By: Sarah Johnson
Climate change is gaining traction on the national legislative stage, so I thought it would be a good time to take a closer look at an interesting bill from Oregon, the Oregon Climate Action Program. This bill is interesting both due to the fanfare surrounding the legislation and also because it is a good example of the trend we see in climate related legislation.
HB2020 passed the Oregon House on June 17th, but it ultimately died in the Senate. This bill put the spotlight on Oregon for a week because eleven Senate Republicans fled the state to prevent a vote on the proposal (along with other climate related legislation like HB2007) at the end of the session this year. Governor Kate Brown ordered police to find the missing lawmakers and bring them back to Salem so they could vote. Senate leadership was also forced to shut down the state capitol while the Senate Republicans were out after they received threats from far-right militia groups planning to protest in support of the GOP senators “in hiding”. A rally held in support of these Senators was dubbed the “Stay Strong Stay Gone” and was attended by loggers, truckers, farmers concerned the legislation would hurt their rural communities’ economy.
Let’s take a closer look at what the bill was proposing to do that stirred up all that trouble.
What is a Carbon Cap and Trade Program?
According to the Environmental Defense Fund, a cap and trade program is a system designed to reduce pollution in our atmosphere using market forces. The system would place a cap on greenhouse gas emissions, creating a firm limit on pollution which over time becomes more strict. The trade aspect would create a market for companies to buy and sell carbon allowances — if a company stays under the cap it could sell however much “room” it had under the cap to another company that went over the cap. Trading would give companies strong incentives to save money by cutting emissions in the most cost-effective way, thus promoting innovation and decreasing pollution and cost. It would also serve to make products that cause a lot of pollution in their production to be more expensive, naturally driving down demand for those products in the marketplace.
The Center for Climate and Energy Solutions says, “Cap and trade is an approach that harnesses market forces to reduce emissions cost-effectively. Like other market-based strategies, it differs from “command-and-control” approaches where the government sets performance standards or dictates technology choices for individual facilities. Cap and trade allows the market to determine a price on carbon, and that price drives investment decisions and spurs market innovation.”
What did the Oregon Climate Action Program Propose?
The principle idea behind the Oregon Climate Action Program was to reduce carbon while growing Oregon’s economy. The hope was to create a market-based mechanism to incentivize emissions reductions and generate revenue to invest in clean energy technology and job training.
The bill would have set a cap on carbon dioxide emissions for the transportation, energy, and manufacturing sectors and would have reduced the cap of allowable emissions gradually. The cap on all anthropogenic carbon emissions would have been set at 45% below Oregon’s 1990 carbon levels by 2035 and 80% of that by 2050 (demonstrating the “stricter over time” idea behind cap and trade). The bill allowed for a few exceptions; biomass, waste incineration and any other entity that labels some or all of its emissions as “biogenic” would no be subjected to the cap.
HB 2020 would also have forced polluters to purchase carbon credits at auction thus charging them for a portion of their greenhouse gas output. The polluters targeted in this legislation are some of the state’s largest operations including fuel importers, manufacturers, and gas and electric utilities. The regulated companies would be able to trade credits among one another to generate revenue via their surplus credits. These companies would have been able to use carbon offsets for 8% of their emissions. Large manufacturers would have received 95% of their “carbon allowances”, or credits, for free as long as they prove to the state they are using the “best available technology” in the market.
What was the Issue with this Bill?
Republicans primarily argued HB2020 would drag down Oregon’s economy, citing a substantial increase for the cost of fuel (raising gasoline prices by more than 20 cents per gallon) and its potential to wreak financial havoc on important rural industries like trucking and logging.
HB 2020 has been likened to California’s cap and trade program, which has drawn criticism. One of the main reported issues with California’s cap and trade program is that their program allowing for unlimited banking of carbon allowances can lead to an oversupply of carbon allowances, crashing the “price on carbon” and rendering the program ineffective. HB 2020 also did not impose limits on banking allowances. Additionally, the Oregon bill would have put an allowance price ceiling be in place by the Director of the Carbon Policy Office. This ceiling would similarly render Oregon’s program ineffective by removing incentives created by market driven prices to stop polluting – a major factor behind the idea of cap and trade.
Supporters of HB 2020 think it is one of the the United States’ most progressive climate policies. People who support it not only like that it cuts emissions, but the legislation centers around investing in transitioning the state economy and infrastructure. As a coastal state, it is essential Oregon be positioned to better prepare for more the intense weather events we have all been experiencing as climate change worsens.
Conclusion
Although HB2020 died this year, the legislature is already at work using it as a starting point for new proposals for 2020. One thing is clear, the division shown in Oregon this year is indicative to the contentiousness surrounding what exactly should be done about climate change when factoring in the economy, jobs and our general need for a livable planet. We all keep acting like we have time left to figure this out, but every report released stresses more and more how we are already too late to have the impact required to save our climate. This is especially worrisome when you examine the rate at which we are (not) proposing, enacting and abiding by important climate change policy around the world, and more specifically, in the United States.
Cover Photo by Li-An Lim on Unsplash
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