Presentation Slides - Association for the Advancement of

The Yale Community Carbon Fund; Reducing Emissions and Increasing
Economic Security in New Haven, CT
Paper presented at 2012 ASHE conference, Los Angeles.
Presenter – Annie Harper, YCCF Coordinator
The Yale Community Carbon Fund (YCCF) was set up in 2009, with the goal of
enabling Yale University and/or members of the Yale community to offset their
carbon emissions by investing in carbon reduction initiatives in New Haven – the
city where Yale is located. The initiatives would both reduce carbon emissions
and increase economic security through helping low income residents of the city
save money; social co-benefits have been central to the project from the start.
This paper explains what has actually happened with the Community Carbon
Fund, highlighting both some of the constraints faced and some ways we have
worked through those constraints. It concludes by raising some questions (and
offering some suggestions) about what the role of a university like Yale might be
in promoting sustainability that is local but off-campus.
The Yale Community Carbon Fund:
When the Carbon Fund was conceived one of Yale ’s strategies for reaching its
greenhouse gas emissions goal was to invest in carbon offsets. Based on that
strategy there was the potential that the university might use the Community
Carbon Fund as a mechanism through which to offset university level carbon
emissions. One model could have been for the university to budget a certain
amount of money each year to be given to the fund. This has not happened in
practice. The university has an ambitious carbon emissions reductions strategy,
but offsets are not included in that strategy.
Instead, a mechanism is available for anyone working at Yale (or in fact anyone
anywhere) to use an online calculator to calculate the carbon emissions they
produce through travel, their regular commute or university based events.
Based on the information entered into the calculator, a suggested donation
amount is calculated, which the user can then go ahead and donate online if they
choose. The donations are tax deductible. The YCCF does not claim to sell
verified offsets.
Donations to the YCCF are then spent on reducing carbon emissions locally. New
Haven has a higher than average number of low-income residents; almost 27%
of people live below the poverty line, compared to a US average of 14.3%. Not
only are there many poor people living in the city, they also live in an old and
poorly maintained housing stock. More than half of the homes in the city were
built before 1940, compared to a US average of only 14%. These pre-1940
buildings are not necessarily bad buildings – in fact many are extremely well
built – but they are likely to have been built without insulation, and years of
neglect mean that many buildings are extremely leaky. Nearly half of New Haven
residents spend 35% or more of their income on utilities and rent, evidence of
high-utility costs and low-income levels. Fuel assistance programs cost the
taxpayer dearly, but lack adequate funding to meet the scale of the need. Poor
people, most of whom are renters, have little resources or incentive to invest in
the energy efficiency of their homes, which has serious negative social and
environmental consequences. Residential carbon emissions are responsible for
up to 30% of Connecticut’s total emissions; older, leaky homes contribute
disproportionately to that share.
The goal of YCCF’s programs are thus to help New Haven’s low income residents
increase the energy efficiency of their homes, reducing carbon emissions and
helping them to save money on fuel bills, and to be more comfortable.
What has actually happened?
Fund raising:
The original idea that the university would commit a certain amount of money
each year did not materialise. As noted, above, instead the fund aimed to raise
money through the carbon calculator. Initial start-up funding was available,
including one very generous donation from a wealthy alumnus and some funding
from a private foundation. Since then the Carbon Fund has received additional
private foundation funding, but the long-term goal was for the Fund to be able to
generate enough internal funding from the calculator to be self-sustaining.
So how successful has the carbon calculator been? Money comes in through
various channels; from individual donations to departmental level donations. To
date, however, very few individual donations have been made. This is in part
because the YCCF has not been effectively marketed within the university. The
strategy of the YCCF was to first use the foundation funding to build up a solid
program of local offsets, then use the evidence of that successful spending to
promote the fund to potential donors within the university (see more detail
about the programming challenges below).
However, based on the limited experience with marketing the fund within the
university to date, and taking lessons from behavioural economics, it is clear that
simply telling people about the existence of the fund is unlikely to be effective.
Donations are most likely to be forthcoming if their request is embedded in a
process where it ‘makes sense’ to the donor to donate; where the suggestion to
donate is an ‘actionable’ donation. For example, donations are more likely to be
made as part of booking travel, or registering for an event.
