What defines the “success” of cap and trade? According to this LA Times article,it’s how much money the program raises – which is the key metric on which Oregon politicians are focused. It’s certainly not the program’s track record for reducing carbon emissions, as we’ve detailed previously. California’s emission reductions have little connection to the cap and trade law.
In California, politicians will collect an astounding $2.5 billionin 2018 and dole it out as part of a slush fund for projects supposedly intended to fight climate change. The single largest recipient of the money so far has been California’s controversial high-speed rail project. This project was initially estimated to cost $68.4 billion, then was revised up to $77.3 billion, and then to $98.1 billion. It’s completion date for the initial service line was pushed from 2022 to 2029. It’s now estimated to 2033. There is no question in anybody’s mind that the final service line will be even more expensive and take longer to build.
This is why an independent peer review group, established by the legislative assembly to protect the public interest, recommended halting the project. California politicians know there is no federal or private investment available for this type of boondoggle, and they couldn’t convince state taxpayers to fund it. So, cap and trade has become a convenient – and indirect – way to raise money and keep the project alive.
Oregon lawmakers’ most recent version of cap and trade would create a $700 million annual tax on the use of fossil fuels. Anybody driving a car, lighting or heating a home, or running a small business will pay more to make ends meet. Large businesses, which provide thousands of jobs across the state, will have one more reason to build a plant in another state.
In fact, a recent economic analysis of the proposed cap and trade law concludes it will result in nearly 5,000 fewer jobs in Oregon. Energy is normally the largest single operating cost after labor. Why locate in Oregon where you have to pay a lot more for energy when you could pay less in Idaho? Cap and trade is simply a way for politicians to raise more money to spend on pet projects with little accountability.
Why don’t politicians focus on cap and trade’s track record for reducing emissions? Because it’s abysmal. It’s why no other state in the country has followed California’s lead and created an economy-wide cap and trade program. Oregon has a better track record of reducing carbon emissions than California, and we did it withoutcap and trade. And there’s more on the way. Oregon recently passed new laws to reduce carbon in gasoline, increase the amount of renewable energy, and eliminate the delivery of coal-generated electricity. These new laws haven’t even been implemented yet.
So why are Oregon politicians back for more with a cap and trade law? It’s about the money.
Oregon Cap and Trade, An economic analysis of SB 1574, FTI Consulting (2016)