Berkeley Proposed Tax on Natural Gas in Large Buildings

In November 2024, residents of Berkeley, CA, will vote on a ballot measure that proposes taxing the owners of buildings of 15,000 square feet or larger based on the amount of natural gas consumed each year. If passed, this would be the first tax in the country to target the use of a specific fuel source for buildings.

The tax would charge large building owners $2.96 for every 100 cubic feet or 100,000 BTUs of natural gas used, a value based on the social cost of carbon. City officials estimate that the tax would apply to over 600 buildings in Berkeley and generate $26.7 million during its first year, an amount larger than the city’s annual sales tax revenue. Of those funds, 90 percent would go toward retrofitting homes and buildings in the city with electric HVAC and appliances, and 10 percent would go toward city administrative costs.

Residents in low-income communities would be among the first to receive funding from the taxes to upgrade and electrify older buildings, and union labor would be prioritized for building retrofit work funded by the tax. If approved, the policy would take effect January 1, 2025, and expire at the end of 2050.