Therefore, during the past year (2012) the YCCF has focused on building
partnerships at an organisational level, convincing those responsible for
organising travel or university based events to incorporate the Carbon Fund into
their event in some way. Those event organisers have done this in a variety of
ways; from providing a link to the YCCF on their website, to including a flat fee
donation as part of the registration process – either opt in or opt out – to simply
including a donation in the budget for the event.
For example, the Yale Travel website includes a link to the YCCF, and the 2012
Yale College reunion website also featured a link. A conference organised at the
Peabody Museum of Natural History offered participants the opportunity to
check a box as they registered on-line to make a donation of $20 to the YCCF, or
to follow a link to the YCCF website. The School of Management reunion went
one step further; the front page of the on-line registration process included a box
that needed to be un-checked if the participant chose not to donate a predetermined amount ($20 per adult, $10 per child). The School of Forestry
reunion chose to budget a fixed donation for the entire event into their overall
reunion budget; this fact was advertised on their reunion registration page, just
above the request for donations to the School’s annual fund. A number of other
university based events included donations to the fund in their budgets, based
on calculations made using the online calculator.
Based on the experience through the year, we have shown that depending on
individuals to follow a link is pretty unsuccessful. In fact, we raised almost no
money through this method. Asking people to opt-in (check a box) during
registration or booking an event had limited success (with approximately 1015% of people choosing to do this). Asking people to opt-out (un-check a box)
was the most successful of all when it comes to giving individual participants a
choice. Approximately 60% of School of Management reunion registrants
donated this way. Without more examples it is difficult to know whether the
different amounts raised are due to the particular population being targeted or
the method of asking for donations, but behavioural economics research has
shown that the way in which a request for a donation is framed has a large
impact on whether people give or not.
One problem with raising money through the above mechanisms, however well
the program is marketed, is that the flow of income will always be relatively
unpredictable. This makes planning for expenditure difficult, limiting the type of
program that can be developed. Donations that are made as part of a fixed
budget (such as the donation made by the Forestry School reunion) are of course
the most reliable and predictable source of funds, though a challenge that has
arisen here is that the university accounting department does not have a system
through which to classify an ‘offset’ expense. Ultimately, unless some funding is
made available at an institutional level (with some level of guaranteed annual
income) then programming will have to be somewhat ad hoc, limiting its
effectiveness. Currently the reality is that most of the YCCF’s funds come from
external private foundations, but that funding has been made on the basis that
the YCCF will eventually become self-sustaining and will not therefore be
available for the long term.
Obviously it only makes sense for people to donate money to the fund if that
money is being spent productively, meeting the goals of reducing carbon
emissions and increasing local economic security. So how does YCCF spend it’s
Initially funds were spent on weatherizing low-income homes, narrowing in on a
specific neighbourhood in New Haven. Homes were successfully weatherized,
but this program could not be continued because funds for weatherization were
already available through a residential energy efficiency program funded by the
Connecticut Energy Efficiency Fund, through the local utility, United Illuminating
(the Home Energy Solutions – HES - Program). The availability of these funds
meant that YCCF spending money on weatherization was not additional, an
important requirement for any offset expenditure. Additionality means that the
activity on which the money is spent must not have been possible without that
funding. (This is of course important for any expenditure on social programs; if
the activity would have happened anyway without the funding being provided,
then that funding is obviously not being put to its best use).
Programmable Thermostats
In order to avoid the additionality problem, the YCCF started a program that paid
for programmable thermostats to be installed in the homes of low-income New
Haven residents who signed up for the United Illuminating HES program,
through a web portal provided by the City of New Haven’s Office of
Sustainability. The thermostats were in addition to the normal package offered
as part of the HES program, which included weather stripping, caulking, energy
efficient light bulbs and low-flow showerheads and faucet filters. The City of
New Haven had an arrangement whereby any resident of the city who signed up
through their web portal would be serviced by a single audit company; this
meant that YCCF could work directly with this company, paying them separately
for the programmable thermostat installation.
The programmable thermostat program has now ended, in part because of
questions about how successful programmable thermostats really are in
reducing energy use (we are conducting an evaluation of the program now to try
to shed some light on that), and in part because the city ended its free audit
Residential Insulation
Currently the YCCF has funds to spend on low-income residential insulation, the
rationale being that installing attic or wall insulation in an un-insulated home, or
upgrading insulation, can lead to large energy savings at relatively low cost. The
decision to spend funds on insulation was made based on a comprehensive costbenefit analysis of a range of different interventions, looking both at emissions
reductions and potential money savings, and it was determined that insulation
offered the ‘best bang for the buck’.
