The cap-and-trade system in HB 2020 would impose steep costs on businesses. In the case of large manufacturers, the price would multiply quickly as they pay for their direct emissions through credits and higher energy and material costs. And if Oregon no longer is an attractive place to do business, Washington, Idaho, Nevada and other states would welcome their jobs.
California has a diverse and immense economy that can absorb the ripples of a cap-and-trade system. Those ripples would become sneaker waves in Oregon’s much smaller economy.
Many businesses, especially utilities, would pass the costs along to regular Oregonians, and that would disproportionately hit the people least able to pay. For example, experts estimate vehicle fuel costs would increase by about 16 cents per gallon, effectively giving Oregon the third-highest gas tax in the nation at 50 cents.
Rural and low-income communities would feel the sting worst. Residents of rural communities buy more gas because they must drive further. Those in the agricultural and ranching industries operate on slim margins and need fuel to keep equipment moving. It’s not as if there are affordable electric threshers capable of running all day. Family farms could be squeezed out of existence.
Likewise, low-income Oregonians would pay more than their wealthier neighbors. Many families rely on a low-efficiency older car to get to work and the store. They can’t just buy a Prius or a Tesla. Nor can they easily afford expensive energy efficiency upgrades in their homes that would let them buy less natural gas for heating.
The bill reeks of rich, progressive urbanites misunderstanding rural and struggling Oregon. It lacks incentives to encourage and support individual changes. Those most able to change wouldn’t feel the pinch.
Supporters point out that some of the revenue from the bill would be used to help impacted communities. It’s unlikely that would be enough, though. Money can’t magically create replacement jobs in the hardest hit rural communities. A server farm just doesn’t employee that many people, and those it does aren’t usually laid-off farmhands.
HB 2020 also leaves significant gaps in oversight. A complicated tax and regulation system like this requires ongoing management and refinement, but if that comes from partisan appointees or industry lobbyists who were able to buy a seat at the table with carefully placed campaign contributions, then it will not succeed.
The same goes for the billions of dollars the bill would raise for the state. Some of it would be constitutionally locked up for transportation projects, but a lot would remain for other uses. The right fiscal stewardship needs to be set up from the start, if that’s not to become a slush fund for lawmakers and the governor.
Lawmakers have tried to address some of these issues with amendments to the bill, but they’ve come up short and introduced new confusion.
Climate change is a serious global crisis. Lawmakers and backers of HB 2020 deserve credit for trying to address the problem. Yet even if they pass this bill, the net reduction in global greenhouse gas emissions would be negligible. Oregon’s economy and its residents would pay for no real gain. Better to step back and work more closely with other states to create a truly regional response, building on the Western Climate Initiative collaboratively rather than individually. It’s not as if Congress and the White House are going to lead on the issue anytime soon.
Oregonians might forgive the giddy exuberance of Democrats who this year hold super-majorities in both chambers of the Legislature and want to bolster their progressive bona fides. In their rush to pass this legislation, though, they risk doing far more harm than good.