What is Clean Energy Jobs?
It’s a policy to cap and price climate pollution from the largest emitters in the state, and reinvest the proceeds into Oregon’s clean energy economy to create good-paying jobs and make our air cleaner. It will put Oregonians to work by making clean power like solar available to more people, improving energy efficiency in homes and businesses to save people money, building affordable housing near transit and investing in more transportation options.
Why do we need Clean Energy Jobs right now?
There’s a huge opportunity in front of us. By building clean energy into all parts of our economy, we’ll create good-paying jobs, make our businesses more competitive, and position our state to be an economic engine in the 21st century. We can’t let this opportunity pass us by. The sooner the policy is in place, the faster the investment dollars begin flowing in our state.
Plus, Oregon is already feeling the effects of climate change and air pollution -- lung disease, drought, wildfires, extreme weather, and rising acid levels in oceans. Our families, farmers, fishermen and firefighters are all bearing the burden of climate pollution - today. Oregon’s emissions are climbing, not falling. Our state must be a leader in tackling this problem for our health and our economy.
Who will pay the price on pollution?
Only those emitters responsible for 25,000 tons or more of greenhouse gases per year, about the equivalent of burning 133 train cars full of coal. In other words, your favorite grocery store, brewery or florist will not fall under the cap, only the largest polluters in the state. There are roughly 100 entities covered and about one-third of them are oil companies.
How much will the large emitters pay?
The program is set to go into effect in 2021, and climate pollution will be priced at around $16 per ton to start. At that rate, Oregon will raise hundreds of millions of dollars per year to reinvest in creating jobs and building clean energy solutions for Oregonians.
How does it work?
Every year, a certain number of permits will be made available by the state. Large emitters will be required to hold one permit for each ton of pollution they intend to put into the air that year. They will buy permits at an auction. Each year, the number of permits to pollute will shrink -- lowering the cap and the amount of climate pollution. Fewer permits will increase demand for permits. If companies aren’t reducing emissions, the price of each permit will go up because of less supply and increased demand.
Proceeds from the sale of permits will be reinvested into clean energy solutions in communities all across Oregon. For instance, money can be used to lower the cost of solar panels for homes, schools or businesses. It can be used to help low-income homeowners retrofit their homes at low or no cost to make them more energy efficient and lower energy bills. It can help farmers pay for advanced irrigation systems that save water and money on energy. It can help cities and towns develop better transit options to help people get around.
What if a polluter doesn’t buy any permits or pollutes more than allowed?
That polluter would be in violation of state law and subject to legal penalties and fees levied by regulators.
Where will the money go?
Hundreds of millions of dollars per year in proceeds from Clean Energy Jobs will be reinvested in clean energy solutions -- putting Oregonians to work by making clean power like solar available to more people, improving energy efficiency in homes and businesses to save people money, building affordable housing near transit and investing in more transportation options.
Major investment will go to reduce pollution and grow opportunities for low-income and rural communities, communities of color, and for training workers in Oregon. Equity and a just transition to clean energy are central to the policy. None of the proceeds will go to the general fund.
A dollar saved on energy is a dollar that stays in Oregon and can be invested in Oregon. Oregon is an energy consuming state. Money spent on fossil fuels leaves the state and drives the economies of oil, coal & natural gas producing states and countries. A cap on climate pollution will keep more energy dollars in our state.
Has this ever been tried before?
Yes. 10 states currently have successful cap & invest systems. 25% of Americans live in places with cap & invest program. California is part of the North American Carbon Market with the Canadian provinces of Quebec and Ontario, which all have an economy-wide cap and price on climate pollution. Oregon would link up with this market.
In the Northeast, nine states are part of the Regional Greenhouse Gas Initiative (RGGI), a cap and trade system for the utility sector. Also, in the 1990s, bipartisan federal legislation set up a cap & trade system to stop acid rain. It was largely successful, saving untold millions in infrastructure and environmental damage, and the cost of compliance was about a quarter of original estimates.
How is it doing in those places?
California is cutting emissions while its economy grows. Thanks to its price on pollution, the state has invested $3.2 billion in clean energy solutions and cleaner transportation, more than 50% of which benefit economically disadvantaged communities. In 2017, California’s legislature took a bipartisan vote to extend its program for another 10 years.
In RGGI states, since the program went into effect in 2009, the economy has grown an average of 25% while electricity prices have fallen 3% and emissions have been slashed by 40%. States are making energy efficiency and renewable energy investments more affordable, 16,000 new jobs were created to do the clean energy work. All 9 states agreed this year to increase their reduction target by 30%.
