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Biking would win big under Oregon Climate carbon tax plan

Posted by on February 26th, 2015 at 11:27 am

A new advocacy group is angling for Oregon to use its moment as one of the only fully Democratic-controlled state governments in the country and pass the country’s first statewide carbon tax.

The group, called Oregon Climate, is pushing a concept called “tax and dividend”: instead of sending the proceeds into government coffers, all of the revenue collected from wholesale fossil-fuel transactions — gasoline to a distributor, coal to a power plant, and so on — would be pooled and divided evenly among Oregonians in the form of checks worth an estimated $500 to $1500 per year.

“This is the most climate-friendly progressive legislature that we’ve had, and maybe the most climate-friendly in the country right now,” Oregon Climate Executive Director Camila Thorndike said in an interview Tuesday. “States across the country have their eyes on Oregon, and we cannot let this opportunity pass by.”

“Rather than bundles of piecemeal decision-making, you’d have an economywide transition to walkable, bikeable, livable cities.”
— Camila Thorndike, Oregon Climate

Prices would rise in Oregon for concrete, gasoline, electricity and other fossil-fuel-intensive products. Dan Golden, Oregon Climate’s volunteer policy director, said Tuesday that their proposed tax of $30 per ton of carbon (increasing by $10 each year) would translate into about 27 cents per gallon of gasoline, increasing another 9 cents each year.

However, those additional costs would be offset by the checks Oregonians would receive. Oregonians with smaller-than-average carbon footprints would come out ahead, while those with larger-than-average emissions would lose — giving everyone continued incentives to cut their energy consumption.

“I’m not a transportation expert but I think if I were, I’d be really stoked about carbon pricing,” Thorndike said. “Rather than bundles of piecemeal decision-making, you’d have an economywide transition to walkable, bikeable, livable cities. … We’d have so many incentives backed financially to really build our lives and our economy around alternatives to cheap gas.”

Carbon tax could lead to gas tax flexibility, too

East Sunday Parkways-38

Unlike many states, Oregon can’t use gas taxes or car-tab fees to finance off-street paths like the Springwater Corridor. But a carbon tax would require changing this rule.
(Photo: J.Maus/BikePortland)

In addition to that benefit to people who get around Portland by bicycle, Oregon Climate’s proposal might also open another door in the transportation world. Because a tax on greenhouse gas emissions would count as a tax on gasoline, Oregon Climate’s proposal would only work if the state votes to amend or repeal its 35-year ban on using gas taxes or auto fees for anything except roads.


That ban, in Article IX, Section 3a of Oregon’s constitution, has been a thorn in transportation advocates’ side since the day it was passed. Among other things, it’s one of the big reasons the Portland area has so few off-street biking paths.

But the ban has many friends, too — so many that it’s long been seen as politically untouchable.

One of its enemies is longtime local transportation advocate Jim Howell, who in a separate effort is trying to get support for a bill, SJR 16, that would let vehicle taxes and fees be spent on “infrastructure that reduces traffic burden of, or pollution from, motor vehicles on public roads.”

Howell argues that 2016, a presidential election year, will give Oregon an electorate as friendly as it’s ever been to repealing that ban.

The year 2016 is also in the sights of Oregon Climate, though Golden conceded that the group is working toward a possible constitutional amendment “whether or not it’s politically realistic now.”

“We want to be the terrier that sinks their teeth into this thing and won’t let go,” he said. “We’re trying to let everyone know that we’re not going to go away if it doesn’t happen right now or it won’t happen in 2016. … There are a lot of voices out there motivated by the politically realistic thing. We’re motivated by the scientifically realistic thing. And that is that we need an effective price on carbon.”

Cap-and-dividend system, a second option, wouldn’t need a popular vote

PDX Bike Swarm - ALEC F29 protests-23

A cap-and-dividend system would raise energy prices but wouldn’t count as a tax.

Putting a price on carbon might not require a tax. Another option would be for the state legislature to approve a “cap and dividend” system that would let the state sell or auction off the rights to emit certain amounts of greenhouse gas.

The proceeds from those sales would be evenly divided among Oregon residents each year, much like those from a tax.

