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Contracts give San Francisco power to make a big climate impact

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Red and White Fleet’s Enhydra, scheduled for completion this summer, could be the first 700-passenger, lithium-ion battery hybrid vessel operating in the U.S. (Courtesy Red and White Fleet)


This month, San Francisco’s Red and White Fleet will launch the Enhydra. Equipped with a lithium-ion battery, it may be the first commercial vessel in the United States with the potential for zero emissions. Most boats leaving The City’s port for Sausalito, Tiburon and beyond run on variations of diesel. While the Enhydra will also run on a mix of battery-power and cleaner diesel when it launches, it can switch to zero emissions once charging infrastructure is in place.

Companies that continue to pollute City air and threaten the climate with dirty diesel boats should help pay for this infrastructure.

Cities and entities, like ports and airports, can use their contracting authority to benefit the climate, according to legal experts. Through voluntary agreements with businesses, they can incentivize reductions in emissions from carbon-rich fuels, such as coal, oil and gas, which are primarily responsible for climate change. Contracts can also require funds for infrastructure and finance necessary improvements to mitigate sea-level rise.

If San Francisco joins forces with Oakland and San Jose, the Bay Area could spearhead a major transition toward cleaner fuel among industries, including some of the biggest contributors to climate change in California. Climate contracts are an opportunity that leaders on their way to San Francisco for the Global Climate Action Summit should consider.

Public agencies regularly contract with businesses. Every time an aircraft lands at San Francisco International Airport (SFO), for example, it pays a landing fee. Similarly, commercial vessels pay berthing fees to dock at the San Francisco Port. These and other charges are incorporated into tenant leases that are fixed until renegotiated or adjusted periodically.

In the past, San Francisco has leveraged its contracts to advance City values. In the 1990s, for example, the Equal Benefits Ordinance required certain companies doing business with the City to offer the same benefits to unmarried employees in domestic partner relationships as they do to married couples. The ordinance resulted in policy changes by airlines and other large employers toward greater gay and lesbian equality.

Daniel Yost, an attorney involved in climate-change mitigation efforts, wondered if the same approach could be used in our battle for a livable climate.

“In the absence of meaningful climate action from Washington, DC, we have entered an era of progressive federalism where local and regional entities need to take actions that can be replicated across the country,” Yost told me. “This would provide a blue print for what works when a window opens to take action nationally.”

While waiting for former Vice President and climate activist Al Gore to take the stage at San Francisco’s Commonwealth Club, Yost and a friend brainstormed the idea of applying the Equal Benefits Ordinance model to help the climate.

During the renegotiation or contract adjustment process, San Francisco could insert a “Climate Clause” that establishes a greenhouse-gas fee. Like California’s cap-and-trade program, businesses contracting with the City would have a choice to lower their emissions or pay the fee. The money collected from such fees could finance efforts to respond to sea-level rise, fund climate solutions or potentially be used to reduce other fees impacting San Francisco residents.

Yost has run the idea past law professors and experts in aviation and maritime law. The response has been positive.

“An airport could implement a charge for carbon in its agreement with an airline,” Peter Kirsch, an attorney with more than 31 years practicing in the airport industry, told me. “The real pressure point is whether the airline would agree.”

Agencies would have to establish the right conditions to motivate businesses to agree. If San Francisco acted on its own, airlines might choose to opt-out of the new contract and increase service to and from nearby airports in Oakland and San Jose. But if government entities establish the same greenhouse-gas fees regionally, businesses would be more inclined to agree.

Incentivizing businesses to lower their impacts voluntarily will help the state meet its climate targets in all sectors, including those not covered by cap-and-trade.

In California, emissions from electric generation have plunged, but remained flat in other key industries and risen in the transportation industry. Public agencies need more tools to get industries to act. One economy class round-trip flight between SFO and John F. Kennedy Airport in New York City, for example, generates almost 20 percent of the greenhouse gases emitted by a typical car over a year.

Local rules with an international effect could also reduce industry opposition to federal environmental efforts.

“These contracts could include a sunset clause where they expire in the event a national carbon tax or cap-and-trade is passed,” Yost noted. “This would likely encourage business to lobby for a national solution rather than face a patchwork of local measures.”

While federal policies targeting emissions are necessary, they’re not going to happen during the current presidency. Leaders on their way to the Global Climate Action Summit understand the dire need to fill the gap left by Washington, DC. Businesses like Red and White Fleet are already investing in clean technology. Legal experts are brainstorming new approaches. Policymakers should build on this support and shift industries toward a cleaner future with opportunities like climate contracts.

Robyn Purchia is an environmental attorney, environmental blogger and environmental activist who hikes, gardens and tree hugs in her spare time. Check her out at robynpurchia.com.

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