City Council Advances Climate Tax as Hancock, Business Groups Announce Opposition

City Council Advances Climate Tax as Hancock, Business Groups Announce Opposition
Less than a month after a new-look Denver City Council was sworn in, clashes between Mayor Michael Hancock and the more progressive newcomers elected alongside him earlier this year are becoming a more regular occurrence — with the latest fight erupting over how the city's efforts to fight climate change should be funded.

A proposal to tax commercial and industrial energy use to better fund climate programs narrowly advanced out of city council's Finance and Governance Committee today, August 13, even as Hancock, several councilmembers and a coalition of business groups announced their opposition. The 4-3 vote, which included yes votes from newly elected Councilwoman Candi CdeBaca and Councilman Chris Hinds, sent the bill to the full council, where it will be heard next week.

Proposed by Denver City Council President Jolon Clark, the bill would refer a ballot measure to Denver voters later this year, asking them to approve a small tax on electricity and natural gas consumption by commercial and industrial users, raising $43 million to fund the city's climate efforts. A companion bill to create a new Office of Climate Action, Sustainability and Resiliency advanced with six yes votes and one abstention.

"Scientists have told us that we have to take urgent and unprecedented action," Clark told Westword after Tuesday's committee vote. "That's not easy, and it's different than the way we have tackled a lot of other issues, when we have time. We don't have time on this issue. We literally don't have time."

In a landmark report last year, top scientists at the U.N.'s Intergovernmental Panel on Climate Change warned policymakers that the world must make "rapid, far-reaching and unprecedented changes in all aspects of society" to avert the worst impacts of climate change, recommending a 45 percent cut in global greenhouse gas emissions by 2030. Hancock's administration committed to a series of emissions goals roughly in line with the IPCC's recommendations in a Climate Action Plan released last July — but the city is set to fall short of that plan's first major target, a 15 percent reduction by 2020. Denver's overall emissions have remained flat for nearly a decade, with modest gains in the electricity sector offset by continued population growth and rising transportation emissions.

Climate activists from groups like Extinction Rebellion and Climate Mobilization have demonstrated at city council meetings throughout the summer, demanding that the city declare a "climate emergency" and ramp up its efforts to reduce carbon emissions. But despite the city's lack of progress on decarbonization, Hancock urged members to pump the brakes on the climate tax measure in a letter sent to city council on Tuesday.

“These proposals have not benefited from a true community and stakeholder engagement process, from a public and transparent analysis of costs and potential unintended consequences, and from a meaningful effort to build a coalition of supporters,” Hancock wrote in the letter. The mayor is "in the process of immediately creating" a new office focused on climate change, the letter noted, and "anticipates" appropriating more funds to climate action in his next budget proposal, which is due next month.

While Clark's proposal has the support of at least seven councilmembers, giving it enough votes to pass, Hancock has the power to veto the measure and keep it off the 2019 ballot. A spokesperson for Hancock declined to comment directly on the possibility of a veto; Clark says that he's willing to work with the mayor to find a solution that would allow the measure to go to voters this year.

"My door is always open," says Clark. "I'm hoping to continue to have conversations with him. Certainly I'm open to any way that I can make this better or more palatable."

Hancock's opposition follows concerns expressed by a coalition of business groups in a letter sent to city council on Monday. The letter, signed by 27 businesses and trade groups — including Xcel Energy, which would likely be responsible for collecting the energy tax if it were approved — said that Clark's proposal could lead to "significant unknown impacts, as well as questions and concerns that would benefit from a thorough analysis and discussion."

Clark's proposal is similar to a citizen-led initiative, backed by the group Resilient Denver, that would tax both businesses and residential customers to fund a new climate-focused office. Resilient Denver organizers have met with both Clark and representatives of the mayor's office throughout the year, and are supportive of the proposal advanced by city council on Tuesday.

“We’re very grateful for the seven sponsors who are willing to take action on climate change now,” says Ean Tafoya, a Resilient Denver organizer. “We believe the benefits for the community are immense. To me, any attempt to slow it down is just not in good faith.”

Resilient Denver failed to gather enough signatures in time to qualify for this year's ballot, but can still submit additional signatures by November 12 in order to put the measure before voters in 2020 — and with the threat of a possible veto of Clark's proposal looming, Tafoya says that the group is moving forward with its initiative.

"We are 100 percent committed to finishing our process," he says. "We have thousands of [additional signatures], and will be submitting them probably later this week."
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Chase Woodruff is a staff writer at Westword interested in climate change, the environment and money in politics.
Contact: Chase Woodruff