“A tax is better,” Golden said. “It has a smaller regulatory burden; you’re not creating a whole market for selling permits. … I know what the price of carbon is going to be in 10 years or 30 years.”

But a tax might be harder to pass, because it’d require ballot approval by voters statewide as well as 60 percent approval from both House and Senate. So Oregon Climate is simultaneously pushing for the “cap and dividend” system, which it says doesn’t count as a tax, and would therefore require just 50 percent approval from both houses, plus Gov. Kate Brown’s signature.

The cap-and-dividend option would leave the constitution’s restriction on gas taxes untouched.

Golden said Oregon Climate is focused only on one goal: pricing carbon and redistributing the proceeds evenly among Oregonians.

“There’s no better time than right now,” he said. “Except for years ago.”

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  • Granpa February 26, 2015 at 11:48 am

    Yes, a carbon tax! Of course this is only a sliver of what is needed. It is evident that humans are exceeding the carrying capacity of the planet. The entire world social order and the basis of the world economy are founded on energy sources and behaviors that are poisoning the planet. Globally, Moneyed interests are buying influence protect their positions and prevent changes that could benefit the planet. The whole of the issue is of a magnitude that is so great, so massive and the degree of change needed to counter environmental decline is so overwhelming that the default position of leaders, world-wide, is to do nothing.

    Go Oregon and display some leadership! In and of itself that will do little to counter the momentum of humanities’ inertia, but a journey of 1000 miles begins with one step.

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    • paikiala February 26, 2015 at 12:19 pm

      Good thing Portland is so far from any other sources of cheap gas!/snark

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  • Adam H. February 26, 2015 at 12:08 pm

    This tax would not be regressive since you’d receive a refund cheque in the mail.

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    • David T. February 26, 2015 at 5:34 pm

      I agree that this tax would not be regressive, and that it is a great idea for the cities in our state. However, I worry about the inordinate impact this could have on rural communities and farmers in our state- in places and industries where biking or walking are not an option, and public transit is unavailable, this tax will have a far more dramatic impact. Because of that, I hesitate to refer to this as a “fair tax.”

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      • Adam H. February 27, 2015 at 10:25 am

        I see your point, but I think the idea behind this tax is partially to discourage driving everywhere and get those communities to work towards more options other than driving. At the very least, people can carpool.

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  • paikiala February 26, 2015 at 12:17 pm

    Though not necessarily a bad thing, doesn’t this system have the same problem as a gas tax?
    As people and businesses shift from higher to lower carbon energy sources, the revenue generated goes down. It is likely to go down faster than the fee increases, reducing carbon output as intended, but those checks are likely to keep getting smaller.

    Also, I don’t forsee local governments having to pay the new fee, since other taxes collected from tax payers only to be sent back out via fuel costs seems curiously circular. And if the local government fleets aren’t subject to the new costs of business…

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    • Gary February 26, 2015 at 2:04 pm

      The money is simply returned to tax payers. There’s no revenue from it, so no loss if that shift occurs (forcing that shift is the whole point of it).

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    • 9watts February 26, 2015 at 8:51 pm

      “As people and businesses shift from higher to lower carbon energy sources, the revenue generated goes down. It is likely to go down faster than the fee increases, reducing carbon output as intended, but those checks are likely to keep getting smaller. ”

      In short, no. I think you may not realize that the point with these systems is not raising funds but discouraging activities we can no longer afford; the Fee & Dividend is a mechanism for incentivizing people to shift their behaviors.

      “British Columbia successfully rolled out a fee and dividend scheme in 2008. Per capita consumption of petroleum fuels in the province fell by 17.4 percent… while petroleum fuel use grew by 1.5 percent nationally over the same period.”

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  • Dave February 26, 2015 at 12:38 pm

    As a non-Oregonian observer, this seems like a much better idea than that dumb income tax kicker–maybe the carbon tax rebate could get rid of that!

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    • Pete February 26, 2015 at 2:18 pm

      I remember in my Oregon years getting the tax kicker checks and thinking “wow, I bet it cost them more than this to send me this check!”. Unfortunately there wasn’t any way I could elect to have the minuscule amounts stay in the coffer they came from and save the administrative overhead.

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    • meh February 26, 2015 at 2:22 pm

      The kicker keeps them honest. They had a budget and they had more money then budgeted for. So give it back to those whose money it was.

