SALEM — After nearly a year of work by a legislative committee, a bill released Thursday afternoon outlines how Oregon would drastically cut its greenhouse gas emissions and become the second state to implement a cap-and-trade system.
The anticipated legislation — criticized before it even appeared — instantly became the talk of the Capitol, though many legislators weren't exactly certain what had emerged. At 98 pages, the legislation is more something to devour after dinner with a bottle of wine than something to skim through between committee hearings.
Lawmakers, lobbyists and nonpartisan legislative analysts alike scrambled to read the proposal, what is called the Oregon Climate Action Program, branded as Legislative Concept 894.
Brad Reed, spokesman for Renew Oregon, an organization that has heavily pushed cap and trade, said the bill is a landmark environmental move that will improve the lives of Oregonians and energize the economy. If passed, the policy would kick in in 2021.
Reaction to the new bill was swift — and partisan. Gov. Kate Brown issued a statement soon after the legislation became public, putting her political muscle behind it. "It is encouraging to have reached this important milestone with a bill that reflects significant work on the part of legislators, advocates, and businesses across Oregon," Brown said in a statement. "I look forward to further refinements through the legislative process to ensure the program achieves our climate goals while growing our economy."
Incentives to invest
Republicans and some business organizations criticized the legislation soon after it became publicly available, though their critiques were general. The bill is similar to legislation introduced in 2018, in that the overarching goal is to reduce the state's carbon emissions to 80 percent below 1990 levels by 2050. The cap is also still set at 25,000 metric tons of carbon emissions per year.
Like last year, this proposal would regulate oil companies immediately. Utilities would be given special allowances to freely exceed the limits for nine years, then start to pay — something Reed said was too generous. In a divergence from last year's legislation, manufacturers would get 100 percent free allowances in the first year, then have fewer free allowances each year after.
"That creates the incentive to start investing in more energy-efficient operations," said state Sen. Michael Dembrow, D-Portland. "If they don't, they're going to have to purchase on their own more and more of those allowances. This is a market-based system, so if they're able to become more efficient more quickly, they're actually going to have a valuable asset in their permits (and) will be able to sell them to other businesses that need them."
The money polluters would pay for permission to put more emissions into the air then allowed would be spent by the state on projects to help Oregon's environment. That would include municipal transportation systems, affordable housing near public transit, electric vehicle charging stations, solar panels, energy-efficient windows and furnaces and insulation for homes. Nearly every Oregonian could be affected by the ambitious proposal.
The proposal last year dedicated some funds to low-income communities, rural communities, tribes and communities of color. Under the new proposal, those communities would have priority claim to the new state funds — but not certain access, Reed said.
Critics have said one of the prime impacts of the effort to control air emissions would be higher gas prices. To counter that, oil companies could blend gas with less carbon-emitting fuel to pay less in allowances, Reed said. That and other mitigations measures could impact how much of the cost is passed to the consumer.
Dembrow said he wanted to be wary of who pays the costs of the environmental legislation.
"As we're putting a price on carbon, we want to make sure it doesn't fall too heavily on the backs of people who are least able to afford it," said Dembrow, who chairs a committee of representatives and senators focused on carbon reduction.
The program would authorize lawmakers to consider ways to cut down on people's energy costs through home weatherization and energy efficiency projects, and to help people with jobs in the fossil fuel industry — like gas station attendants — train for new jobs in renewable energy.
Lawmakers could do more to help residents of rural Oregon become more energy efficient and rely less on fossil fuels, Dembrow said.
He wants the policy to not only cut down on carbon, but to also benefit the state's economy and become a model for other states. "We know that in the near term, there's not going to be federal action on this, so it's going to be up to the states, individually or together, to get a serious commitment to climate action," Dembrow said.
A complicated concept
Oregon would link with California and Quebec in a marketplace to trade allowances so companies who have excess credits because they polluted less could cash them in. New Mexico could follow, as its governor signed an executive order this week outlining efforts to bolster the renewable energy sector.
Dembrow noted that the proposal unveiled Jan. 31 faces changes despite the Democratic drive behind it. Starting a little after 3 p.m., the Capitol halls started buzzing as lobbyists started asking who had seen the bill. The interest didn't dissipate. Hours later, people stood in huddles chatting about the bill's mere existence as the building slowly emptied.
Lawmakers were in the same boat as most everyone else. Republicans, by and large, have been opposed to the idea of a carbon cap. This week, those tensions boiled over as several accused Democratic leaders of crafting the bill in a back room. On Thursday, fears weren't assuaged or solidified, as they had yet to read it.
Sen. Cliff Bentz, R-Ontario, and Rep. Shelly Boshart Davis, R-Albany, were two of the more vocal critics of the perceived secrecy surrounding the bill, but neither had a chance to look it over before the workday ended.
Boshart Davis said she remains worried about increasing fuel prices and how this could impact the agricultural sector that ships food out of state or the country. The House Republican caucus said in a statement that the proposal would "rearrange virtually every personal and family budget, and change the life of every Oregonian."
"Our concern is that with such an incredibly complicated concept, our working families are not going to know about the drastic increase in the cost of driving they will face," said House Republican Leader Rep. Carl Wilson, of Grants Pass. "If they heat their homes with natural gas, they will find winters will take on a new meaning."