The Santa Fe Strategy: How Small Cities Can Act on Climate and Inequality

On face value, Santa Fe seems like an unusual choice to lead a green energy transition. It's not only small: it's an artists' colony in a coal state with some of the nation's highest per capita carbon emissions.
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This year, as global average temperatures reach unprecedented highs, arctic sea ice recedes to record lows, and carbon dioxide in the atmosphere exceeds 400 parts per million, Congress is--predictably--focused on cutting funding for environmental protection and dismantling the Clean Power Plan.

While there are some long-term prospects for federal-level action on climate, the near-term view from Capitol Hill is still bleak. For climate campaigners, environmental justice activists, and people generally concerned with the sustainability of human civilization, the writing is on the wall: Real action rests with states and localities.

Oregon, Hawaii, and Vermont have acted to eliminate the use of coal in power generation and, along with other forward-looking states, have set strong renewable energy mandates. Thanks to surprising alliances between libertarians and progressives, some deep red states like Georgia have made green policy choices, particularly on solar. Many of the world's largest cities from New York to London to Singapore are making tangible commitments to carbon neutrality. Through initiatives like the C40 Cities Climate Leadership Group and the Compact of Mayors, the major cities that account for more than 70 percent of global population are spearheading innovative and potentially transformative steps to decarbonize the global economy.

Still, some of the most promising ideas and efforts are actually coming from small cities.

Boulder, Colorado (population: 105,112) is working to municipalize its utility, currently owned by for-profit Xcel Energy, in order to transition to a renewable-focused model that returns a portion of profits to city or county authorities to supplement local budgets and support broader green initiatives.

In Santa Fe, New Mexico (population: 82,800), Mayor Javier Gonzales has proposed something unprecedented: making climate mitigation and resilience a central organizing principle of local policymaking. The philosophy underlying his proposal is that properly-designed green policies are a natural pathway to reducing poverty and inequality, insofar as they create new employment opportunities for people with different skills sets and levels of education (retrofitting buildings, installing renewables, and supporting research), they promote new cost-saving measures for low-income families (cheaper long-run power and improved efficiency), and they ultimately protect low-income people from shocks to which they'll be most vulnerable (economic dislocations and public health challenges from drought, heat, and broader climate chaos). While this thinking has been the general thrust of the green jobs movement for years, there's evidence that a small city like Santa Fe--with a clear strategy, sustained political will, and the requisite funding--can avoid the pitfalls encountered with federal efforts like the 2009 Recovery Act or big city initiatives that have had to contend with dozens of competing priorities and interest groups. This theory is about to be tested.

On March 30th, Gonzales introduced a measure in the City Council to create a steady-state fund for coordinated citywide action to address climate and inequality. Known as the Verde Fund, the proposal would be financed through a commitment of 5% of gross receipts taxes and a modest annual appropriation as well as potential additional funding leveraged from private sector partners. The plan has several pillars. In order to make green upgrades affordable for low-income city residents, the administration would work through the city-owned water utility and other agencies to enable rooftop solar and efficiency upgrades with low-interest loans and "on-bill financing"--a setup that allows ratepayers to use energy cost-savings to help pay for installations over time. The fund would help create carbon-neutral affordable housing (including net-zero micro-houses for low-income residents and the homeless) and help enable the use of new tools like community solar arrays that everyone, including renters, could buy into. The Verde Fund would invest in workforce training opportunities that aim to prepare young people for efficiency and installation work as well as microgrid-related projects based out of the area's community college and other facilities. The fund would enable the city to hire staff to leverage and coordinate private sector participation and advertise relevant new opportunities to homeowners and businesses. A major principle behind the Verde Fund is participatory budgeting: in time, the aim is to crowdsource the development of ideas and capacity for the green transition through a community-oriented competitive grant process overseen by jointly the Sustainable Santa Fe Commission and the Youth and Human Services Commission.

For Gonzales, this isn't a wild new policy vision but the allocation of resources to meet an existing unfunded mandate: The city has already formally committed to go carbon-neutral by 2040 but hadn't yet identified funding to meet the promise. Without funding, the mandate can't be met.

On economics generally, the Verde Fund is hardly uncharted territory. Conservative business thinkers like Harvard's Michael Porter have long contended that regions can use environmental policies like the fund as the basis of competitive advantage. Cities like Hamburg, Germany have energized their economies by building on regional and national climate strategies--in their case adapting existing industries like aircraft engine manufacturing to gain a footing in related green enterprises like manufacturing wind turbines.

Of course, for a city like Santa Fe, the question is scale: How can an arts town of less than 100,000 people make any contribution to mitigating global climate change? Backers of the Verde Fund have no illusions that the picture-perfect high-desert hideaway will single-handedly alter global emissions projections. Rather, the idea is to create a model that other places can replicate. In this regard, there's some evidence Santa Fe can be successful. The city helped create a national movement with its successful living wage ordnance back in 2004. While some initially derided the plan as delusional, the idea is now a fixture in presidential debates, national labor campaigns, and statehouses from New York to California. In the wake of recent droughts, Santa Fe has also been a model for cities in the region and beyond, having enacted a tiered water-pricing model that's radically reduced per capita water consumption.

On face value, Santa Fe seems like an unusual choice to lead a green energy transition. It's not only small: it's an artists' colony in a coal state with some of the nation's highest per capita carbon emissions. But Santa Fe's green moves--like its successful water and wage initiatives in earlier years-- underscore why small, forward-looking cities are uniquely suited to lead America's energy transition: they can innovate and implement more quickly and more completely than megacities.


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