However, as useful as insulation can be in terms of reducing emissions and
saving money, YCCF has found itself again with an additionality problem. The
HES Program has funds reserved for residential insulation for low-income
people. If it were the case that those funds were less than the HES program
could spend, and that there were many homes qualified for insulation but not
enough funds to pay for that insulation, then YCCF could simply have topped up
the existing HES insulation funds in order to reach out to more homes. However,
it turns out that while HES program has had excellent outreach in New Haven
with energy audits and weatherization, the program has struggled to reach out
with deeper measures, particularly insulation; insulating the homes of low
income people is a more difficult proposition than many imagine. There is, thus,
plenty of money available. Simply adding YCCF’s funds to the existing funds
would not do anything to increase the number of low-income homes being
insulated. Similarly, running a separate, parallel insulation program would likely
come up against the same barriers the HES program faces; it makes little sense to
have two, separate programs in the same town with the same goal.
In addition, insulation alone is never the best way to increase the overall energy
efficiency of a home, and it can be dangerous if done with the proper attention to
ventilation and air quality. Insulation should always be preceded by
comprehensive weatherization, to ensure that the home is not leaking from
windows, doors or other gaps, and by an inspection to assess for moisture,
mould or air quality issues such as gas and carbon monoxide. These services are
all carried out through the HES program, and it would have been irresponsible
for the YCCF insulation program to insulate homes that had not been through
that program.
For the reasons outlined above, working independently from HES was not
considered a good option. Instead, YCCF decided to work with United
Illuminating to come up with a program which complements rather than
competes with the HES program. The goal was to spend YCCF money on
insulating homes in such a way that the impact goes beyond those individual
homes, helping United Illuminating and indeed the Connecticut Energy Efficiency
Fund better understand how to successfully reach out to low income people with
‘deeper’ energy efficiency measures such as insulation.
Currently YCCF spends its funds as follows.
Outreach to low-income residents through neighbourhood associations
and non-profits.
Working directly with energy audit companies to re-connect with
residents who were audited but never took the next step of having their
property insulated, or having existing insulation upgraded.
For those residents to whom we reach out, helping them through the
various steps of the application, and to overcome any barriers that arise.
It is extremely common to find problems in homes that need to be
remediated before insulation can be installed, such as mould, old
electrical wiring or gas leakage problems. YCCF helps residents apply for
the programs that exist to fund remediation of these problems.
Once successful outreach has taken place, and any problems remediated,
YCCF pays for:
a. Installing insulation in low-income homes that are heated by oil (this
can be considered additional because although the low income
program is ‘fuel blind’, the local utility prefers to spend their money
on gas or electric heated homes as they can claim the energy savings
on these jobs, which they cannot do for homes heated by oil)
b. The 20% co-pay that is normally payable by landlords of low-income
tenants for insulation installation in their properties. There are ethical
concerns related to enabling possibly wealthy landlords to have their
properties insulated for free. However, as a short-term measure it was
considered worth it; it would increase the numbers of homes
insulated, and would in the process improve understanding about
working with this particular population. Low income people living in
rented accommodation are recognised as one of the most ‘difficult-toreach’ group given the perverse incentives in place (where landlords
don’t pay bills they have no incentive to invest to reduce those bills
but tenants have no incentive to make long term investments in the
property, but where landlords pay the bills they can’t control tenants’
behaviour regarding heating and cooling so can’t guarantee that they
will see financial savings from energy efficiency investments)
In addition to administering the project, the YCCF Coordinator also
contributes to state level policy discussions based on the experience of
the project.
YCCF also has a partnership with a local non-profit, whereby we pay them
to do outreach and oversee jobs through to completion. The goal of this
project is to insulate a small number of homes to the highest standard
possible, regardless of cost, including a final inspection by a HERS rater.
These case studies will provide important lessons learned about how
cost-effective different levels of insulation intervention are.
Lessons Learned.
Insulating low income homes
To date progress on actually insulating homes has been slow. Outreach has been
challenging and getting residents through the initial energy audit and
weatherization process has been slow. Of the homes that we have identified that
are in need of insulation upgrades, more than half have serious problems with
mould, electrical wiring or air quality that will need to be remediated before the
insulation can be installed. It has proven extremely difficult to persuade
landlords to follow through with the various steps they need to go through to
complete insulation installation in their homes.
