Goal and Objective Setting

CENTRAL CHALLENGE: How to design a carbon pricing program that fits with Yale’s goals, mission and values, as this will be critical to the success of the program?

As a research and teaching institution, Yale’s first and foremost objective with the carbon charge was to experiment with market-based solutions to climate change and test how carbon pricing would work in practice, using its campus as a living laboratory. The University aimed to expand its role as a leader in sustainability by sharing the project’s findings widely with the academic community, as well as the private and public sectors, to inform climate and energy policies and actions. As Yale is not a company and not subject to competition law, the University can be transparent about its experience and fill a knowledge gap on internal carbon pricing.

Furthermore, Yale aimed to reduce campus energy use and GHG emissions through the creation of financial incentives to encourage behavior and decisions that align with the principles of a low-carbon economy. The University envisioned that a price on carbon would shift the focus from small actions (e.g., closing windows during winter, turning off lights) to ones that have more significant and long-term impacts (e.g., construction of new buildings, installation of solar panels).

Finally, Yale would like to the use the carbon charge to support education and research and integrate academics with operations, thereby improving operations and staff engagement while furthering the educational mission of the University.

The carbon charge pilot was designed to reflect these objectives. For example, since Yale’s primary objective was to establish the right incentives and not to raise revenues for other goals, including sustainability, one of the carbon pricing schemes tested was revenue-neutral. A desire to engage the broader Yale community and test different types of buildings and organizational structures, rather than to generate the largest possible emissions reductions, led to the selection of diverse buildings instead of the biggest energy users or those with the most low-hanging fruits in terms of energy efficiency.