Companies that produce emissions, such as natural gas producers, would be hit by Oregon’s proposed climate protection program. (Getty Images)
Oregonians from across the state are weighing in on a major program that officials say would address nearly half of Oregon’s solutions to the climate crisis while positioning Oregon as a leader in the clean energy economy.
The proposal would restore the Climate Protection Program, which sets declining limits on emissions from natural gas and liquid fuels. A fossil fuel-funded lawsuit invalidated the program on a formality last year, and the current public comment period marks a milestone in the Department of Environmental Quality’s work to get the plan back on track. In the process, DEQ has made improvements that strike an innovative balance: reducing emissions, promoting equity and addressing key concerns of regulated industries.
Progressive Oregon companies see many benefits to the program, creating a long-term planning horizon and aligning industries to do our part in the climate fight.
How to respond
The DEQ will accept comments through Friday, September 27. Email: cpp.2024@deq.oregon.gov.
The program would allow companies to tell customers, employees and communities they are on the right track. And it would create jobs and business opportunities for a clean economy, from manufacturers to installers – across a wide range of sectors.
In the long run, the program would generate savings and boost Oregon’s entire economy.
Independent analyses have found that the program, along with other recently adopted climate policies in Oregon, would add nearly 10,000 jobs and $2.5 billion to Oregon’s economy annually starting in 2050. We also know that transitioning customers, both businesses and households, to clean energy saves money in the long run and keeps that money circulating in our local economies.
For companies covered by the program—gas companies, oil companies, and large industrial facilities—the program would provide free emissions allowances, or “credits,” up to a set limit, or “cap,” that would decrease each year through 2050. To help companies meet the cap, the program would provide several mechanisms. First, companies would begin reducing their own emissions. Those that could do so quickly and cheaply could sell any extra credits they earn by reducing emissions faster than required by the Climate Protection Plan. Second, companies that need more time could buy these extra credits. Third, companies could also save up extra credits for use in later years. And fourth, covered companies would be allowed to average their emissions over two-year periods.
If all those tools aren’t enough, companies can buy Community Climate Investment credits. These dollars would fund projects that reduce emissions through energy efficiency, transportation electrification, renewable energy, and other approaches, prioritizing communities and households most impacted by climate change—and those most in need of the investments, cost savings, resilience, and health benefits of these solutions.
The plan also addresses the concerns of energy-intensive, trade-exposed companies in Oregon, providing them with an easier path to achieving the plan’s goals and greater independence in managing their emissions.
Despite the clear opportunity for Oregon’s economy, incumbent utilities are clinging to their outdated business models and continuing a history of delaying tactics. They ignore all other options, complain about the price of Community Climate Investment credits, and claim the total cost would be high, confusing their customers. The reality: While the price of Oregon’s credits would be higher than in other states, our emissions reductions would be slower, meaning utilities would have to buy far fewer credits than if they were operating in, say, Washington state. This would more than offset the price difference, making the cost of Oregon’s program equal to or cheaper than programs in other states.
While the program’s greenhouse gas limits would be strictly enforced, the plan would also offer benefits by working with other state programs and federal grants that provide billions of dollars to help companies reduce their emissions.
The Climate Protection Plan was in effect for two years before it was invalidated. In those first two years, Oregon’s gasoline and diesel suppliers discovered they were doing very well under the plan, selling more biofuels and cutting greenhouse gas emissions much faster than required.
In a surprise move after the legal attacks, DEQ plans to give fuel suppliers the credits they would have earned if the program had not been invalidated, and distribute them all at once when the program is restarted. This windfall of credits would flood the market and slow emissions reductions as companies choose to buy up the credits. It would also slow investment and job creation through CCIs. If DEQ plans to distribute these credits, it would have to distribute them over 10 years, to avoid the oversupply that plagued other carbon markets in their early years.
Climate-conscious businesses have the opportunity to let DEQ know what they think about an innovative, clear, long-term plan to ensure Oregon does its part to address climate change.
SUBSCRIBE: GET THE MORNING HEADLINES IN YOUR INBOX