      You don’t want to keep it, you can always give more to the state if you want.

      I prefer that the government have controls on their spending. City of Portland wants more money yet every year they seem to find $10M here, $17M there.

      Every cent of it is other peoples money.

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  • JNE February 26, 2015 at 1:21 pm

    Cyclist buying a gallon of gas = most random stock photo.

    I don’t get it.

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    • Gary February 26, 2015 at 2:05 pm

      Proof that bike users pay for roads!

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      • q`Tzal February 27, 2015 at 9:08 am

        You mean the property taxes I pay that get spent on roads don’t count?

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    • Pete February 26, 2015 at 2:18 pm

      It’s for the 2-stroke lawnmower back in the garage at home.

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  • caesar February 26, 2015 at 1:36 pm

    Devil will be in the details. What will be the formula for calculating any given citizen’s carbon footprint and resultant tax? Miles driven? Car(s) owned? Or will all the taxes be collected just by increasing fuel costs?
    Either way, if one must own a car, this would be another good reason to own an electric one. And I’ll save my yearly dividend checks for a down-payment on one of those $20k Specialized roadie bikes…

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    • meh February 26, 2015 at 2:23 pm

      And will an electric cars carbon foot print include the mining of nickel in Sudbury, the refining of nickel in Russia, the manufacturing of batteries in SE Asia, and all the associated transportation involved?

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      • caesar February 26, 2015 at 2:59 pm

        I sure hope so – fair is fair!
        Saint Elon has new green battery technologies in the pipeline, though, just you wait. I have it on good authority that this is true….

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        • 9watts March 15, 2015 at 10:46 am

          Not sure about ‘Saint'(?) Elon, but here are two books for you about the difficulties of developing the elusive battery.

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        • 9watts March 15, 2015 at 2:53 pm

          And one more for you:
          “But when all the carbon emissions associated with building and driving electric and high-mileage gasoline cars are included in the analysis, the all-electric advantage goes up in smoke. In the vast majority of states, the significant carbon debt associated with the production of electric car batteries outweighs recent reductions in carbon emissions from power generation and efficiency improvements of some electric vehicles.”

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          • SteveG March 15, 2015 at 3:27 pm

            This may be of interest. It’s not about EV “cartopia.” It’s about driverless chartering.

            It’s from the Rocky Mountain Institute, which is all about energy efficiency. It’s about what happens when Car2go-like shared cars are married with driverless car technology. Some results: 90% fewer cars are needed, because there’s a constantly-circulating fleet of ultra-safe, very light, electric driverless taxis. And driverless busses. And a lot more room for people, housing, bikes, etc.

            The key statistic is that currently, private cars are parked 90% of the time, so they waste about 50% of urban space. Imagine driverless Car2go-type vehicles that will pick you up when it’s raining and/or you’re going farther than you want to ride your bike, drop you (and your bike?) off, and then pick up someone else.

            And the cost per mile will be about a quarter of the cost of owning a private car.

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            • SteveG March 15, 2015 at 3:28 pm
              • 9watts March 15, 2015 at 3:38 pm

                “One problem that Hypercars cannot solve is that of too much driving by too many people in too many cars: Hypercars could worsen traffic and road congestion by making driving even cheaper and more attractive.”

                From Lovins’ Natural Capitalism

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            • 9watts March 15, 2015 at 3:35 pm

              From that article you linked:
              “A paradigm shift in our transportation system can drop per mile costs from $0.59 to $0.15”

              And although Amory Lovins has admitted this in the past, it seems he keeps forgetting it: if you make driving cheaper, you risk making congestion and all the other externalities associated with driving worse. Not to mention the blowback from removing the annoyances of driving. This is what you get from someone (now an institution) that sees a technical (electronic) solution to every problem. Sometimes there isn’t a technical/electronic solution. Sometimes the solution is much simpler. Figure out what steps we can take to phase out the automobile, get around without these metal boxes.

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              • SteveG March 15, 2015 at 5:49 pm

                The main impact a 90% reduction in vehicles would have on urban areas is a rapid increase in urban density, livability and safety. Why? Parked cars take up roughly 40% of all urban space, and with 9 of 10 cars gone, that space could be repurposed. The reduced traffic would also eliminate a major impediment to more density: “too much traffic and not enough parking.” More density leads to more nearby services, more walking, more biking and (let’s hope) healthier people and cities.