The flip side of the problems we have experienced at is that YCCF has learned an
enormous amount about the barriers and constraints to low-income residential
energy efficiency! We have learned about consumer and program related
difficulties with initial outreach and follow through, difficulties in reaching out to
and working with landlords, and structural problems with buildings as outlined
above. We have also learned about the important role that vendors play in the
process (the companies that carry out the audits, weatherization and that install
the insulation) and the ways in which their perceptions of the profitability of
various types of work affects the process, as does their perceptions of low
income customers and the neighborhoods where they live.
One key lesson learned is that the current emphasis on behavioural change as
the major constraint to increased energy efficiency may be misplaced. Behavioral
change is important, and interventions designed to change behaviour are
necessary, but most of the constraints that YCCF has identified are structural.
That is, the factors preventing insulation from being installed relate primarily to
factors over which residents have no control, regardless of their behaviour,
including problems with the buildings in which they live that they either cannot
change because they are too poor, or cannot persuade the landlord to change.
Another constraint is misplaced profit incentives in energy efficiency programs,
where contractors do not believe that it is worth it for them financially to do the
work in low income homes.
YCCF has contributed to policy level debates on residential energy efficiency
based on its experiences, and will continue to work directly with the players
involved in the industry in Connecticut to improve outreach to low income
customers. We strongly believe that our work with our partners and at the
policy level is leading to and will continue to lead to an increased number of lowincome homes being insulated.
Universities and local carbon offsets
So what have we learned about universities and local carbon offsets? Should
other universities set up mechanisms whereby their students and employees can
purchase offsets?
According to standard guidelines on offsets schemes, the offsets produced by the
investments made must be measurable, verifiable and additional. They must also
be regulated such that the emissions reductions from a particular investment are
not ‘claimed’ more than once.
YCCF can measure the carbon emissions reductions associated with specific
insulation jobs, based on standard measures, and we can easily verify that the
work has been done, given that it is local. Unfortunately, however, much of the
work that the YCCF does with low-income residential insulation does not satisfy
any of those criteria. The incremental changes in programming that come about
through the many discussions that we have with our partners, and the long-term
impact of the policy discussions that we are involved in, are not readily
measurable. It would be impossible to quantify exactly what difference the YCCF
made as a range of other players are involved in these processes.
In addition, we have found that it is enormously costly to reach out to lowincome people with insulation. The cost of outreach and finalising applications is
very high. For every home that we successfully insulate, at least one or two
cannot be insulated because the landlord is not co-operative, or there are preexisting problems that need to be remediated first. In this case, the cost of trying
to ensure that the carbon emissions reductions also create a positive social cobenefit (low-income people saving money on their fuel bills) is extremely high.
Are people prepared to pay much, much more for an offset that includes this
social co-benefit than for an offset that does not have a social co-benefit?
As far as funding is concerned, for effective programming to be possible, a
relatively secure and predictable stream of income is required. This can either be
institutional funding through the university, or 2-3 year foundation funding.
However, are universities prepared to purchase offsets that are extremely
expensive per tonne of carbon emissions reduced, and that are very difficult to
measure? Are foundations prepared to purchase offsets on behalf of universities
for a long-term period?
One option is to go for offsets without worrying as much about the social cobenefits. There are potential investments that can produce measureable,
verifiable offsets, such as the excellent scheme developed by Duke University,
which pays for a hog farm to capture the methane produced by the hogs, and
turn it into energy for use on the farm.
Another option for a university based offsets scheme is to provide a mechanism
whereby students and employees can purchase offsets through one of the many
existing and established external vendors. The downside of this is that the
offsets, and any social co-benefits, will not be local, and the opportunity for
research and increasing knowledge, which is obviously the interest of any
university, will be lost.
Ultimately, if the goal of a university is to reach out to low-income people in its
local neighborhoods with interventions that both reduce carbon emissions and
improve life for those low-income people, the offsets model as it is currently
conceived is a difficult one to work with. It may be more appropriate to develop
programs that have those dual goals simply for the sake of creating a better and
more socially just world, and not to offset emissions produced by the university.
As centres of education and learning, any university that does this type of work
must ensure that the work they do is additional and strategic, that the local
people who are the targets of the work take the lead in program design,
implementation and evaluation, and that lessons learned are disseminated to
ensure an impact beyond the immediate area served.