While the rapid flare-out of last summer’s climate tax proposal by Denver’s City Council appeared to rise and fall—and fail—within a matter of weeks, an investigation by Western Wire has revealed Denver City Council worked with environmentalist groups and actively avoided reaching out to the city’s business community in its proposal to introduce a climate tax on electricity and natural gas in 2019.
Over the course of a multi-part series, Western Wire will offer a behind the scenes look at the failure of the climate tax proposal, including opposition from an unlikely coalition including Denver Mayor Michael Hancock, Denver City council members, the business community, and Colorado’s most prominent environmental groups, while examining the back-and-forth as deliberations reveal a tale of rushed process, activist influence, and a wish list of climate goals that far exceeded the plan for an excise tax on electricity and natural gas for industrial and commercial customers.
The Climate Conversation
An open records request filed by Western Wire with the City of Denver uncovered an extensive tranche of more than 1,000 emails and related documents stretching all the way back to March 2019 when a ballot initiative proposal was brought to Denver City Council President Jolon Clark by a host of anti-fossil fuel activists. Though the proposal in August 2019 included a climate tax on electricity and natural gas, the original ideas discussed included bans directed at natural gas usage in the city.
One question-and-answer document sent on August 19th from Tate Carpenter, an aide for City Council President Clark, provides a roadmap that reveals who had a seat at the table and helped initiate the climate tax dialogue, and the evolution of the debate by City officials that led to a much different result. The email was in response to a series of questions made earlier in the month by Councilwomen Kendra Black and Debbie Ortega.
“We took a stab at the questions submitted by CWs Black and Ortega. Some of these questions may come up tonight so we wanted to make sure that you had our responses,” Carpenter wrote to Clark and the proposal co-sponsors. The email included the document “K Black – carbon tax questions 8.16.19.docx.”
Resilient Denver, the group that eventually succeeded in placing a similar measure on the November 2020 ballot, originally sought out to persuade the City Council, via Clark, to take up their climate agenda.
Resilient Denver “approached Councilman Clark initially in March 2019,” according to the emailed document. The group “discussed putting forth a ballot initiative that included a ban on all natural gas installations, a phase out of natural gas heat by a specific date, and a phase out all gasoline powered vehicles by a certain date.”
Elsewhere the emailed document reveals the environmental and community groups wanted the City Council to require “all buildings to be net-zero by 2020,” and “wanted a new funding source that generated $100 million.”
Joining Resilient Denver in the discussion, the document indicates, was a broad group of community and environmental organizations, including the Sierra Club, The Alliance Center, Wind and Solar Denver, Climate Mobilization, Solar United Neighbors of Colorado, Natural Resources Defense Council, and environmental consultants and citizen activists.
According to City Council staff the group had considerable access and influence. “The group met with Councilman Clark three times and solicited feedback multiple times from over 130 community organizations…Drawing on the recommendations of the large group, the bill was crafted,” according to the aide.
“From the proposal to the final draft, there have been numerous changes and extensive input from stakeholders,” the document reveals, beginning with the initial contact between activists and City Council.
But the initial policy goals were far from achievable and would eventually change following the city’s municipal elections last spring and after four of the eventual sponsors took office on July 15th. “The goals were aspirational, but unrealistic.
Councilman Clark worked with the group to move forward with a bill that could be supported by Council that was feasible and satisfied the climate goals of Resilient Denver. In return Resilient Denver would drop their initiative,” the document continues.
Contention also existed around the timeline for action. The city council staff went to great lengths to contend that many attempts were made to reconcile the call by Resilient Denver and the Denver City Council’s much tighter timeline to place a measure on the November ballot, which required a decision by August 26, 2019, “the deadline for council-referred measures.” That includes defending a rather thin stakeholder process that excluded commercial and industrial owners explicitly.
“Due to the reduced timeline between the citizen initiative and the mayor’s small work group, there wasn’t sufficient time to bring commercial and industrial owners to the discussion,” the document concedes. The Mayor’s work group included members of the Mayor’s staff and those from Council, such as President Clark and Councilmember Paul Kashmann.
For Black, however, there was little apparent outreach or involvement outside of the working group. She pressed for details on who, exactly, had been included in the months-long run up to the unveiling of the proposed ballot language in the late summer.
“There was a stakeholder process that involved the Resilient Denver campaign, 130 community organizations that comprised of faith, labor, education, health businesses, environmental and conservation, immigrant and refugee groups, and many others.