Who will oversee this program?
By joining the North American Carbon Market, Oregon benefits from not having to set up a big system to handle the auctioning of permits. It’s already in place, administered for years by the Western Climate Initiative, a non-profit. In the state, the Department of Environmental Quality already monitors pollution and will have a hand in administering Clean Energy Jobs. Citizen oversight is built into the bill, including representatives from across the state, diverse backgrounds and industries.
How does this help communities of color?
Clean Energy Jobs investments will be prioritized for communities that need more opportunities and feel the impacts of climate change first. That means low-income, rural, and communities of color will see major investments.
Renew Oregon’s coalition includes voices from communities of color, indigenous communities and advocates for low-income Oregonians. They’ve been at the table as the campaign worked out the guidelines for a policy we can endorse together. The proposed bill meets those guidelines for investment in communities, job opportunities, and real emissions reductions through access to affordable clean energy, increased transportation options and energy efficient housing.
A few examples of how a transition to a clean energy economy could direct investments toward the most underserved/impacted communities and households in Oregon:
- Increase access to public transit, safe walking and biking infrastructure; reduce pollution through vehicle electrification; and provide affordable options for travel to school and work.
- Fund job readiness and career opportunities (e.g., workforce development programs, on-the-job training)
- Reduce utility bills for low-income households by weatherizing homes and increasing energy efficient heating and cooling.
- Bring jobs and housing closer together. Create jobs and reducing transportation costs by building affordable, energy-efficient housing near transit.
- Fund vanpools for rural farm workers to travel more safely to work and with less fuel and air pollution created.
- Ensure low-income households have access-- at low or no cost -- to community solar projects, which provide bill credits to the households for owning a portion of a solar power project.
How does this help rural areas?
Clean Energy Jobs investments will be prioritized for communities that need more opportunities and feel the impacts of climate change first. That means low-income, rural and communities of color will see major investments.
We will create jobs in rural communities because this kind of work has to be done at home and can’t be outsourced -- energy efficient construction and installing clean energy like solar, geothermal and small hydro or wind projects. Rural parts of Oregon have ample resources like regular sunlight, strong wind and active geothermal springs to take advantage of these technologies.
Farmers need help using less water and saving on electricity. Clean Energy Jobs will help pay to install advanced irrigation systems that are much more efficient, using less water and power. Small turbines can be installed in the pipes to generate electricity to use or sell -- a new revenue stream for rural economies.
In Lake County, they’ve converted schools and the hospital to run geothermal heating and cooling, saving thousands on energy costs and putting good people to work. Better, cleaner transit in and between towns in rural Oregon will mean people will have less-expensive options for going to the store, school or their jobs.
Rural landowners, like the Warm Springs Tribe in Eastern Oregon and the City of Astoria, are rewarded for protecting trees and clean water with proceeds through Clean Energy Jobs. Right now, the money comes from large emitters in California. The trees in Oregon absorb carbon dioxide, so by paying to keep the trees standing, those companies “offset” some of their contributions to global warming. The tribe and the city earn both a significant income for capital improvements and have bolstered the security of their watershed.
Why not a carbon tax?
Many years of work have gone into shaping the policy in Clean Energy Jobs. While several mechanisms were explored by lawmakers and a large coalition of groups, cap & invest emerged as the best policy for Oregon. After a decade of work, it is ready to cross the finish line in 2018.
The cap & invest system in Clean Energy Jobs is a flexible, market-based program that will allow industrial emitters to comply in the most efficient, low-cost way possible while still guaranteeing reductions in pollution. Companies will have flexibility for how they cut emissions and the cap gives certainty that emissions reductions will be achieved. By reinvesting the proceeds in clean energy solutions in Oregon and joining the North American Carbon Market, there will be even more options for reducing pollution.
The price on pollution incentivizes large businesses to cut emissions, because for the first time the true cost we, the public, are bearing is recognized and emitters will be taking responsibility for it. Just as we all pay to have our trash picked up from the curb, it's fair for big polluters to pay for what they put into the air. Once improvements are made, those businesses will benefit from cost savings on energy, which will make them more competitive.
A carbon tax does not guarantee emissions reductions like a cap does. While a tax could be set high enough to force a change in behavior by itself, that approach is rigid. There’s also concern that tax revenue might not as easily be directed to reduce pollution and create clean energy jobs as proceeds from cap & invest.