Oregon's Climate Control Legacy

By Matthew Baird

I have always maintained a permanent residence in Oregon, yet was surprised to learn a few years ago that the state was the first in the nation to adopt legislation to curb carbon dioxide emissions— the Oregon Carbon Dioxide Standard — in 1997.

As a native Oregonian, I naturally felt some pride at being associated with the early adoption of climate mitigation legislation, and rightfully so, considering the positive impacts and catalyzing effect this legislation has had across the country.

While the standard’s climate impact has not kept pace with the growing need for carbon finance, there are several climate solution opportunities on the horizon with potential to bring Oregon to the forefront of climate action once more.

A model that works

The Oregon Carbon Dioxide Standard was signed into law in 1997 with little opposition. Previous tests demonstrated that the competitive electricity market could afford to internalize some CO2 controls, that mitigation measures were practicable, and that these measures provided local economic development benefits.

The standard set a limit on new fossil fuel power facilities, but is flexible in how they may meet the new obligation. Facilities may elect to offset the emissions onsite, directly manage a portfolio of offset projects, or provide funds to a state-recognized nonprofits to manage the portfolio of offset projects for them. While all Oregon utilities have elected to fund the Climate Trust, the flexibility of the law helps attain utility buy-in as one size does not fit all.

The standard has maintained its relevance over the years as new power plants must reduce their emissions to be 17 percent below the best existing gas-combustion plant in the U.S. Thus, as technology changes, the CO2 target changes with it. Over the lifetime of the standard nearly 1.4 million metric tons of CO2 offsets have been retired on behalf of Oregon as of the end of last year. This is no small feat, and Oregonians should be proud.

Building on the Oregon standard

As well as the model works, the Oregon Carbon Dioxide Standard’s climate impact is not sufficient to counteracting the state’s footprint. The price per short ton (current carbon markets use metric tons) was initially only 57 cents. While the price per ton rose to $1.27 or $1.40 per metric ton for the most recent power plant addition in 2014; this increase has not kept pace with market prices for quality offsets.

For example, the cheapest California Carbon Offset now sits above $9 per metric ton. And while California is the domestic leader in the fight against climate change, some research indicates their pricing may not be high enough. The social cost of carbon, which accounts for the full economic impacts of CO2, has been estimated to be anywhere from $37 to $220 per ton emitted in 2015. The World Economic Forum estimates $5.7 trillion will need to be invested annually in climate mitigation between now and 2020 to avoid the worst impacts of climate change.

Oregon will not be able to offset its own climate impact simply charging Oregon utilities $1.40 a ton given the investment needed over the next few years, but the state has several opportunities Oregonians can get excited about.

Changes ahead in Oregon

Oregon House Bill 3250 and 3252 both attempt to put a price on carbon pollution and are currently in the House Committee on Energy and Environment. HB 3250 is a carbon tax and dividend program that redistributes the funds to citizens. HB 3252 places a $60 per ton fee that would be reinvested in jobs, equity and low-carbon transportation infrastructure. While both of these proposals are improvements over business-as-usual, and are appealing in their simplicity, the bill to watch is House Bill 3470.

House Bill 3470 passed out of the House Committee on Energy and Environment to the Committee on Rules on April 21. The bill, also called the Climate Stability and Justice Act, requires enforcement of Oregon’s climate goals (HB 3542 from 2007) and requires the Environmental Quality Commission to create a compliance plan by 2018. This requirement may also help Oregon in the current lawsuit concerned with its failure to meet the state’s climate goals.

The Climate Stability and Justice Act includes a requirement to cooperate with other governments (all the way up to the federal level) to strategically integrate greenhouse gas reductions. Given California’s existing carbon market and Washington state’s carbon offset bills currently working their way through the legislature, the act presents unique opportunities to efficiently implement a climate mitigation strategy for the region. Furthermore, the act would identify all state laws and programs related to greenhouse gas emissions and adjust them to fit within the Environmental Quality Commission’s plan. This means the Climate Stability and Justice Act would address the existing Oregon Carbon Dioxide Standard, allowing for some needed updates, and ensure that Oregon will not be double-billed for carbon pollution.

The act will also direct investment to disadvantaged communities -- providing opportunities for beneficial participation by small businesses, schools and other community-based institutions. History has shown that society’s environmental impacts are not evenly distributed across socioeconomic classes, and the legislation will seek to help remedy such imbalances.

The Climate Stability and Justice Act opens the door to market-based declining emission limits for sources -- in other words, cap-and-trade. While other options, like the proposed carbon tax house bill, certainly make carbon pollution more expensive, the Climate Trust has examined existing domestic cap-and-trade programs, such as California’s system, and found them to be successful at capping emissions, providing funds to those who need it and still growing the economy.

Oregon as an early adopter

The state of Oregon may be a small part of the global community, but we have a responsibility to take action to mitigate our own impacts. Oregon was on the leading edge of domestic climate policy in the late '90s, but has not kept pace; the state admitted failure on its own climate impact goals established in 2007.

There are several Oregon bills that would bring the state back to the forefront of climate action, but House Bill 3470 has the best chance to yield the greatest results on multiple fronts. Not only does the bill increase the price of carbon pollution, but it also ensures that Oregon meets its climate goals, requires collaboration with other agencies, provides funding to those who need it most and is able to put a measurable cap on carbon pollution.

While much of the rhetoric on climate change has been gloomy, the Climate Stability and Justice Act presents an exciting opportunity for Oregonians to build on existing climate solutions and continue leading the nation in the fight against climate change.

Image credit: Flickr/Paul Nelson

Matthew Baird is the Program Coordinator for The Climate Trust