The city of Berkeley, California, is trying to achieve the same thing by taxing gas consumption after its first-in-the-nation ban on natural gas hookups was struck down by a federal court.
The Large Building Fossil Fuel Emissions Tax, a ballot initiative that voters will consider in November, would apply to buildings that are at least 15,000 square feet. Amy Turner, director of the Urban Climate Law Initiative at Columbia University's Sabin Center for Climate Change Law, told SmartCitiesDive that 15,000 square feet is “probably the size of a small apartment building, around 10 to 15 apartments.”
According to SmartCitiesDive:
The amount of the tax assessed to each building owner is based on the amount of gas the building consumes and the estimated amount of methane that leaks from the natural gas system in fueling it. (Berkeley Environment and Climate Commissioner Daniel) Tahara said the tax calculation also takes into account the social cost of carbon and methane, which reflects the economic damage caused by every ton of greenhouse gas emitted into the atmosphere.
“(Natural gas) is causing damage to the world. They’re allowed to do that, but they should be compensated for that damage,” Tahara told Berkeleyside.
Bypassing the courts
Last year, the U.S. 9th Circuit Court of Appeals unanimously overturned a Berkeley City Council-passed law banning natural gas hookups to all new buildings in the city. The Biden administration, which opposes gas stoves, sided with the city, but to no avail.
Outraged, left-wing groups “felt the need to ‘protect’ Berkeley’s position as a leader on climate change,” Tahara told Berkeleyside, and immediately began looking for ways to get around the court’s decision. The Berkeley People’s Alliance approached Tahara, who had failed to pass a similar gas tax in San Francisco and was willing to give it another try in Berkeley.
Organizers gathered enough signatures to put the measure on the November ballot, and the City Council approved the proposal on July 30.
If a majority of voters approve the measure, it would go into effect on Jan. 1, with the first tax payments scheduled for February 2026.
Organizers estimate that the tax, which would apply to about 609 buildings, could bring in $23 million a year for the city. A City Council report on the initiative predicted the tax would generate $26.7 million in windfall revenue in its first year, “more than the city of Berkeley's total annual sales tax revenue and one-third of the city's annual property tax revenue,” according to The Daily Californian.
According to Berkeleyside:
According to the bill's language, 90% of the funds raised from a tax on owners of large buildings that use natural gas would go toward supporting the city's program to convert Berkeley buildings to cleaner energy sources, including installing heat pumps, induction cooktops, solar panels, battery storage and electric vehicle charging, for example. The remaining 10% would go to union-represented city positions and to cover the administrative costs of the city's decarbonization program, according to the bill's language.
Let's use kilowatts
Of course, progressive defenders of the tax rarely ask where building owners will get the money to pay it. Their attitude is summed up by Tahara's Berkeleyside comment that developers and property owners who don't want to pay the tax should just use electric instead of gas for their buildings. They never mind how much it would cost to convert existing buildings from gas to electric.
In fact, the bill would prohibit landlords from passing on the tax burden to tenants, a provision that would surely exacerbate the city's already severe housing shortage.
Goodbye Bagels
But not everyone who supports the goal of the measure is aware of its potential negative effects.
“I fully support the intent of this bill,” City Councilman Igor Tregub told The Daily Californian. “If it had been written in a way that balanced the need to address climate change with the everyday realities faced by small businesses, nonprofits, the performing arts community, and residential and commercial tenants, it could have led to significant investments in building electrification to decarbonize large buildings.”
The bill report noted that the tax could “exacerbate the problem that Berkeley's existing taxes are already significantly higher than the rest of the Bay Area,” potentially leading to higher prices for food and services and the decline of businesses.
Emily Winston, owner of Vojczyk Bagels in Berkeley, wrote a letter to the City Council expressing her concerns about the tax.
“The gas appliances I buy are built to last decades, and my goal in growing my business in Berkeley is to be here for decades to come,” she explained, “but if I'm being fined nearly half a million dollars a year, I have to seriously consider eviction.”
Other Opposition
Environmental group the David Brower Center wrote to Congress in a letter that the tax would impose “significant costs” on the center's 44,000-square-foot building, and the Berkeley Repertory Theater said in a statement, “While we support electrification, this well-intentioned ballot measure would be extremely harmful to our struggling organization if implemented immediately.” In other words, the planet would be saved, but at the expense of others.
“The city of Berkeley, whose natural gas ban was recently struck down by the 9th Circuit Court of Appeals, is now trying to tax facilities that use natural gas,” Steve Eberly of FTI Consulting wrote in a post on X. “But let's not forget that no one is trying to ban gas stoves.”
