On Sept. 26, 2017, Ward 3 Democrats hosted a panel discussion to explore three options to reduce climate change -- by financing the changes known to be effective. All three options are being explored at the DC Council, including a Green Finance Authority, a DC public bank, and a carbon tax, which are described in greater detail below.
Panelists included Ward 3 Councilmember Mary Cheh, DC Dept. of the Environment Director Tommy Wells, Natural Resources Defense Council's Sarah Dougherty, DC Public Banking Center's Larry Martin, and Chesapeake Climate Action Network's Mike Tidwell. The event was organized by Ward 3 Dems' Transportation and Environment Task Force and moderated by Ruth Caplan.
The panel discussion began with 10-minute presentations from each panelist. Some key points from each strategy are described below:
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The Green Finance Authority (GFA) would follow the model known as a "green banks," which are institutions that states and countries are using to finance projects to create green jobs, expand solar power, lower energy costs, reduce greenhouse gas emissions, and meet sustainability goals. Green banks are capitalized with limited public funds and attract private capital investment, which are then used to offer loans, leases, credit enhancements, and other financing services to close funding gaps for clean energy projects. A bill has been introduced in the DC Council to establish the GFA, and a hearing on the bill was held in July 2017. See additional info about the green bank concept and the legislation in the DC Council.
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The DC public bank would be a publicly owned, publicly accountable bank in D.C., which, in partnership with local financial institutions, delivers quality, sound financial services that will help create an environmentally sustainable DC; promote local jobs, sustainable local businesses and affordable housing in the city; and enhance the financial health of the city’s general fund. It would accept DC government's deposits -- $2 billion on average is deposited mainly in Wall Street banks with limited ties to the District -- and leverage these deposits to make quality loans into the local economy. It would operate as an independent entity governed by a professional board of directors and with public input through a community advisory board. A feasibility study to explore the DC public bank was funded for the fiscal year beginning Oct. 1, 2018. See additional information about the DC public bank.
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The carbon tax is intended to make carbon more expensive to consumers so they will make different choices about using energy and investing in cleaner technology. The proposed bill includes a $20 per ton carbon dioxide fee, which rises $10 per year plus inflation, to meet DC’s ambitious emissions reduction goals of 50% by 2032. As for the revenue, 75% would be returned to DC residents in the form of direct dividends, while 20% would go to reinvestment into green energy projects and a 5% property tax reduction for local businesses. The bill aims to appease the general population of DC while also assuaging fears from the business community that they would be at a disadvantage with a carbon tax imposed. See additional info about the carbon tax.
Tommy Wells provided additional context about DOEE's proposal to establish a green finance authority, which was based on a feasibility study completed for DOEE in 2016. He reiterated the strong support of the Mayor and DOEE to reduce the city's carbon footprint, provide a range of financing and regulatory support to reduce energy consumption, promote renewable energy, and create a cleaner environment for DC residents.
Councilmember Mary Cheh voiced her ongoing commitment to the environment as chairman of the DC Council's Committee on Transportation and the Environment. This committee held a hearing on the Green Finance Authority in July 2017 and expects to mark up the bill in late October 2017. She is working to establish a task force comprised of representatives of DC stakeholders to discuss the carbon tax and the proposed formula for rebating the tax to individuals, low-income individuals, and businesses. The outcome is intended to provide the framework for the final bill that would move through the DC Council. Mary Cheh noted that the feasibility study for the public bank was funded through the Committee on Business and Economic Development, and that a bill to establish a public bank may be considered by the full DC Council's Committee of the Whole, which is chaired by Council Chairman Phil Mendelson.
The panel event concluded with audience questions and responses from the panelist and closing statements from each panelist. There was a sense that all three approaches -- GFA, public bank, and carbon tax -- would make DC a national leader in reducing our carbon footprint.