Tax maybe, but no cap-and-trade program
The Oregon Legislature proposes to limit carbon-dioxide emissions to no more than 20 percent of 1990s levels. If enacted, even if phased in over the next two to three decades, this proposal would probably be very harmful to the Oregon economy and the general welfare of Oregonians.
Instead, the legislature should consider a tax on carbon dioxide, which would be set so the benefits of the resulting market-driven mitigation do not become less than the tax itself. William Nordhaus, winner of the Nobel prize in economics for his work on the cost of man-made climate change and policy for addressing it, suggests a fixed-rate tax on carbon dioxide in the range of $20 to $35 per ton of carbon-dioxide emissions, applied at the global level.
Cap and trade, where companies purchase and produce offsets for mitigating carbon-dioxide emissions, should be dumped altogether as a proposal before the Oregon Legislature. This is because accounting for what is and what isn't an offset is pock-marked with dubious claims. The state has already experienced the failure of its Business Energy Tax Credit (BETC) program in recent years, where the Oregon Department of Energy could not account for nearly a billion dollars in tax credits it approved. With BETC, tax credits were handed out on a case-by-case basis, as would be the case with cap and trade, only it would be carbon-dioxide offset credits instead of tax credits.
If truth be told, the climate is going to change regardless of what man does and especially if only a small part of the globe is involved, like in this instance with Oregon.
But a tax could be beneficial if the consequent tax revenue is used to reduce summertime forest fires and wildfires through preventive programs with incentives. The forest management entity would retain a percentage of the funds for whatever it likes, if it keeps the fires down at a lower rate than in the past few summers. Of course, this involves working through the U.S Forest Service, which is a headache in and of itself.
So, if we are to bear the regulatory or tax costs of carbon-dioxide emissions — given the clout of progressives in charge of our state's governance — it should be a tax that doesn't cause economic mayhem and the consequent tax revenue should go to reducing fires that caused the bad-air woes of the last few summers.
Elvis Clark is a Milwaukie resident.
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