Lawmakers begin cap-and-trade discussions
SALEM – A joint legislative committee charged with developing policy for a statewide "cap and trade" program launched its work Tuesday during the state Legislature's quarterly meetings.
House Speaker Tina Kotek, D-Portland, and Senate President Peter Courtney, D-Salem, appointed the 14-member Joint Committee on Carbon Pricing after lawmakers declined to act on the Clean Energy Jobs Bill earlier this year to create a cap and trade program modeled after California's. The committee launched its task by hearing and questioning experts on state and national environmental policies.
"We are here to develop a program that can help us reduce our greenhouse gases and to work on also growing economic opportunity across the state, and I'm really looking forward to working with each and every one of you to do that," said Kotek, the committee's co-chairperson.
State legislative leaders have committed to recommending a carbon-pricing policy during next year's 160-day legislative session.
The Clean Energy Jobs Bill earlier this year set an allowance, or a cap, for the amount of emissions industry can emit free-of-charge. Any business that released more than the equivalent of 25,000 metric tons of carbon dioxide would be required to buy credits at auction to offset their emissions.
The legislation called for Oregon to join the Western Climate Initiative, which shares a market to sell offset credits. The initiative includes California and the Canadian provinces of Quebec and Ontario.
About 100 Oregon businesses, including large manufacturers, utilities, fuel distributors and others would have been required to buy credits.
The proceeds of those purchases would have gone toward investing in projects aimed at offsetting carbon emissions.
Well-designed cap and trade programs can encourage businesses to adopt cleaner technology and operating procedures and also invest in green energy, which fuels the economy, said Dallas Burtraw, an expert on environmental regulation and a senior fellow at Resources for the Future in Washington, D.C.
"More and more customers are forcing corporations to take these steps," Burtraw told the committee Tuesday. "In order to compete, they are trying to differentiate themselves by showing that they are clean and green.
"The firms that are more efficient are the firms that are more profitable. Investment is happening in the companies that are manufacturing products in a less energy-intensive way."
The Legislature set a goal of reducing carbon emissions to 51 million metric tons annually – which is about 10 percent less than 1990 levels - by 2020. The most recent measurement showed the state's carbon emissions at about 62 million metric tons, so the state needs to reduce emissions by about 11 million metric tons. That's the equivalent of taking nearly 2.4 million passenger vehicles off the road for one year, according to the U.S. Environmental Protection Agency.
Transportation is the main source of growth in greenhouse emissions, from both freight and an increase in vehicle passenger miles, said Richard Whitman, director of the Oregon Department of Environmental Quality.
The carbon-pricing committee is scheduled to meet at least six times before the end of the year to develop the proposed policy, Kotek said.
"I'm confident and I'm firm in saying it can make sense for Oregon," Burtraw said. "Energy transformation is happening globally, and Oregon is particularly well-positioned to take advantage of that because of the resource base that the state has."