                I suspect we’ll still want occasional access to a shared car, but we’ll use them a lot less, and we’ll all be much better off.

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    • Pete February 26, 2015 at 2:24 pm

      Assuming of course that the carbon tax also accounts for electrical consumption from charging said electric car.

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      • caesar February 26, 2015 at 2:57 pm

        It should – only fair, don’t you think? But a few solar panels on the roof will help mitigate that.

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    • Michael Andersen (News Editor)
      Michael Andersen (News Editor) February 26, 2015 at 2:44 pm

      “Fees shall be collected at the first sale, use or distribution of each unit of fuel or each carbon emission.” I’ll add a link to the full bill in the text so folks can check out other details if they want.

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  • Glenn February 26, 2015 at 3:29 pm

    The power producing entity will have to pay more to produce power from coal/gas/etc..

    This would raise rates for consumers I assume..

    the raised rate would be different from PGE/pacific power/etc..because each produces power in different % coal/wind/etc..

    so the extra money i pay into the system because of this will not come back to me 100%
    it’s not like i can tell my power produces to give me all non-carbon tax power all the time….

    am i way off on this?

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    • brian February 26, 2015 at 4:09 pm
    • Terry D-M February 27, 2015 at 8:09 am

      I have been paying the equivalent to a carbon tax for my electricity for years, as well as my natural gas usage. We have that option to “opt in” in Oregon to the carbon market. The extra cost is minimal to me, but I have spent money over the years modernizing my home so it does not take very much to heat. I also invested in the most efficient, and expensive, water heater I could find to lower my natural gas usage. It is 3.5 years old, is now making money for me every month even with the carbon off-sets. The savings paid for the investment at the three year mark and it has an estimated 20 year lifespan. So yes, it may raise rates a little. The BIG carbon users would feel it, but since we have such a high hydro-power generation baseload out here in the NW, and we only have ONE coal fired power plant in the state (scheduled to close in 2017 I think) then the costs to the consumer are small. Assuming you are not an energy hog…

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  • Mossby Pomegranate February 26, 2015 at 7:24 pm

    Well…anyway to separate taxpayers from their money.

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    • 9watts February 26, 2015 at 8:45 pm

      You don’t appear to understand how this works. No one is being separated from their money, per se. Those who insist on continuing to consume more than the average quantities of fossil fuels going forward will contribute the amount of the tax on that extra share, which will then go to those who consume less than the average, whose checks are larger than the extra fees they paid during that period. British Columbia (which does extract and sell fossil fuels within its borders, which makes their situation a little easier to understand) has been doing this for some time. They call it Fee and Dividend. It is an ingenious system. And the best part about it, which several commenters above misunderstood, is its dynamic aspect: With predictably increasing prices anyone can figure out what makes sense (financially) going forward and can adjust, will be rewarded in direct proportion to how much they adjust their patterns of energy use. This was the most glaringly dumb thing about the Street Fee – it provided no useful positive feedback to anyone, no mechanism by which to reward the kind of behavior that saves everyone (including the City) money, and penalize those behaviors that costs everyone.

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    • Garrett D. February 26, 2015 at 8:48 pm

      You must not have read the part about the money being refunded to taxpayers.

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  • MattB February 26, 2015 at 8:56 pm

    Sounds pretty silly to me, take my money just to give it back in the form of a rebate. Believe it when I see it. Punish rural folks for no reason. In the end it is just another tax and income redistribution scheme. Boy, what could go wrong.

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    • 9watts February 26, 2015 at 9:03 pm

      “Punish rural folks for no reason.”

      let’s check with the folks in British Columbia before going all Chicken Little, why don’t we?

