Harvard Should Establish an Internal Carbon Tax

There is something deeply admirable to be said about man’s ability to exercise self-control. Whether it be following internally-imposed guidelines about dieting, limiting phone usage, or identifying time to allocate to leisure each week, recognizing an area for improvement and then taking action to implement that vision is one of the most unique skills in the human toolbox.

Indeed, the capacity for internal regulation offers a solution that is two-sided. Exercising self-restraint deters an actor from doing something that works against his or her goals, but, simultaneously, and perhaps even more powerfully, also encourages the furthering of said goals. For example, holding yourself accountable to a commitment to lose a few pounds might deter you from eating a third cookie at lunch just as much as it might inspire you to go for a run. The magic is that it disincentivizes the “wrong” choice as much as it incentivizes the “right” one.

When it comes to climate change, Harvard has not characteristically shied away from responsibility. Just this year, the University announced ambitious commitments to achieve fossil-fuel neutrality by 2026 and withdraw from all fossil-fuel sources by 2050. However, even with these goals in place, there is room to think further about how to execute our commitments most fruitfully. The times have never been more urgent, and with all that is at stake, we must seek unprecedented, internally-driven climate leadership from the University’s administration, particularly as external regulating bodies (like the U.S government) are falling miserably flat.

What exactly might this self-driven leadership entail?

It’s common knowledge that an item that costs more is less appealing to a rational actor than a substitute that costs less. Boiled down to basics, this is the ultimate fact that has long doomed dialogue about the merits of obtaining energy from renewable vs. fossil-fuel sources. Despite ever-falling costs, renewable sources are not yet less expensive than their non-renewable competitors.

But what if there were a way to intervene without any further technological innovation to reverse this equation?

We are in luck, and the answer is neither new nor complex. Since the 1970s, economists have advocated for a simple solution: to raise the price of non-renewables by taxing the carbon contained within them. In this way, non-carbon based alternatives become, comparatively, the lesser expense. Meanwhile, the revenue generated by the carbon tax can be used by the regulating body for a limitless list of causes, including investment in renewable energy technologies.

Since its innovation, carbon pricing in a variety of structures has been implemented around the world. Indeed, it is easy to sing the praises of bodies such as the EU that, as a result of their carbon price, are on trajectory to cut 2005 emission levels in half by 2030, all while generating €15.8 billion of revenue.

However, despite this promising evidence, the prospect of a carbon tax has become increasingly politically divisive at home. Most prevalent among conservative thinkers, opposition seems to be more directly related to generic resistance to any form of taxation rather than to concern about what’s best for the nation’s people and economy.

But, while our government stammers, the crisis is worsening. This is why we must call upon Harvard to act. It is high time that the University places a price on carbon. And internal regulation, a manifestation of self-control, is just the tactic to tackle it.

Enter the internal carbon tax. In this mechanism, an institution imposes a regulation — for each ton of carbon emitted, a predetermined fee is charged and then redistributed to a separate revenue stream — to which it will hold itself accountable. In other words, for each ton of carbon used, whether for heating or for travel, the levied fee is taken from the involved department and redirected to a carbon tax “piggy-bank.” Here, just as in the example of how a fitness goal discourages eating too much dessert in the same way as it inspires going for a run, we see two immediate benefits.

Firstly, the rising costs of the taxed fossil-fuels immediately render them less economically appealing, and consequently, discourage their use. Secondly, and, again, perhaps more importantly, the carbon tax “piggy-bank” creates funds available for environmental initiatives, technological development, and offsetting any inequities that might occur resultantly.

Internal carbon pricing is catching on, as both Microsoft and Yale University, among other prominent institutions, are pioneering its usage. Again, we are reminded of the power of self-control.

An internal carbon tax does not remove money from Harvard’s hands — rather, it re-allocates it in a socially-responsible manner that disincentivizes the “wrong choice” — the use of fossil fuels — and incentivizes the “right” one — investing in research and technology, which ultimately are the only hope we have for preserving our home as we know it.

Clea F. Schumer ’20 is an Environmental Science and Public Policy concentrator in Currier House.