Gov. Ted Kulongoski is in the midst of his last legislative session as chief executive and is actively pursuing a cap-and-trade program that would reduce the carbon footprint of the state. However, whether the program would leave a positive mark on the state’s economy is a point of contention among politicians, business leaders and researchers.
Senate Bill 80 was drafted at Kulongoski’s request and would establish an Oregon Climate Initiative Task Force to develop and present design recommendations for greenhouse gas cap-and-trade programs. The governor requested the bill be drafted in correspondence with the Western Climate Initiative, a plan drafted among western states’ governors to reduce the emission of greenhouse gases. Kulongoski spokesperson Rem Nivens says cap-and-trade is an innovative program that would set Oregon up for the business of the future.
“If we don’t do anything to combat the causes of global warming now, we will be looking at water shortages and possible forest fires that would put the state at an economic disadvantage later,” he said. “Putting a preventative measure in action now gives Oregon an economic jump-start on the rest of the country.”
The other “partner” states in the Western Climate Initiative are Arizona, California, Montana, New Mexico, Utah and Washington. The Canadian provinces of British Columbia, Manitoba, Ontario and Quebec are also partners.
Cap-and-trade programs set a limit on the carbon dioxide emissions major industries can produce. In the governor’s proposed plan, the caps on emissions would get lower over time to ensure carbon emissions are significantly reduced. Nivens says the state has not decided what those limits will be, first looking to collect public input. The trade component of the program would permit businesses and industries to sell carbon dioxide credits they didn’t use to other businesses that do not stay within their government-allocated cap.
State Rep. Vicki Berger is skeptical a large scale plan is the best solution to reduce greenhouse gases in Oregon.
“I have a lot of questions about the cap-and-trade program. It makes more sense to me to do basic stuff like encourage carpools, expand public transportation and invest in general conservation before we implement such a drastic state program,” Berger said.
Groups opposed to cap-and-trade argue that the program could force industries and business to produce less in order to meet carbon caps and force industries to eliminate workers. Elana Guiney, Oregon AFL-CIO communications and research director, said the union is not opposed to a state cap-and-trade program, but is concerned that cap-and-trade could potentially put Oregonians out of work. It has also been suggested that industry and business in Oregon would leave the state in an effort to avoid strict regulations.
“Cap-and-trade could have a very negative effect on workers who could lose their jobs. However, we testified on the bill and believe the legislature can take precautions to reduce those effects,” Guiney said. “There is a need for a program that protects Oregon from global warming, but the environment is not the only thing that needs to be protected; people have to be protected too.”
Whether a cap-and-trade program would hurt Oregon’s economy is not clear. Two contradictory studies have been published presenting opposing ideas. The pro-business Cascade Policy Institute released a study that stated a cap-and-trade program would cut Oregon’s economic growth in half and cost the state 90,000 jobs, while the University of Oregon’s own Climate Leadership Initiative calculates that a business-as-usual approach to global warming would be a greater cost to Oregonians, costing them $3.3 billion a year starting in 2020.
“Raising the price of carbon will allow other alternative resources to be considered more seriously putting Oregon ahead of the energy curve,” said Roger Hamilton, Climate Leadership Initiative government program manager. “It has been instituted successfully in New England and we can expect Congress to act on the issue, so if we get on this now we will be ahead of the game.”
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