UPDATE [January 25, 2019]: Oregon lawmakers did not pass the Clean Energy Jobs bill in 2018, but when the Legislature adjourned last March, House Speaker Tina Kotek and Senate President Peter Courtney established a Joint Committee on Carbon Reduction to refine the policy over the remainder of 2018. In doing so, both legislative leaders vowed to make passage of the Clean Energy Jobs bill a top priority in 2019. The committee’s work is now complete, and the bill’s prospects are promising. We anticipate that the primary components will be similar to what is described in the blog below. UCS is working hard this year to pass a strong bill that will quickly reduce global warming pollution across the state while investing in clean energy and protecting communities from the impacts of climate change.
With the Trump administration undermining federal action to address climate change, states like Oregon are stepping up to protect the planet for future generations.
For example, after President Trump announced that he will withdraw the U.S. from the Paris Climate Agreement, Oregon joined the U.S. Climate Alliance, a bipartisan coalition of states committed to the goal of reducing global warming pollution consistent with the Agreement. In joining the Alliance last year, Governor Kate Brown said, “it is our moral obligation to fulfill the goals of the Paris Agreement. Oregon will continue to make meaningful strides, with the rest of the world, to ensure our communities and economies adapt to meet the challenge of climate change.”
Fortunately, Oregon lawmakers and Governor Brown have the opportunity this year to take a huge step in Oregon’s fight against climate change. Last year legislators debated the Clean Energy Jobs bill, which would establish a “cap-and-invest” program that cuts global warming emissions by requiring polluters to pay for pollution, and then use the proceeds to invest in clean energy solutions. A cap-and-invest program would be a major new tool in Oregon’s climate-change-fighting toolbox, and the Clean Energy Jobs bill is now poised to be the single-biggest issue before Oregon lawmakers in 2018.
Pricing Pollution and Funding Solutions
Oregon is already experiencing the impacts of climate change, from higher temperatures, a warmer and more acidic ocean, increased wildfire activity, and reduced snowpack. Putting a price on global warming emissions through a cap-and-invest program helps integrate the risks of climate change into the cost of doing business because it forces the costs of climate impacts and the value of low-carbon technologies to be better reflected in decisions companies make about what to produce and how to produce it, and consumers make about what to buy. This leads to fewer emissions that heat our atmosphere.
In addition, because major polluters are required to pay for their pollution, a cap-and-invest policy also generates significant revenue. These proceeds can be used to fund investments that help reduce climate change emissions, like making renewable energy more affordable, improving the energy efficiency of homes and other buildings, increasing transportation options, and expanding clean energy job training programs.
The Clean Energy Jobs bill is modeled on similar programs in other states and Canadian provinces, which have seen impressive success in making clean energy investments. For example, through the end of 2017, California’s legislature appropriated more than $4.7 billion in proceeds from the sale of cap-and-invest pollution permits for investments in a range of useful programs, from supporting rooftop solar panels to water efficiency projects. The Regional Greenhouse Gas Initiative, a cap-and-invest program to reduce carbon dioxide emissions from power plants in nine Northeastern and Mid-Atlantic states, has invested heavily in energy efficiency programs, helping 141,000 households and 5,700 businesses with investments in 2015 that will return $1.3 billion in energy bill savings. Oregon has the chance to build on these successful examples to create a program that reduces pollution and meets the unique needs of Oregonians, including its rural residents.
A Cap-and-Invest Program Will Complement Other Oregon Policies
While Oregon has already taken considerable steps to reign in global warming pollution from electricity production and cars and trucks, the state is not yet on track to meet its pollution reduction goals. Passing a cap-and-invest program is the single-biggest step state lawmakers can take to get Oregon on track.
Fortunately, a cap-and-invest program would nicely complement existing policies in Oregon to reduce global warming pollution, such as the Clean Fuels Program (CFP) and Renewable Portfolio Standard (RPS). The CFP requires a 10 percent reduction in the carbon intensity of transportation fuels sold in Oregon by 2025 (compared to a 2015 baseline). The program creates a dependable market for cleaner fuels, which facilitates steady investment into research, development, and deployment of low-carbon fuels that are necessary to decarbonize the transportation sector in coming decades.
Meanwhile, the RPS requires that by 2050 half of electricity sold in Oregon is supplied by renewable sources, like wind and solar. Similar to the CFP, this policy creates a dependable market for renewable technologies, which is critical for facilitating investment in clean energy solutions necessary to decarbonize the electricity sector.
A cap-and-invest program would complement these policies by providing greater assurance that Oregon will meet its targets for reducing global warming emissions statewide. That is because the central design feature of a cap-and-invest program is a limited pool of pollution permits (i.e., the “cap”), which shrinks each year to ensure that emissions are staying in line with emission reduction targets. In addition, the revenue from the cap-and-invest program is important for helping overcome market barriers for clean technologies that performance standards—such as the CFP and RPS, but also others like energy efficiency standards—cannot solve on their own.
Finally, the programs complement each other because compliance with CFP or RPS eases compliance with the cap-and-invest program. This reduces the price of pollution permits, reducing compliance costs for all sources covered by the cap-and-invest program.
Clean Energy Jobs Bill is “Fully Baked”
The Oregon legislature has considered various forms of legislation like the Clean Energy Jobs bill for more than a decade, with a sustained push to develop a cap-and-invest policy since 2016. This past fall Senator Dembrow and Representative Helm chaired a work group process to make further refinements to the program’s design. While the Union of Concerned Scientists may not end up agreeing with every detail in the House and Senate bills that will be introduced in February, it is abundantly clear that legislators’ sustained engagement on this topic, along with extensive stakeholder input, has produced a thorough and well-vetted program design. In the parlance of the legislature, the policy proposal is “fully baked” and ready to be passed into law.
The daunting consequences of a changing climate require a swift response from governments around the world. In 2018 Oregon lawmakers have the chance to accomplish something big to maintain the Beaver State’s commitment to seriously addressing this crisis. Let’s hope—and work—to see a cap-and-invest program passed this year.