      ‘Fee-and-dividend, in contrast, is a non-tax. The fee collected at the first sale of oil, gas and coal in the country does increase the price of fossil fuel energy. But 100 per cent of the fee is distributed monthly to the public as electronic deposits to the bank account or debit card of all legal residents, with half shares for children, up to two children per family… By the time the fee reaches $115 per ton of carbon dioxide (equivalent to $1 per gallon of gasoline) the dividend will be $2,000–$3,000 per legal resident per year – $6000–$9,000 for a family with two or more children… People who keep their carbon footprint smaller than average will make money. The fee will rise gradually so people have a chance to choose more efficient vehicles, insulate their homes, and so on. The dividend will help people afford these investments. Jobs will be created as society retools the economy from high–carbon to low.’

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      • Terry D-M February 27, 2015 at 8:14 am

        As I told you about the last time we talked street fee and you kept whining about raising the gas tax……and I kept saying “British Columbia is doing fine with a Carbon Tax.”

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  • Jeff Bernards February 26, 2015 at 10:20 pm

    I’m going to use my “dividend” to pay the carbon tax, so what’s the point of all this? The money should be used to further reduce our carbon foot print, bike lanes, mass transit and god forbid we maybe quit borrowing money (the national debt) and actually pay for the stuff were getting. There’s no free money.
    We trade with Europe and they compete with us, using $8 & $9 gas, so it won’t end the world just raising the gas tax. Use the money productively and not consummately.
    It’s like people are having to be bribed to do the right thing for the planet. Sometimes money is the only thing that gets peoples attention about an issue. Cap and Trade? were need to reduce, not justify more pollution. Call it a Carbon Tax, but let it be a Gas Tax.

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    • 9watts February 27, 2015 at 7:48 am

      “The money should be used to further reduce our carbon foot print, bike lanes, mass transit ”
      I hear you, Jeff, but let’s not forget that we already have bike lanes and mass transit. In principle—and I think BC’s seven years into this experiment bears this out—the shift in demand from driving to other means of getting around is what we need more than money. Don’t we often here find ourselves lamenting that more people don’t bike, that there is safety in numbers?

      “There’s no free money.”
      That may be true, but this proposal is so ingenious I think we should give it a fair shake, remain open to the possibility that it is a HUGE step in the right direction, is head and shoulders above anything we’ve hear proposed around here (Oregon) in years, perhaps decades.

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      • Terry D-M February 27, 2015 at 8:12 am

        These Carbon tax proposals are what I have been say we need, and been arguing with you about for years…Mr OBSESSED WITH THE GAS TAX.

        I am glad you like it.

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        • 9watts February 27, 2015 at 8:18 am

          I’m not obsessed with the GAS TAX; I was incensed by the idiocy of the STREET FEE. I’ve mentioned the Fee and Dividend here at least as often as you. And I’m glad to see it getting some exposure. Any measure that incentivizes the climate neutral behaviors and penalizes the climate-destroying ones is welcome in my book.

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  • Electric Mayhem February 27, 2015 at 4:17 pm

    One of the businesses that would be hurt by this is farming. There are not really many lower carbon ways to produce food for large farming operations. This could have the consequence of pricing Oregon farm goods so that they are not competative.

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    • Eric February 27, 2015 at 7:08 pm

      Biodiesel, pastured livestock, sustainable farming, etc. Any business being hurt by this is currently being subsidized by cheap energy at the cost of our children’s environment. Fair is fair. Of course, we’ll need to tax imported food if its carbon hasn’t already been accounted for.

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    • Trek 3900 February 28, 2015 at 12:37 am

      Whether Oregon farm product prices are competitive or not, what will happen is that your food bill will go up if this spreads across the country. In Oregon it will just hurt Oregon products like beer from micro-breweries, etc. NOOOOOOO, don’t make beer more expensive!!!!!

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  • Trek 3900 February 28, 2015 at 12:34 am

    The idea that 27 cents per gallon tax on gasoline will have any impact on gasoline usage is laughable and speaks volumes about the lack of thought that went into this proposal. Not long ago gasoline was over $1/gallon higher than it is today and it did not make an iota of difference in the consumption.

    However, this proposal WILL give Republicans a better shot in 2016 in Oregon and that is a good thing.

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    • Michael Andersen (News Editor)
      Michael Andersen (News Editor) February 28, 2015 at 8:10 am

      Good point about the small price impact, but keep in mind that the 27 cents figure is just in year 1. In their proposal the carbon tax would keep going up (and the offsetting dividend would keep increasing) 33% every year.

