Implementing a cap-and-trade program in Oregon will hurt Oregon’s manufacturing employers and put thousands of jobs at risk. Even proponents largely acknowledge this fact, though they offer solace to the Oregonians who will lose jobs through various messages:
- Some want to attempt to limit the economic disruption through “free allowances” and other government-controlled assistance.
- Some hope to offset the lost jobs with new opportunities in the “green economy.”
- Some promise retraining money and opportunities for those whose jobs are eliminated.
Some cap-and-trade supporters even have admitted in public testimony that they don’t care if certain types of manufacturing disappear. If nothing else, this group scores points for honesty.
But, make no mistake: Cap-and-trade, as envisioned in House Bill 2020, would sacrifice many Oregon manufacturing jobs. Even those who seek to offset jobs losses in one manner or another underestimate the tidal wave of economic damage that would flow from a poorly designed carbon-reduction program. As currently written, HB 2020 would lead key industries to reduce their Oregon presence, remove major employers from rural communities and increase costs for the manufacturers that remain.
And the economic effects would extend far beyond the workers who lose their jobs and the communities that lose employers and their civic contributions. Even Portland workers with six-figure incomes would notice the impact. Here’s why: Manufacturing is such an integral part of Oregon’s economy that you can’t shred it without weakening other sectors.
Manufacturers in Oregon:
- Employed 195,000 workers, which is about 10 percent of the state’s nonfarm workforce, at the end of 2018.
- Produce almost $50 billion in annual output.
- Generate more than 20 percent of Gross State Product.
- Buy products from other Oregon businesses, generating $1.89 in economic activity for each $1 spent in manufacturing.
- Make important contributions to workforce development. These efforts include participating in Science Technology Engineering and Mathematics (STEM) education programs and supporting development of the Oregon Manufacturing Innovation System.
- Already are investing in new equipment and processes to reduce greenhouse gas emissions.
By implementing a carbon-pricing system, Oregon would force manufacturers to compete with operations in one of the many states or countries without the added costs that come with such a system. Oregon plants either would lose business to these competitors or, ultimately, shift operations to one of these lower cost areas.
As a result, Oregon would lose jobs, prices for some products would increase, and emissions would increase when operations shifted to areas with looser environmental regulations than those already existing in Oregon.
Meanwhile, it’s important to remember all the work Oregon has already done to reduce greenhouse gas emissions, including: adoption of the renewable portfolio standard, implementation of the clean fuels program and enacting a prohibition on use of coal as a power source, among other programs.
The dream of HB 2020 supporters is to replace lost jobs with jobs in the emerging field of clean energy. But the past two decades have shown everyone how difficult it is to capture jobs in an emerging industry. Oregon’s investments to lure solar energy companies, for example, have produced few jobs at great cost.
Sometimes in life, the pain is worth the gain. But as currently proposed, cap-and-trade would be all pain, no gain for Oregon.
- National Association of Manufacturers fact sheet
- Oregon Employment Department article on manufacturing in Oregon
- Bureau of Labor Statistics 2018 employment stats for Oregon