Michael Dembrow

Democrats Address Climate Change with Carbon Caps, Modernized Infrastructure

Democrats in the Oregon legislature and Congress will be pushing legislation to cap carbon emissions, including from transportation, which is the largest source of greenhouse gas emissions. Oregon lawmakers will consider a cap and trade proposal, while Oregon Congressman Peter DeFazio presses for a $500 billion federal investment in modernized infrastructure.

Democrats in the Oregon legislature and Congress will be pushing legislation to cap carbon emissions, including from transportation, which is the largest source of greenhouse gas emissions. Oregon lawmakers will consider a cap and trade proposal, while Oregon Congressman Peter DeFazio presses for a $500 billion federal investment in modernized infrastructure.

The Oregon cap and trade legislation was unveiled last week.  Oregon Public Broadcasting  provided a glimpse into its details.

The Oregon cap and trade legislation was unveiled last week. Oregon Public Broadcasting provided a glimpse into its details.

(Updated February 1, 2019)

While the big event in the 2019 Oregon legislative session is sure to be a $2 billion revenue package for schools and an industry-supported Medicaid package, the first major legislative thrust by Democrats will be a cap and trade bill designed to put a lid on carbon emissions. A key Oregonian in Congress is also pushing for a major response to climate change.

The bill is expected to surface by the end of the week. Its chief architect, Senator Michael Dembrow, D-Portland, says the measure will be very similar to a previously introduced bill, but with more clarity on issues such as oversight, mitigation for vulnerable industries and how quickly the emission cap will decline. Republicans are grumbling they haven’t seen evolving drafts since late last year.

Not surprisingly, Dembrow predicts a “noisy few weeks” when the Joint Committee on Carbon Reduction, which he co-chairs, considers the controversial measure, called the Clean Energy Jobs Bill.

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Environmental groups expect a cap and trade bill will pass this session. Governor Brown and Democratic legislators vigorously campaigned in support of climate change legislation. Brown's budget framework, released late last year, detailed the creation of a Carbon Policy Office, with a $1.4 million budget, that has been charged with exploring how Oregon can reduce its greenhouse gas emissions while still growing the state’s economy.

State Senator Michael Dembrow, D-Portland, and Oregon Congressman Peter DeFazio will be on point with legislation to address climate change. Dembrow co-chairs the committee to take up a cap and trade system that seeks to limit carbon emissions, including from transportation fuels. DeFazio is floating a measure to invest $500 billion to modernize the nation’s transportation system and reduce carbon emissions, while increasing resiliency in highways, tunnels and bridges.

State Senator Michael Dembrow, D-Portland, and Oregon Congressman Peter DeFazio will be on point with legislation to address climate change. Dembrow co-chairs the committee to take up a cap and trade system that seeks to limit carbon emissions, including from transportation fuels. DeFazio is floating a measure to invest $500 billion to modernize the nation’s transportation system and reduce carbon emissions, while increasing resiliency in highways, tunnels and bridges.

The basic idea is to set a fixed limit on greenhouse gas emissions and issue allowances that can be traded in an open market, which currently includes seven states and four Canadian provinces. The greenhouse gas emission limit would ratchet down over time.

The Environmental Defense Fund anticipates Oregon’s cap and trade bill will parallel a similar structure in California that extends to transportation fuels as well as regulated electricity and natural gas utilities.

As Oregon lawmakers hack away on climate change legislation, Oregon Congressman Peter DeFazio, who chairs the House Transportation and Infrastructure Committee, is preparing to push for a $500 billion investment to address crumbling US infrastructure, support “green” infrastructure that is more resilient to climate change and develop cleaner fuels. Among other funding, DeFazio proposes issuing 30-year bonds paid for by indexing the federal gas tax to inflation, which he says could generate between $17 to $20 billion per year to invest.

He wants the House to pass a version of his legislation in the next six months and it appears House Democratic leaders support his push.

DeFazio told Curbed in an interview there is a $102 billion backlog to repair America’s metropolitan transit systems and that critical transportation routes such as the Holland Tunnel in New York and the I-5 Columbia River Bridge could be wiped out by flooding or earthquakes, causing economic catastrophes.

