Would A Campus Carbon Tax Work Better Than Divestment?

Divestment is more about symbolism, but a carbon tax would help university campuses make concrete changes.

Would A Campus Carbon Tax Work Better Than Divestment?
[Image: Smog via Shutterstock]

Stanford University’s recent decision to stop investing in coal companies was a big win for the fossil fuel divestment movement. Champions of divestment called it “groundbreaking.” And, indeed, it could lead to more universities making similar decisions.


Will it do any good though? Critics argue that divestment achieves only symbolic ends, because companies find funding elsewhere. More to the point, they say divestment fails to actually disentangle universities from fossil fuels, because of how deeply embedded these energy sources are in our lives. Here is how Stanford’s very own Frank Wolak puts it in a recent Los Angeles Times op/ed:

Those who claim that Stanford is not dependent on coal or coal-derived products are flat wrong. Coal is a major component in the production of the steel that goes into all the buildings sprouting up around the campus and the cement used to make the concrete that goes into them. Many other items purchased by Stanford are produced using electricity generated from coal either in the United States or, more likely, in China, where more than 80% of electricity comes from coal.

To be clear, Wolak isn’t pooh-poohing divestment because he thinks climate change is unimportant. He runs Stanford’s Program on Energy and Sustainable Development, and cares about the issues. He just doesn’t think it useful or practical. So, he proposes an alternative idea instead: a university-wide carbon tax.

Here he is again:

Here’s how it would work. Stanford (or your alma mater) would set a dollar-per-ton tax on all greenhouse-gas-emitting activities on campus. Students would pay an extra amount on their term bills for their emissions. Faculty and staff would have the tax taken out of their paychecks. Electricity use, consumption of campus transportation services, gas-emitting activities in research laboratories and buildings, and greenhouse gas emissions associated with waste disposal would all be assessed.

As Wolak points out, carbon taxes have wide support on the left and right (not to mention among economists, who favor taxes because they take on problems directly). Wolak’s tax would be “revenue neutral”–meaning all proceeds would be funneled back to students and professors in the shape of lower tuition and higher salaries. That way, you could actually influence decision-making, but without harming anyone overall, he says.

Practically speaking, the toughest issue would probably be in organizing the tax-raising system. Everything sold on campus would need to be assessed for carbon and levied accordingly–no easy task. But Wolak argues Stanford is well-placed to design a scheme, and that its experience could help other universities, and perhaps the country as well.

“The rich experience of the many who participate could subsequently be put to work helping to implement effective climate policies in other settings, including Washington,” he says.

About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.