- COVID-19 pollution (thrown-away masks, gloves and take-out containers) are piling up on San Diego County beaches. (I myself have dished a few masks from the surf. Kook tip: Fasten your collected ocean garbage from the velcro of your surfboard leash.)
- Sempra Energy, the parent company of San Diego Gas and Electric, told investors this week that it wants to invest in zero-emissions hydrogen energy. It can be created cheapest using methane from natural gas, already a main company product. (Disclosure: Mitch Mitchell, SDG&E’s vice president for government affairs, sits on Voice of San Diego’s board of directors.)