The Oregon Environmental Quality Commission on Thursday approved a new climate protection plan for the state. It aims for a 90% reduction in greenhouse gas emissions from transportation fuels and natural gas by 2050.
The committee’s 3-1 approval vote follows years of unsuccessful attempts by state lawmakers to launch an economy-wide cap-and-trade program to reduce carbon emissions that contribute to climate change.
“It has been a huge step forward in getting this program to this point,” Commission Chair Kathleen George said after the vote. “Our fisheries, our farms, the snow in our mountains, our forests and our vineyards, it all depends on a healthy climate.”
Last year, Governor Kate Brown ordered the Oregon Department of Environmental Quality to develop a new set of administrative rules that would cap and reduce greenhouse gas emissions from fossil fuels. over time.
The resulting climate protection program caps gasoline, diesel, propane, kerosene and natural gas emissions and makes the cap more restrictive over time. The program, slated to launch in January, will distribute a decreasing number of emission credits to fuel suppliers and allow them to buy and sell these credits as the cap is lowered. It is also creating a Community Climate Investment Fund that will allow businesses to pay for emission reductions in communities most affected by climate change.
The program will initially regulate 16 fuel suppliers and three natural gas utilities as well as 13 industrial facilities that would be regulated under a different system that creates individualized plans for each facility to reduce emissions using the best available technology. The rules include financial penalties for companies that cannot meet emission reduction targets.
The companies that will be regulated under the program have protested the higher targets, arguing that they would lead to even higher prices for gasoline, diesel and natural gas which will have ripple effects throughout the world. economy. They also voiced concerns that there may not be enough alternatives to fossil fuels such as biofuels and electric vehicles to meet program goals.
Fuel suppliers are likely to face higher costs over time that are passed on to consumers. This will leave Oregonians and state businesses with two choices: reduce their use of fossil fuels or pay increasingly higher prices for them.
Industry groups did their own analysis of the program and found it to be more costly to consumers than the DEQ predicts, based on its economic analysis. Industry analysis found that the new regulations could double the price of natural gas by 2050. It would also increase the price of gasoline by 36 cents per gallon and increase the price of diesel by 39 cents per gallon. by 2035, according to industry analysis.
“There is a huge difference between the conclusions drawn by the economic analysis carried out by DEQ and that of the business community,” Commissioner Greg Addington said at the committee meeting. He expressed the committee’s only no.
While DEQ’s economic analysis found that the program would result in the creation of approximately 20,000 jobs, industry analysis revealed that it would result in the loss of 120,000 jobs. Industry analysis revealed that agriculture, wood products, manufacturing and food processing would be the most affected by rising fuel prices.
“These are alarming things to me,” Addington said. “I’m trying to find a way to get over this. In the end, I don’t know if I’ll get there. I think there are things we can do to lessen the blow to people in rural Oregon. “
Addington has advocated for adding carbon sequestration to options for companies looking to offset their emissions, so they can pay to sequester carbon in forests, for example. But other commissioners did not support his motion to add this option to the program.
“The reason we have so much carbon in the atmosphere is that we burn so much fossil fuels,” said Commissioner Amy Schlusser. “I don’t think that under this particular program it’s appropriate to allow us to continue to emit fossil fuels into the atmosphere. … We would delay reductions in fossil fuels.
Mike Freese of the Oregon Fuels Association said the local small businesses he represents fear alternative transportation fuels may not be available to meet people’s needs as the emissions cap becomes more restrictive for users of fossil fuels.
“Ultimately, the rule does not guarantee that all Oregon residents – regardless of their income level and where they live – will continue to have access to affordable fuels,” he said. .
Nicole Singh, DEQ’s climate policy adviser, responded to public comments on rising fuel prices. She said the agency would track prices in Oregon and neighboring Washington, Idaho and Nevada and look for signs that prices are rising more than expected.
If prices in Oregon increase by more than 20% of fuel prices in other states, she said, DEQ staff will conduct a review to determine if the program needs to be changed.
“It’s up to us at DEQ’s agency to look at this and find out why we’re seeing these changes,” Singh said. “Regardless of the cause of these changes, is it something that means we need to make changes to the program? “
Singh said the commission also has the power to make changes to the program if necessary.
The program was originally set for an 80% emissions reduction target by 2050. But DEQ raised that target to 90% after receiving thousands of comments from the public calling for higher targets and seeing the new recommendations from the government. International Panel on Climate Change. The approved program also set a higher interim target of reducing emissions by 50% by 2035.
“We have a more aggressive trajectory on this matter that goes beyond what Governor Brown asked us to do in his executive order,” DEQ director Richard Whitman told members of the Quality Commission. the environment. “The fundamental reason is the science that advances to go faster. In order for us to meet the goal of avoiding the worst effects of climate change, which requires us to keep the average temperature rise at 1.5 degrees Celsius, we need to reach net zero by 2050. “
Whitman said the climate protection program is “a key glue” that links other existing carbon reduction programs such as clean fuel requirements, energy efficiency programs and incentives for electric vehicles. , which will help all of the state meet its emission reduction targets.
“All of these things work together,” he said. “They are working on the supply side and the demand side to create a cheaper energy future for Oregon.”
George, the commission chairman, said six of the state’s top eight clean fuel producers are in rural areas.
“This will mean significant investments in new jobs and new opportunities for the agricultural and rural areas of the state,” she said.
Commissioner Sam Baraso said the Community Climate Investment Fund could help electrify home systems and cut spending for those most affected by rising energy prices.
“Investing directly in households, investing in energy systems that reduce our dependence on fossil fuels in a targeted way benefits us all and helps us absorb higher energy costs,” said Baraso.
Whitman said DEQ carefully designed the program to limit the percentage of emissions companies can offset by paying to CCI and to prioritize communities of color and low-income neighborhoods as funds flow. spent.
Initially, companies will only be able to reduce 10% of their emission reductions by contributing to the CCI fund, and this percentage will drop to only 20% over time.
“It is important that we can assure the public and everyone that this program will have the fundamental effect of reducing greenhouse gas emissions,” said Whitman. “That for every credit we give, we’re going to achieve these emission reductions. “