Baseline Setting

CENTRAL CHALLENGE: How to set the baseline against which Yale’s planned and actual reductions can be measured?

An average of the previous three fiscal years (FY 2013-2015) was set as the baseline for all of the schemes. A rolling baseline approach was adopted – the baseline moves forward from one year to the next. For example, in 2017 the baseline will be 2014-2016, and in 2018 it will be 2015-2017. This approach was chosen due to two factors: it provides some degree of control over weather and annual programmatic changes that influence energy use; and it allows for long-term growth, not penalizing units for bringing in new faculty with energy intensive research equipment or adding more students. However, this decision washes out benefits every few years by resetting the baseline constantly. How to set an appropriate baseline remains a challenge for Yale.

Discussion Questions

• What are the pros and cons of fixed versus rolling baselines? An example of fixed baselines is if Yale decides to always compare units to 2005, year after year. Should Yale use a fixed baseline as a signal for its commitment to reducing emissions and discouraging growth? What effects do fixed baselines have on incentives? Do they allow units to reap the benefits of their emissions reductions over longer time horizons?