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By Andy Mannle | Thursday, 06 March 2008
You can buy carbon offsets on the internet for $5 a ton. Jared Blumenfeld, Director of San Francisco's Environment Department, calls this a con, and explains how he calculates the true cost of carbon to be $80 a ton.
In this interview about San Francisco’s 2008 Environmental Plan, he speaks about building a “green buzz” in San Francisco, novel prospects for powering the city on waves and tides; the opportunity in roof top wind, and two ways of tapping geothermal resources for comfort and power.
In Part II, Blumenfeld explains why he’s convincing Bay Area cities to buy plug-in hybrids from local chop shops; alternative transportation measure including the new Bike Share program; and the importance of Environmental Justice.
"We see this as our future, this is what we want to be known for." Jared Blumenfeld
When Mayor Gavin Newsom introduced his Climate Action plan in January he talked about setting up a local carbon fund for projects that would be in San Franciso. Have any projects been identified, and what sort of programs are those going to be?
Yes, Andy, the first big story here is that the voluntary carbon offset market is approaching ten billion dollars a year. It’s a huge voluntary market, there’s no real regulation, and people are buying offsets for the feel good factor, in far flung places that have no accountability, and which from a carbon perspective are a little bit sticky.
So what we’ve said is, well you know what, there’s a lot of local needs. Why don’t we create a fund, do a pilot program for a year, and require all city agencies that fly anywhere to buy their offsets through this fund, and then after a year open it up to San Francisco residents and businesses, and anyone else around the world who wanted to buy local offsets that they can actually see.
So what are these local offset projects?
We have three projects. One is low-income refrigeration, so going into the Housing Authority, taking out old refrigerators, putting in new ones, and realizing a huge carbon benefit from doing that. The second is getting used grease that normally wouldn’t have been collected, and turning that into biodiesel. And the third is low income solar panels. Working with this group Grid Alternatives that is analogous to Habitat for Humanity. They train volunteers and the volunteers put the solar panels on low income housing.
And it’ll all be about $80 a ton.
$80 a ton?
Yup. That’s the true cost of carbon, from our perspective.
Wow. I know you can buy carbon offsets at maybe $5 to $12 a ton, from CarbonFund, Terrapass, Native Energy…
They’re all a con.
So you feel those are totally illegitimate, or they’re just not living up to the standards they've set?
Basically, the strategic question when you look at an offset is this issue of Additionality. So when you’re buying a carbon offset you’re basically buying someone’s reduction in CO2 that they would not have made but for your financial contribution. That’s basically what a carbon offset is: you’re paying someone to reduce an amount of carbon that they wouldn’t normallly do.
So they’re two questions. One is a kind of regulatory additionality: what you were already going to do anyway you can’t claim. So if the Mayor says he’s planting 5000 trees, we can’t claim carbon on any of those, we can only do it on the 5001 tree because we were already going to do it anyway.
And the second one, that we’re really finding kind of fascinating is this question of financial additionality. If I come to you and you’re thinking of getting a refrigerator but don’t have the money to do it, so you’re saying ‘No, I’m not going to do it,” how much help would I have to give you financially before you buy the fridge?
So the issue for these big offset funds, a lot of them, you’re paying pennies on the dollar. Really pennies on the dollar. Whereas on solar panels we think it’s about 10%, you’ve got to put ten percent of the total installed cost. Over a thirty year cycle it ends up at about $85 dollars.
If you’re going to get someone to collect biodiesel, you can’t pay someone half a salary to go and collect it, and process it, you’ve got to actually pay for the whole thing, so that’s 100%. So you pay them $40 including their benefits and overhead and everything internalized, it takes them two hours to collect twenty gallons, that’s how you end up with a ton.
Editors Note: Because burning a gallon of fuel releases 100 pounds of carbon dioxide.
And finally, on refrigeration, you’ve got to pay about 60% of that energy efficiency, before anyone’s going to buy the deal.
We spent about four months looking at the numbers, and hired a consultant and really crunched it, it comes out to about $80. And the non-urban large scale projects are able to get that to come down, but they’re still a lot more than your average amount.
If we could work out how to do it for $30, we would, but we couldn’t work out, with bringing in all our non-profit partners, we couldn’t say it was a legitimate offset in the city for less than $80.
Obviously San Francisco is an expensive place to live and work. How can we attract the next generation of companies to stay in San Francisco, and avoid what I’ve heard described as the “Tracy Effect,” of cheaper suburban houses outside the city. What can we do to have smart growth inside the city?
We’re helping to oversee the sustainability of two huge new projects, one is on Treasure Island, that will have 6500 new units of housing, and the other is Hunter’s Point Shipyard and the Candlestick Point which will have around 8000 units of housing. And on Treasure Island I know, because we helped oversee it, 35% will be affordable, and some will be very low income, formerly homeless people that will be living there.
The number one thing we need to do is create denser, more affordable housing, and get more housing out there. I think we’re doing a pretty good job of moving in that direction, but not quickly enough. We need to make sure the housing we do build is green without adding energy and other burdens to environmental-justice impacted communities, where you just build more housing here, and the sewage still goes to the wastewater treatment plant in the poorest neighborhoods.
So I think we’re moving in the right direction. But as you pointed out, if our employees work here but live in Tracy, we’re just causing a problem somewhere else. So really it’s just having strict affordability requirements and putting lots of money into affordable housing. In San Francisco we don’t really have an option, it has to be dense because we can’t build out we can only really build up.
And how about keeping businesses in San Francisco? Or in the Bay Area at least.
Well I think we’re creating a buzz in SF and the Bay Area generally. We just got SunTec the largest manufacturer of solar panels in the world, based in China, to move to San Francisco. Wikipedia, which could move anywhere in the world said they want to move to San Francisco, so I think people want to be here.
And we want to lure them here so we just created a big payroll tax deduction for clean energy companies so they don’t pay any payroll taxes in San Francisco if they have sustainable energy as a main component of what they’re doing. We just hired someone to be our Clean Tech coordinator for the city whose sole job is to work on retention and attraction of new Clean Tech businesses.
We started something called the Business Council on Climate Change, the BC3, now about 60 companies really advocating strong federal and state and regional policies on climate change all based out of San Francisco.
I think we’ve got the biggest Green Business program in the nation, we go out and certify Green Businesses and the criteria are very strict.
People are realizing there’s a lot of greenwashing out there, and that if you can actually be green and really be a strong policy advocate as a business you can do better, so I think we’re showing that there’s a good business model out there for green companies to gather into San Francisco.
We see this as our future, this is what we want to be known for, and really once you start getting a critical mass of businesses there’s a buzz.
You mentioned SunTec moving to San Francisco, and obviously a lot of people are interested in developing solar power. According to your website it looks like we’re at about 5% of our 2010 goal for solar. Are we going to make that goal? Are we adding enough solar?
In the proposal you can get $5000 or $10,000 back from the city through a local incentive. We’re basically saying, we need to remain competitive in San Francisco, and we want to reach our target, and the only way to do that is to give homeowners and business a financial incentive to put solar on their roof.