By Andrea Lang, Energy Fellow
Last Wednesday’s passage of SB 1547, called the “Clean Electricity and Coal Transition Act,” marked a historic first step towards reducing Oregon’s carbon footprint. The bill is the first in the nation to attempt to completely eliminate coal from a state’s electricity supply, and may be the first of many steps on the path towards getting Oregon on track to meet its goal of reducing greenhouse gas emissions to75% below 1990 emission levels by 2050. This blog explores what the bill achieves and outlines future strategies Oregon could pursue to achieve its emission reduction goals.
What does the bill do?
The Clean Electricity and Coal Transition Act contains a number of components aimed at reducing carbon emissions. To summarize, the bill: (1) requires the state’s two investor-owned utilities to eliminate coal-fired generation from their retail electricity mix in Oregon by 2035 (with an exemption for short-term wholesale purchases), (2) increases the state’s renewable portfolio standard to require that 50% of Oregon’s electricity comes from renewable sources by 2040, (3) creates a community solar program, and (4) allows utilities to propose transportation electrification projects.
What other policy options are available?
There is no doubt that the bill improves on existing policies to reduce Oregon’s carbon emissions. However, this bill should not be the “end of the line” in terms of Oregon’s actions to address climate change. In fact, when lawmakers and advocates discussed a previous and nearly identical version of SB 1547 in the Senate Committee on Business and Transportation in February, Oregon Public Utility Commissioner Susan Ackerman stated that she thought there were better policies to address greenhouse gas emissions. Specifically, she identified cap-and-trade and carbon tax policies as being effective, low-cost ways to reduce emissions in the state, and also said that she thought such policies could coexist with and supplement the Clean Electricity and Coal Transition Act.
Cap-and-trade programs, such as the program currently in place in California, work by mandating a cap on emissions, allocating emission allowances, and allowing emitters to buy and sell those allowances. By creating a finite number of tradable emission allowances, cap-and-trade policies create an incentive to reduce emissions by establishing a market for buying and selling allowances. Oregon had considered enacting a cap-and-trade policy this year, but the bill did not make it out of committee.
A carbon tax is the other obvious policy option for Oregonians to consider as a next step. This relatively straightforward policy would involve levying a per-ton tax on carbon dioxide emissions. As a result of the tax, emitters are forced to consider whether the benefits gained from emitting carbon are greater than the cost of the tax. In addition, the revenues generated could be used to offset other tax burdens, mitigate the effects of climate change, or support other efforts to reduce emissions. A Congressional Budget Office study concluded that carbon taxes can be up to five times more effective than a cap-and-trade system, but voters often find the idea of a “tax” hard to swallow, making such policies politically difficult to enact. However, British Columbia has already adopted a carbon tax, and Washington is currently considering one as a result of a successful ballot initiative.
Adoption of either of these policy options could be the next step in reducing Oregon’s carbon emissions once Governor Brown signs the Clean Electricity and Coal Transition Act into law.
Is piecemeal policy-making enough?
In addition to considering individual policies to address carbon emissions, it is time for Oregon to carefully assess whether its existing energy governance framework is sufficient to address the problems facing the state. Climate change, along with a rapidly transforming electricity system, likely necessitates a reform of the state’s energy governance. For example, New York is attempting to reform its energy system through its “Reforming the Energy Vision” (REV) initiative. The REV aims to develop a comprehensive strategy to evaluate the ways the electricity system is changing or should change, and to address those changes. As we explained in our Countdown to 2050 Report, Oregon is sorely lacking a comprehensive policy framework to facilitate the transition to a 21st century energy system. Continuing to enact piecemeal policies without adopting a comprehensive strategy and establishing an effective governance system to properly implement such policies is ineffective.
Thus, it’s important that the passage of the Clean Electricity and Coal Transition Act does not make renewable energy and climate advocates complacent. To be sure, the bill is a useful step in the right direction, but it’s only one of many steps on the path to meeting Oregon’s emission reduction goals and transitioning to a 100% renewable power grid.