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State would put a price on industry CO2 emissions as Dems say they have the momentum to push through the program

SALEM — Democratic lawmakers say they finally may have enough momentum to enact a "cap and invest" greenhouse gas-reduction program in 2018.

State Sen. Michael Dembrow (D-Portland) and Rep. Ken Helm (D-Beaverton) convened work groups Sept. 21 to help refine a proposal that has evolved over the past few years.

"I think there is a path to get this done in 2018," Dembrow said. "The sooner we do it, the sooner we can do the work and get the investment going."

House Speaker Tina Kotek (D-Portland) and Gov. Kate Brown have both backed the effort.

Similar to a program in California, the Oregon proposal would limit the amount of carbon dioxide or equivalent emissions a business could emit each year. After exceeding the cap, the business would be required to buy market-priced allowances for any additional emissions.

The payments would encourage businesses to reduce their carbon footprint. Meanwhile, proceeds from a competitive auction of those allowances could yield an estimated $700 million per year to invest in projects that slow climate change, supporters say.

At the end of the 2017 Oregon legislative session on July 7, Kotek identified the program as an unfinished priority.

One week later, the governor announced that she would seek to pass a state "cap and invest" bill next year. She made the announcement at a screening of former Vice President Al Gore's "An Inconvenient Sequel" hosted by environmental group Renew Oregon in Portland.

A reporter from The New Yorker, who attended the screening, quoted Brown as saying: "I think the rest of the world needs to see Americans, and Oregonians, standing up. We must participate, and we must be part of the solution."

About 100 businesses that emit at least 25,000 tons of CO2 or the equivalent per year would have to buy allowances. Those businesses include fuel suppliers, electricity providers, landfills and manufacturers.

Proceeds of the program could then be used to invest in projects such as solar panel installations or construction of affordable housing near light-rail lines, said Brad Reed of Renew Oregon.

Helm and Dembrow are reaching out to Republican lawmakers and industry leaders to join the "cap and invest" work groups. The invitations came after a memo to the governor's office Aug. 2 identified only Democratic lawmakers as members of the legislative work groups.

"Based on the memo released by the governor's office, it doesn't appear the governor's office has much intention of working with Republicans on that issue," said Preston Mann, a spokesman for House Minority Leader Mike McLane (R-Powell Butte).

Rep. Cliff Bentz (R-Ontario) said he plans to decline an invitation to join the work groups.

"I don't want to be brought along as window dressing for an outcome already determined by the Democrats," Bentz said.

He said discussions should focus on whether "cap and invest" is right for Oregon.

State lawmakers have yet to assess how much existing policies already have reduced CO2, Bentz said.

"In its place in the world, has Oregon done its part or not?" he said. "Those are justifiable questions to ask because we are a small state."

The Legislature has adopted voluntary goals to reduce statewide greenhouse gas emissions, and the Oregon Global Warming Commission presents regular reports to the Legislature about how the state is meeting its goals, and where it is falling short.

Deciding whether to adopt "cap and invest" should wait until 2019, when the Legislature will have a session of more than five months, Mann said. The 2018 session lasts only 35 days.

"We are talking about an extremely complicated issue and (for) a 35-day session, we do not think that is appropriate," Mann said.

Opponents also say costs of the program eventually would trickle down to consumers.

"We would have a lot of concerns about the way the program is presented so far, because the individuals affected by this are in rural and low-income communities who already have taken the brunt of policy changes recently and in the last decades," Mann said.

A study by the Oregon Department of Environmental Quality indicated the costs could have an inordinate effect on people in low-income and rural communities because they already spend a larger percent of their income on fuel.

But another study out of California shows record economic growth and carbon reductions came in tandem with that state's participation in a "cap and invest" program.

Oregon is modeling its program after California's, so the state can learn from its southern neighbor's mistakes and successes, Dembrow said.

The California report "busts the old myth that reducing emissions comes with reduced economic activity, even as their population is growing, pollution is falling and the economy is booming," said Reed of Renew Oregon. "Opponents of the policies in California ... said the same bad things. History has proven them wrong."

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