A smaller work group was formed to represent the larger 130 community groups and met with the Mayor’s staff four times to work out the differences but were unable to reach consensus,” the document detailed.
This impasse led to Clark’s introduction of the bills that called for a climate tax.
But many did not agree with this approach, including former Democratic Gov. Bill Ritter, who has championed environmental causes through his work at the Center for the New Energy Economy at Colorado State University. He urged a more robust stakeholder process in his August 13th email.
“I write today to urge you to consider an alternative path other than immediately adopting the two climate bills now pending before you. While I am in complete agreement that we as a nation, state and city must take bold and aggressive actions to address our rapidly changing climate, I believe there is a better way to achieve the type of change that is necessary,” Ritter wrote to all councilmembers.
“I strongly encourage you to invest the time to work through a collaborative process to find common objectives with policy-makers, utilities, regulators, advocates, businesses, and most importantly, your constituents,” he added.
Process aside, several councilmembers wondered what the ultimate goal of the tax would be—to fundraise for the climate office, or to change consumer behavior.
This was Councilwoman Black’s question–“to raise revenue or to change behavior?”
“Both,” the document says. “The purpose is to create a new office of Office of Climate Action, Sustainability, and Resiliency (OCSR that focuses exclusively on and elevates the development, management, evaluation, and implementation of plans and programs related to climate mitigation, resiliency, and sustainability in Denver and to create a new funding source that elevates climate change as an ‘emergency’ level.
The current funding is minimal and does isn’t sufficient to meet our 80X50 goals nor the IPCC [Intergovernmental Panel on Climate Change] goals. The revenue will be spent to fund the work of the office,” it adds.
The proposed office would target workforce development, including job transitions from current energy sectors; residential climate action (electrification and battery storage, efficiency); commercial and industrial climate action (similar to residential with waste diversion and carbon emission reductions); transportation carbon pollution reduction; climate change adaptation; and staffing, according to the document.
The group’s hope is to increase energy costs to prompt consumers to switch fuels.
“Increasing the cost of carbon-based fuels will motivate companies to switch to clean energy. These include solar energy, wind energy, and hydro-powered sources. The work of the office includes incentives to fund residential, commercial and industrial energy efficiency upgrades, which will be critical in combating climate change,” the original version adds.
The answer was later revised in a subsequent version less than an hour later, emphasizing business incentives rather than punitive cost penalties.
“Incentivizing businesses to make energy efficient changes and/or enroll in a renewable electricity program such as WindSource, Renewable Connect, Solar Rewards, or equivalent programs that will result in lower energy bills will be a good motivation to ‘change behavior,’” the document now read.
At the City Council Finance committee meeting August 13th, Clark told fellow Councilmember Robin Kniech that the tax would provide a “carrot and a stick” for incentivizing behavior change but would only be the first step along the way to other policies.
That meeting included several heated exchanges between co-sponsors who backed the rushed tax measure as “bold” and “unprecedented” while other councilmembers protested the lack of stakeholder engagement, especially from those who would ultimately bear the burden of the tax, and also the lack of collegiality between councilmembers over the manner in which the bills were presented.
That theme of council decorum continues, as the council debated restricting public behavior, such as last fall’s “die-in” by Extinction Rebellion.
Seven City Council members, led by Council President Clark, were seeking to ask Denver voters last fall to approve the taxes on electricity and natural gas on commercial and industrial properties to raise more than $40 million per year to fund grants, EV charging stations, and other green policies. If passed, the new tax would have taken effect July 1, 2020.
A compromise brokered by Mayor Michael Hancock—who had threatened to veto the initiative—deferred the proposal, at least from the City Council’s perspective. Still, Denver voters will face similar proposition for a tax hike on electricity and natural gas for all customers, both residential and commercial, on this year’s ballot, as a separate ballot effort by the activist group Resilient Denver was certified in September 2019.
An August 27th email from NRDC’s Maddie Keating to Clark applauded the postponement and compromise.
“NRDC is pleased that City Council and the Mayor’s office reached a compromise on the carbon-tax initiative. I want to express my thanks and support for coming to an agreement to hold off on the ballot initiative until 2020, and taking the steps to establish an office dedicated to climate resilience with dedicated seed funding. I appreciate NRDC’s involvement in climate conversations thus far and look forward to an ongoing stakeholder engagement process,” she emailed.
