Oregon close to finalizing cap-and-trade bill

Source: By Sarah Zimmerman, Associated Press • Posted: Thursday, March 28, 2019

SALEM, Ore. (AP) — Oregon lawmakers on Monday unveiled a compromise proposal to a controversial cap-and-trade bill regulating greenhouse gas emissions, responding to overwhelming opposition from businesses and agricultural groups who worry the plan could put them out of work.

If passed, Oregon would become the second state in the country after California to implement an economy-wide cap-and-trade program. Under the bill, the state would place an overall limit on emissions and then sell a set number of pollution permits or “allowances” to the highest bidder.

But the plan sparked criticism from both sides, drawing thousands to testify at a series of public hearings around the state over the past two months. Environmentalists complained that the program doesn’t go far enough and exempts too many polluters, while businesses say the costs associated with it would mean higher fuel costs and lost jobs.

Co-chairs of the Joint Committee on Carbon Reduction Sen. Michael Dembrow and Rep. Karin Power said the new changes are meant to address those concerns and strike a delicate balance between preserving economic interests and combatting an impending climate catastrophe.

Most notably, they’re proposing to invest a majority of the funds to rural and low-income communities and added a plan to refund any additional fuel costs to those making less than their area’s median income.

“The rural communities are in the front lines of climate change,” said Dembrow, a Democrat from Portland. “They’re going to feel those effects most directly so we want to make sure any invests coming out of this program are investing heavily in rural areas and where low-income individuals are located.”

At least half of all funds must benefit rural and low-income communities, with 10 percent earmarked for federally recognized tribes. Other revenue would go to clean energy job training, wildfire prevention and a program that would fund environmentally-friendly transportation projects.

And around a fifth of the funds would be dedicated to the gasoline refund program, to help low-income individuals adjust to possible increases in gas prices as a result of the legislation.

The revised proposal now also covers emissions from waste incinerators and from fluorinated gas, which were previously exempted. Landfills will also be regulated separately.

Businesses will be allowed to discharge up to 95 percent of their emissions for free for the first three years of the program. After that, they can still receive allowances for 95 percent of their emissions if they prove to the state that they’re using the best available technology.

Power, a Democrat from Milwaukie, said that they’re taking a “stick and carrot approach” to encourage businesses to remain in the state while also reducing their carbon emissions.

“If you’re really, truly doing what’s best in class, you’ll be getting allowances to reflect that investment,” she said. “And if you’re not, you have an incentive to move to that quickly.”

The Joint Committee on Carbon Reduction will hear the details of the amendment this week, along with alternative proposals from other lawmakers. Dembrow said he’s hoping for final passage within the next few weeks.