Curbed observed, “[DeFazio] takes control of the Transportation and Infrastructure Committee during a pivotal time when technology advances, long-term funding issues and climate change demand a comprehensive, forward-thinking plan.”

In quintessential DeFazio fashion, he said, “I’m going to approach it from a very hard-hearted way: Boy, you’re stupid if you don’t make these investments.”

 

Lawmakers Divide Up Work on Cap-and-Invest Legislation

Majority Democrats have set up work groups with the ambitious aim of bringing a cap-and-invest program to the short 2018 Oregon legislative session that starts in February.

Majority Democrats have set up work groups with the ambitious aim of bringing a cap-and-invest program to the short 2018 Oregon legislative session that starts in February.

Oregon legislative Democrats announced this week formation of a series of work groups tasked with creating a cap-and-invest program in Oregon. The work groups stem from a series of hearings near the end of the 2017 legislative session when Senate Bill 1070 was unveiled. While the bill didn’t receive a committee vote, it laid the groundwork for what is expected to be the front-and-center issue of the 2018 session.

At a joint hearing of the Senate Environment and Natural Resources Committee and the House Energy and Environment Committee, chairs Senator Michael Dembrow and Rep. Ken Helm announced four subcommittees that will hold hearings around the state this fall:

  • Agriculture, Forest, Fisheries, Rural Communities and Tribes (chaired by Helm);
  • Utilities and Transportation (chaired by Senator Lee Beyer);
  • Regulated Entities (chaired by Dembrow); and
  • Environmental Justice and Just Transition (co-chaired by Reps. Diego Hernandez and Pam Marsh).

The stated goal of these subcommittees is to redraft SB 1070 for the 2018 session.

A cap-and-invest program is an evolution of a cap-and-trade system, which sets a hard cap on greenhouse gas (GHG) emissions. The regulating entity then sells permits that companies can purchase, allowing them to emit a certain amount of GHG. For example, if a state allows 10 million tons of greenhouse gas emissions annually, the state would sell 10 million one-ton permits, which companies could buy in a marketplace.

Cap-and-invest takes process a step forward, requiring the state to use the funds generated by the sale of permits to fund certain programs. These programs are usually dedicated to reducing GHG emissions.

Both cap-and-invest and a carbon tax set a price that companies pay for GHG emissions. While cap-and-invest sets an emissions limit and allows the market to set the price for the credits, a carbon tax simply sets a price for GHG emissions while neglecting to cap emissions. The cap-and-invest model has several advantages, incuding emission reduction certainty, and revenue to invest in new programs.

Dembrow and Helm are modeling their legislation after a similar program in California. The program was renewed with a bipartisan vote and recently endorsed by the California Chamber of Commerce. According to Dembrow, the program would allow the state to meet its emission reductions goal by 2050.

The work groups – consisting of legislators, advocates and industry representatives – met for the first time last Thursday, with each group meeting for two hours.

In what figures to be a knock-down, drag-out fight during the upcoming session, majority Democrats are driving the process with Republicans in both chambers participating in the opening round of work group meetings. They may have an incentive to participate in crafting of the legislation given that many observers expect Democrats to pick up a seat in both the Senate and House in the 2018 elections, giving them a supermajority in the 2019 session. That would allow Democrats to pass a carbon tax, for example, in the 2019 legislative session without Republican votes.

Democrats are mimicking the process used to sculpt the successful 2017 transportation package – gathering a large group of stakeholders, divide into work groups tackling certain topic areas and crafting legislation that hopefully is bipartisan enough to move through the Capitol and avoid a referral. The inclusion of Republican support, and Republican votes, is key.

However, the transportation package took several years, dozens of statewide meetings and vocal commentary from both parties on the need for investments in Oregon's aging infrastructure prior to a long legislative session where final passage was never guaranteed. The process for cap-and-invest faces a much harder path. A short, one-month legislative session does not provide much room to negotiate or cut deals.

It remains to be seen whether this bill will result in the creation of a large new program in the state, or whether it is simply the start of a longer conversation, but it is one to pay attention to as we move closer to the 2018 short legislative session.

Further information about Dembrow and Helm’s effort can be found here.