New Study Says Switching to Renewable Energy Can Save the World Trillions, How’s Denver’s Climate Change Tax Working?

NEW STUDY SAYS SWITCHING TO RENEWABLE ENERGY CAN SAVE THE WORLD $50 TRILLION

Rapidly decarbonizing the global energy system is critical for addressing climate change, but concerns about costs have been a barrier to implementation. Most energy-economy models have historically underestimated deployment rates for renewable energy technologies and overestimated their costs.

These issues have driven calls for alternative approaches and more reliable technology forecasting methods. According to a recently released study by researchers Rupert Way, Matthew C. Ives, Penny Mealy and J. Doyne Farmer, compared to continuing with a fossil fuel-based system, a rapid green energy transition will likely result in overall net savings of many trillions of dollars—even without accounting for climate damages or co-benefits of climate policy. Possibly up to $12 Trillion. That’s just a couple T shy of the value of the American economy.

To get all nerdy, their research involves using an approach based on probabilistic cost forecasting methods that have been statistically validated by back-testing on more than 50 technologies. It generates probabilistic cost forecasts for solar energy, wind energy, batteries, and electrolyzers, conditional on deployment. It also uses these methods to estimate future energy system costs and explore how technology cost uncertainty propagates through to system costs in three different scenarios.

In laypeople’s terms, The report’s findings are based on looking at historic price data for renewables and fossil fuels and then mode ling how they’re likely to change in the future. The data for fossil fuels goes from 2020 back more than 100 years and shows that after accounting for inflation, and market volatility, the price hasn’t changed much.

Renewables have only been around for a few decades, so there’s less data. But in that time continual improvements in technology have meant the cost of solar and wind power have fallen rapidly, at a rate approaching 10% a year.

Why does the release of this groundbreaking report matter to us? Future energy system costs will be determined by a combination of technologies that produce, store, and distribute energy. Their costs and deployment will change with time due to innovation, competition, public policy, concerns about climate change, and other factors. Some of those other factors include paltering and gaslighting by fossil fuel multinational corporations.

DEEPER DIVE: The Report, Yahoo!, Carbon Herald

HOW’S DENVER’S CLIMATE CHANGE TAX WORKING?

Back in 2020, Denver residents voted to boost local sales tax by 0.25 percent to raise a projected $40 million annually for climate spending. In a nod to climate justice, half of those funds would go to lower-income communities.

The sales tax was born from a collaboration between the Denver Office of Climate Action, Sustainability and Resiliency, and a climate action task force made up of residents, community groups, environmentalists and industry experts.

In November of 2020, the measure for the tax got onto the ballot — and passed with around 64 percent of the vote. The increase took effect in January 2021. In just 19 months, that climate tax has raised $67 million. The funds are already supporting projects like green workforce development programs and the Montbello ride-share service.

In 2021, the Denver Department of Transportation and Infrastructure started the “Montbello Connector,” a free ride-share service which currently consists of an electric sedan; one hybrid vehicle; and a gas-powered, wheelchair-accessible van. The goal is to help residents move about the area at a lower financial and environmental cost.

Proponents say other cities and towns should look at what’s happening in Denver. The climate sales tax program, has helped circumvent the challenges that many municipalities face when financing climate action. Some of those challenges include  restrictive budgets amid multiple ongoing crises, difficulty attracting public and private investment, and opposition from carbon-intensive industries.

Jim Petterson, vice president of the Mountain West region at the Trust for Public Land, said, “In many cities, there just isn’t this big chunk of unspent money ready to go to help solve the issues around the changing climate.” So why does Denver’s climate tax matter to us? Aside from beign a successful template, it’s a way to guarantee funds are dedicated, walled off from the vagaries of annual appropriations and administration changes.

DEEPER DIVE: ClimateWire, Denver Government

AN ANALYSIS OF DENVER’S CLIMATE CHANGE TAX

So, really, where’s all OF DENVER’S CLIMATE change TAX money going? According to Grace Rink, executive director of the city’s climate office, some of the funds went to hiring people. It increased the city’s climate budget from $4 million to about $45 million and boosted the climate action office from 10 people to 40 people.

The rest of the money is going to projects that address issues like sustainable transportation, climate justice, renewable energy and building emissions. Among the most popular programs so far have been two types of consumer rebates.

The first are for electric bikes. All Denver residents are eligible to receive a $400 rebate to cut the cost of purchasing an e-bike. And there are $1,200 rebates available for residents who can submit proof of income at or below 80 percent of the area median. According to Rink, more than 3,000 people have bought e-bikes through the program since April.

The second rebate type includes front-loaded vouchers to help residents cut the cost of swapping out an old, gas-powered furnace for an air source heat pump. About 350 heat pumps have been financed in the first round of that program. Way more than financed by the local utility which has offered similar rebates for years with little consumer response.

According to an interview in ClimateWire, Rink said, “They interpreted the low uptake to mean there wasn’t the market for it. What our program showed is there is definitely a market for it, you just have to give people more of a discount and then they’ll buy.

$17 million will be used to boost renewable energy adoption via community solar projects, incentives for nonprofit organizations to adopt solar, battery storage and electric vehicle charging equipment, among other efforts. And $9.5 million will go to projects that target the planet-warming emissions released by buildings and homes, including by incentivizing the local building sector to decarbonize both existing and new properties.

And  $1.4 million went to the Montbello Connector to fund the purchase of the EV in the program’s fleet. According to Department of Transportation and Infrastructure spokesperson, Vanessa Lacayo, between October and mid-August, the micro transit system had provided more than 24,200 rides to more than 33,800 passengers.

DEEPER DIVE: ClimateWire, Denver Government