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      • Trek 3900 March 1, 2015 at 4:24 pm

        And the cost of your food and other products you buy, all delivered with fossil fuel powered trucks, will go up in price by that same 33% each year. I don’t consider that a good thing, thank you very much.

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  • SteveG February 28, 2015 at 9:49 pm

    This is great proposed legislation. It doesn’t choose winners or losers, but it raises the price of what we want less of (carbon emissions) while making carbon-free alternatives relatively less expensive. Also, by rebating the all of the proceeds, in equal checks, to every Oregonian, it gives everyone a nice slug us extra income once a year.

    It’s just like the Alaska Permanent Fund, but rather than encouraging oil exploration, it encourages energy efficiency and renewables. And it also doesn’t “feed the beast,” so even a few R’s might support it.

    From my perspective, the legislation’s only real flaw (if you can really call it that) is that it doesn’t have a constituency with a lot of high-paid lobbyists, so its’ passage depends entirely on grassroots support.

    Let’s do this, Oregon!

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  • Trek 3900 March 1, 2015 at 12:28 am

    This legislation was given a big thumbs down by environmental groups familiar with it in an Oregonian article today, FEB 28. Front page.

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    • Michael Andersen (News Editor)
      Michael Andersen (News Editor) March 2, 2015 at 8:48 am

      Thanks, Trek – got a link? You’re not talking about this article, are you? That’s about a different proposal, and one of the groups quoted as opposing it is the policy director of this proposal who’s also quoted above.

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  • Trek 3900 March 1, 2015 at 4:22 pm

    Check out this story in today’s Oregonian about Solar Power in Oregon. Read the comments. Think about how those comments concerning waste, fraud, abuse and criminal activity might apply to the carbon tax proposal:

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  • SteveG March 2, 2015 at 12:46 pm

    Trek 3900-

    Forgive me, but I don’t think you’re understanding the proposed legislation.

    Those comments about waste, fraud, etc. WOULDN’T apply to this program. That’s the main appeal: 100% of all revenues raised would be required, by law, to be rebated to every Oregonian. So special interests like those cited in the Oregonian article wouldn’t, for a change, be waiting with their hands out.

    You’re right that it would raise the price of everything that has carbon-based energy embedded in it. That’s precisely the point. Products made with less embedded carbon in them would cost RELATIVELY less than products that have more embedded carbon emissions. Similarly, driving an electric car would become much more (relatively) cost effective.

    Everyone would get the clear market signal: carbon pollution is expensive and has real (currently hidden) costs, so do less of it.

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  • Trek 3900 March 2, 2015 at 4:41 pm

    Quote: “Products made with less embedded carbon in them would cost RELATIVELY less than products that have more embedded carbon emissions.”

    This would not be feasible simply because the calculations required to determine what the carbon emissions are for each product would require a bureaucracy larger than that of the IRS. For example, the carbon footprint of an electric car is huge, and it isn’t zero for a bicycle.

    This proposal is a non-starter.

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    • 9watts March 2, 2015 at 5:34 pm

      “This would not be feasible simply because the calculations required to determine what the carbon emissions are for each product would require a bureaucracy larger than that of the IRS. ”

      Au contraire. No bureaucracy is required for this at all. We don’t have or need a bureaucracy to pass along to the final consumer the prorated cost of gasoline that is a component of nearly all products we buy today, or the price of advertising or insurance. This is how our economy is set up.

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  • SteveG March 2, 2015 at 6:15 pm

    A bit more color re. how it would work:

    As the draft “Fee and Dividend” legislation is written, the tax would be levied not at the product level, but at the point of entry for carbon-based fuels. So natural gas and oil would be taxed as it enters the state, as would electricity, based on the carbon-intensity of the power entering the state. Hydropower from BC wouldn’t be taxed; coal-based power from Wyoming would.

    The other approach (called “Cap and Dividend”), which has also been introduced as draft legislation, would cap total statewide carbon emissions, and require every covered entity (utility generation plants, cement factories, transportation fuel importers and other major emitters) to buy, at auction, sufficient permits to cover their emissions. Those that are able to reduce their emissions would have to buy fewer permits. Over time, the cap would be lowered. But every covered entity would have a financial incentive to become less carbon-intensive via efficiency, fuel switching, etc.

