Letter Response
Dear Editor: We read Larry Edwards’ letter in Friday’s paper with great interest. Ice water dumped on rosy idealism is generally helpful! In this case, it provided a good opportunity to review and reevaluate the elements of the case that Citizen’s Climate Lobby is making for a carbon fee and dividend policy, and we hope the following offers some clarification and valid rebuttal.
CCL isn’t claiming that cutting CO2 emissions to 50 percent of 1990 levels over 20 years will solve the climate crisis. Its proposal is, however, one practical way to contribute to clean energy policies and climate change solutions. Carbon pricing is increasingly accepted as a practical way to ensure that fossil fuel industries bear more of the cost burden of climate change due to CO2, and to incentivize innovation and the proliferation of clean and renewable energy sources that will curb those emissions. CCL’s CF&D proposal, with its mechanism for compensating the end user via the dividend is garnering solid and increasing acceptance, as well, with positive outcomes supported by numerous studies. (See esp. REMI: The Economic, Climate, Fiscal, Power, and Demographic Impact of a National Fee-and-Dividend Carbon Tax; S. Nystrom, p. Luckow; 6.2014; ISER Report: Benefits and Costs to Rural Alaska Households from a Carbon Fee and Dividend program; Steve colt; 8.2015)
Mr. Edwards argues that a goal of reducing CO2 emissions is too little, too late, and that emissions will actually increase, because of lack of concern over increased costs among the wealthy and dependence on the dividend among the less affluent. Our reply is that the CF&D policy is but one goal among the many that must be pursued in order to maintain a liveable planet. We must also focus on other solutions, other incentives, and above all, continued education about the absolutely critical position the planet and the human race are in, right now. As of November of last year, only 55 percent of Americans stated that they believed climate change was human caused and only 19 percent of those were “very worried” about it. (Climate Change in the American Mind; Nov. 2016; Anthony Leiserowitz, et al.)
The PFD analogy doesn’t really apply here, either, in that the collected fees will be rebated without the establishment of a residual fund that needs to nurtured and maintained. The revenue-neutral structure of CF&D is an important part of the policy. It won’t “grow government,” and will require little if any increase in administrative personnel. Payments will be processed through existing systems in the U.S. Treasury. As noted above, models predict that a fee on carbon will spur innovation and development of clean fuels and renewable energy sources. As these become available and competitive in the market place, there will be fewer emissions to tax, with proportionately decreasing dividends. Energy costs will decrease for all, with consumers eventually coming out ahead regardless of the diminished and sunsetting dividend.
Finally, CCL’s success to date in advancing CF&D policy has largely to do with their credo of seeking common ground with opponents by establishing respectful and mutually beneficial relationships while focusing on viable and practical solutions. While CCL doesn’t agree with all the elements of the Climate Leadership Council, i.e. eliminating environmental regulations and liability (for long standing climate degradation), it does see a benefit in, once again, seeking common ground that will lead to positive outcomes for the future of the world.
The Pandora’s box of climate woes was opened a long time ago, it’s going to take all of us working together respectfully and at full speed to contain those woes and save the planet for future generations.
Barbara Bingham, Kay Kreiss
CCL members, Sitka Chapter
SEARHC Offer Concerns
Dear Editor: On May 30, SEARHC presented an offer to buy Sitka Community Hospital to our Assembly. This presentation painted a rosy picture of the future if the offer was accepted by SEARHC’s Aug. 1 deadline. As you might expect, the devil is in the details and the details matter a lot in this case. Here are some of the issues that raise concerns about this offer.
SEARHC offered $6.5 million for SCH. Is this a fair or full value for SCH? We don’t know. SEARHC could not explain how they determined this value (it is only about half of what SEARHC expects its net income to be this year). As I discussed in my letter to the editor on May 18, about the only way we have to help us identify a full value for SCH is if its sale is open to offers from all potentially interested parties. SEARHC clearly realizes that the Assembly’s adherence to an Aug. 1 deadline preempts a comprehensive bid process.
SEARHC’s offer requires us to retain certain financial liabilities, especially the net pension liability. In SCH’s 2016 audit the net pension liability totaled $15.7 million. This amount seems to be a moving target but this is the only indicator I now have of how much this liability could be. It is now covered by hospital income. If the city retains this liability after SCH is sold, how will it get paid?
SEARHC’s offer proposes to lease our hospital at the rate of $50,000 per month ($600,000 per year) for a period of five years. The first problem with this is the lease rate. Commercial office space in our city has leased for about $1.25 per square foot per month and SCH buildings total about 64,300 a square foot. At lease rates for commercial office space, SCH property should lease for about $80,000 per month or $960,000 per year. So, SEARHC’s lease offer is low but there is even a more important detail … leases of city property at rates of $750,000 per year or more need to be approved by a community vote. The low lease rate proposed by SEARHC is one way this offer preempts our voting on the sale.
What happens to our hospital after SEARHC’s five-year lease is over? We will be left holding this property, responsible for its maintenance, and without any identified means of receiving income from it. SCH paid $1.4 million for utilities in 2016 – will we lose even this? But here’s another detail. If SEARHC were to purchase rather than lease SCH property, the community would need to vote to approve the sale (sale of city property for $500,000 or more requires voter approval). SEARHC’s offer seems crafted to make sure we do not vote on this sale.
SEARHC says it will offer jobs to all SCH employees appropriately credentialed and in good standing. This sounds great but is it really realistic? There is much overlap in SEARHC and SCH staffs from food services to radiology. Which SCH employees will keep on doing what they have been doing? Will some of the jobs offered by SEARHC even be located in Sitka? Because of the many uncertainties in how this part of the SEARHC offer plays out, we should not just assume that career and family disruptions will not occur.
Another employment reality is that jobs will be jeopardized elsewhere in our community if SEARHC buys SCH. Obvious job losses would accompany the expected closing of a private pharmacy. But other businesses will be impacted as well – vendors, contractors, and various service providers for example. The cascading negative impacts to our community’s economy have so far been ignored in evaluating the SEARHC offer.
These are just some of the concerns that arise from even a cursory analysis of the SEARHC offer. Adequately evaluating this offer and understanding all of its impacts – on health care, city finances, businesses, and the many people it affects – is clearly needed and not possible by Aug. 1. The future outlined by SEARHC if their offer is accepted is not as rosy as they would have us believe.
Travis Hudson, Sitka
