Yale’s carbon-pricing program came about as a collaborative effort between its students and professors. The carbon tax is the brainchild of Yale economics professor William Nordhaus ’63, who has advocated for taxation as an effective climate remedy since the 1970s.

On Dec. 10, Nordhaus collected his prize: a Nobel diploma, a medal and 4.5 million Swedish krona, equivalent to about $500,000. Months earlier, Nordhaus learned he’d won the Nobel Prize in economics while still in bed. “I slept through it,” he said, at a press conference.

He was honored for calculating the economic damage inflicted by a single ton of emitted carbon — a model that translates into a succinct policy, backed by scientists and economists alike: Tax what you don’t want.

“Nordhaus’ prize gives added impetus to the idea of carbon charges as the right kind of policy to drive not just attention to climate change, but also the innovation required to spur a clean energy future,” said Daniel Esty, a professor of environmental law at Yale.

But since the mid-1990s, when Nordhaus’ solution first gained political attention, no major world government has succeeded in imposing the kind of carbon tax for which Nordhaus and his colleagues advocate. In Washington state, a referendum to create a first-in-the-nation carbon tax was easily defeated last November. Another plan, co-authored by former Republican Secretaries of State James Baker and George Shultz, hopes to make carbon pricing more attractive by returning all proceeds from a $40 per ton carbon tax to the American people on an equal and monthly basis via dividend checks. While the plan has received bipartisan support, according to an October poll by the Yale Program on Climate Change Communication, its passage in Congress looks unlikely under the current administration. In theory, a carbon tax is a more efficient way to reduce carbon emissions than regulation, but at the ballot, voters struggle to justify policies that raise their current cost of living in return for a more livable planet in the distant future.

This inaction has come at a high price. On the same day in October when the Royal Swedish Academy of Sciences announced Nordhaus’ Nobel, the Intergovernmental Panel on Climate Change released a landmark report, produced by 91 scientists, including Yale environmental studies professor Karen Seto. The report predicts that 1.5 degrees Celsius of warming above pre-industrial levels could come as early as 2040, causing food shortages, flooding and the displacement of tens of millions of people. At the same time, America’s emissions show no sign of slowing. In fact, this year, they rose by 3.4 percent, the largest leap since 2010, according to the Rhodium Group. To curb emissions, the IPCC report recommends swift action through a global carbon tax. Nordhaus estimates a critical two or three–year period to successfully implement a global carbon-pricing program while avoiding the estimated $54 trillion–worth of damage expected by 2040.

On campus, things are looking more hopeful. In 2014, professors Nordhaus and Esty hosted an outdoor “teach out” on Cross Campus to discuss solutions to climate change in celebration of Earth Day. Inspired by the discussion, a group of graduate and undergraduate students drafted and submitted a letter to the Yale administration suggesting that the University adopt a carbon-pricing program. President Peter Salovey appointed a committee to investigate the feasibility of the program, and at their recommendation, Yale launched a financially impactful pilot carbon charge program in 2015 — the first university in the world to do so.

The pilot program initially included 20 Yale buildings and tested four different schemes. Collectively, the pilot units reduced emissions by 4.9 percent below the baseline, more than the control group’s 1.4 percent reduction. In 2017, Yale expanded the carbon-pricing scheme to 259 campus buildings that together account for about 70 percent of the institution’s emissions. In January 2018, Yale launched the Carbon Charge in its residential colleges. Each participating building receives a monthly report detailing its electricity, chilled water, natural gas and steam consumption. These emissions are reported in metric tons of carbon dioxide equivalent and made publicly accessible on the Energy Explorer — an interactive digital map created and maintained by Yale Facilities.

Yale’s revenue-neutral carbon charge is essentially a redistribution of funds between the University’s planning units, based on their emissions reduction as compared to the campus average. Like business units in a corporation, planning units are the University’s top-level administrative designations, including its graduate and professional schools, museums and libraries, senior administrative offices, and operational departments. Under the Carbon Charge, each planning unit has two budget lines in its monthly report: a charge line for its buildings’ carbon charges, priced at $40 per MTCDE emitted, and a return line, which gives a percentage of the University-wide carbon charge to each planning unit. If a building outperforms the campus average in emissions reductions, its return exceeds its charge, netting funds for its planning unit. If a building underperforms the campus average, its charge exceeds its return, and the planning unit contributes the net funds to the carbon charge.

Every Yale College building — from William L. Harkness Hall and Linsly-Chittenden Hall to the 14 residential colleges — falls under the designation of one planning unit: the Faculty of Arts and Sciences, headed by Dean Tamar Gendler. While Yale College, headed by Dean Marvin Chun, is organizationally independent from the Faculty of Arts and Sciences, all of its buildings roll up to the FAS financially. For example, if Pierson College students turned off their lights, turned down their heat and shortened their showers, thereby reducing Pierson’s emissions, Deans Gendler and Chun could choose to financially reward the College. If Pierson was particularly wasteful one month, the FAS pays its charge. Back in the 2016 pilot program, Pierson College received a $3,000 rebate for their energy reduction, which it plans to invest in automatic water bottle refill stations.

“For the Carbon Charge to be effective at the residential college level, we needed to get students involved,” said Tanya Wiedeking, the Carbon Charge Liaison for the Council of Heads of Colleges and the building manager of Pierson College.

“Students need to be at the center of the Carbon Charge in its design, implementation and the evaluation of lessons learned, especially as end-users of energy at Yale,” said Ryan Laemel ’14, a former project manager of the Yale Carbon Charge, who urges students to take ownership of the program in order to maximize its efficacy.

Residential colleges present a unique set of challenges for the Carbon Charge program. As with any campus building, its students, faculty and staff do not personally pay energy bills. An optimal pricing system would incentivize every member of the Yale community, but under this model, responsibility falls primarily on building managers and heads of planning units. As residential buildings, the colleges also face the challenge of full-time occupancy and personalized climate zones. Tran’s suite in Berkeley might be turning down their heat and limiting their showers, but their efforts could be completely offset by their neighbors across the hall. On the other hand, since energy use in the colleges is highly dependent on occupant behavior, they present a major opportunity for collective student impact.

Sarah Brandt ’17 wrote her senior thesis on the environmental attitudes of Yale students and faculty under the Carbon Charge pilot program. She identified concern for the environment as the primary driver of emissions-reducing behavioral change, but her research concluded that people at Yale would be willing to further reduce their consumption with decentralized economic incentives, clear feedback on energy use and more collaboration. With these ideas in mind, the Carbon Charge Working Group — a student group spearheaded by Wiedeking — is spreading awareness and rewarding good energy habits within the residential colleges.

“Most of our work is figuring out how to get the word out to students,” said Trini Kechkian, a Pierson sophomore in the CCWG. “Because when students are aware and participating in an internal carbon-pricing program, it gives them some sense of agency in a problem where we most often feel helpless.”