    None of this is groundbreaking. Carbon taxes are levied in Vancouver, BC, Sweden, Boulder, CO and many other jurisdictions. The Cap system has been in effect for several years in Japan, Korea, New England, California and Europe. Even China is in the process of creating a Cap & Trade system, and although these systems had early teething problems, there’s nothing particularly difficult or groundbreaking about them.

    The one thing that sets Oregon Climate’s draft legislation apart is that all of the revenues generated — whether from a tax or from the auctioning of permits under a cap — would be rebated to every Oregonian with a social security number.

    So it would tax the bad stuff, and rebate all of the money to every Oregonian. Green and progressive, because people who burn less fuel (i.e. especially the poor, who tend to live in smaller homes and ride transit and bikes more) would pay less.

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    • 9watts March 2, 2015 at 6:24 pm

      Yes. And just to home in on a small point you touched on at the end:
      “people who burn less fuel (i.e. especially the poor, who tend to live in smaller homes and ride transit and bikes more) would pay less.”

      Because the check everyone would get at the end of the month would be the same, those who pay less than the average would ‘make’ money under this proposal.
      Let’s imagine the average check (total carbon charges for the state that month, divided by the population) is $100. This would also be the per person average amount paid into the system via those taxes. But if you bike and take transit, never mind heat with wood or grow your own food, you might only pay $20 in taxes on fossil fuels that month. So you come out $80 ahead.

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    • Michael Andersen (News Editor)
      Michael Andersen (News Editor) March 2, 2015 at 10:26 pm

      Either of you guys have any information about whether any of the jurisdictions Steve mentions makes any effort to estimate the embedded carbon of imported products? Trek (like Electric Mayhem above) makes a fair point that if this were not done, it’d put a burden on local carbon-intensive products like wheat or cement, while presumably allowing imported wheat or cement to contain lots of embedded carbon.

      Gradually driving carbon-intensive manufacturers and farms out of our economy might be good for the economy in the long run, of course. But that’s what we’d be doing.

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      • 9watts March 3, 2015 at 7:04 am

        That is an excellent question.

        Here’s one answer:
        “The carbon fee and dividend (CFD) concept is designed to discourage nations like China from producing cut-price CO2-intensive goods at the expense of American businesses and the climate. It charges WTO-compliant import fees on products from countries without comparable carbon pricing. These border adjustments help level the global playing field, while inducing other countries to adopt comparable carbon pricing.”

        And the article is interesting on other fronts as well:
        “CFD’s dividend has another important impact: it actually boosts the economy. Regional Economic Modeling, Inc. (REMI), a prestigious non-partisan economic modeling firm (whose clients range from the NFIB to the NEA), produced an in-depth study of CCL’s CFD proposal. After ten years, CFD [applied to the US] would yield a net 2.1 million increase in jobs while reducing CO2 emissions by 33 percent, compared to the baseline case. After twenty years, that jumps to 2.5 million jobs and a 52 percent overall CO2 reduction.”

        And here’s an article that references a detailed report on British Columbia’s experience (for Trek3900).
        “One thing that is surprising is that the reductions in fuel use have been nearly five times bigger than economic theory would predict from increase in prices caused by the carbon tax.”
        and “As far as anybody can predict anything in politics, it appears that the carbon tax is here to stay and that political opposition to it is negligible.”

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      • 9watts March 3, 2015 at 7:19 am

        However, referencing the British Columbia experience, these folks note:

        “Emissions which are embedded’ into a non-energy good or service produced outside of the province and imported to be sold within are not estimated or taxed, and non-energy goods or services produced inside the province for export are not refunded for the carbon tax paid to produce them. That is, in the interest of policy simplicity, there is little attempt to enact ‘border tax adjustments’ for non-energy embedded emissions.”

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  • Trek 3900 March 2, 2015 at 10:07 pm

    WOW! This has got to be near the top of the bad ideas for reducing use of fossil fuels. A increase in the gasoline tax would be much more fair and less costly to administer – it hits you every time you buy gas/diesel/etc – you will THINK about your consumption.

    This is just feel-good baloney that will accomplish nothing good, but will likely have significant negative unintended consequences.

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