2. Mission
• The Oregon Business Alliance for Climate (The Alliance) is a
statewide organization focused on mobilizing industry
support and business leadership toward advancing climate
policy and instituting a price on carbon emissions while
strengthening Oregon’s economy.
• The Alliance’s mission is to provide a forum for Oregon
industry leaders to collaborate on policy and business
engagements aimed at promoting investment, job creation,
competitiveness and economic growth towards Oregon’s
low carbon economy.
3. Overview
• Formed in June 2017
• Currently have 70 members (mostly large to medium)
from across the State and eleven board members
representing some of Oregon’s main industries and
leading businesses.
• Some profiled members include: Vigor, Skanska, Three
Mile Canyon, Rose City Disposal & Recycling, Cypress
Creek Renewables, Pacific Ethanol, Deschutes Brewery,
New Seasons, Willamette Valley Vineyards, Pacific AG,
Dutch Bros, Uber, Moda, Providence Health, EC
Company and the Timbers /Thorns to name a few.
4. Key Policy Principles
• Will reduce Oregon’s emissions through a well-designed market
based carbon pricing program
• Aligns with state climate goals
• Maintains the viability and competitive health of existing Oregon
businesses
• Anticipates pricing and regulation flexibility that will adjust over
time as policy matures and climate goals are achieved
• Mitigates impacts on low-income communities, communities of
color, and rural communities.
• Puts Oregon in a position to advance clean energy alternatives and
contribute to worldwide efforts to decarbonize the global economy
• Encourages linkage to carbon markets in other jurisdictions
• Ensures a distribution of program proceeds that drives innovation
and economic growth while helping those most vulnerable.
6. Market-Based System:
• Regulates and reduces GHG emissions at the source with the lowest cost option
• About 100 Oregon companies that emit 25,000 metric tones of CO2e are
regulated
• Regulated entities have three options for managing their emissions liability
1. Reduce internally
2. Purchase state issued allowances (permits)
3. Purchase project-based emission reductions outside of the cap (offsets)
• Proposed start date of 2021 and cap declines over time
• Aligns with Oregon’s GHG targets
• Key consideration for linkage with other jurisdictions including CA, Ontario and
Quebec
• Reinvestment model based on revenue generated from allowance auctions
7. Cost Containment Mechanisms
Cap and Invest offers flexibility and cost
containment mechanisms for regulated entities
– Linkage
– Price floor
– Price ceiling
– Offsets – 8% of total emissions
• Key for addressing competiveness and leakage
11. Northeastern States Experience: increased
economic growth, decreased emissions
Carbon pricing studies in Oregon have shown economy keeps growing. (NERC Carbon Tax study
and DEQ GHG Market study)
12. What does Oregon’s Plan look like?
• Revenue (up to 700 M per year) will be generated from
first allowance auction in 2021
• Key Assumptions:
– 83% of Oregon's emissions are covered
– The allowance price is the floor price set for the auctions.
– ~ 50% of industrial emitters are assumed to be treated as
"energy-intensive, trade exposed" facilities and will receive
some free allowances.
– 5% of allowances are set aside in a reserve.
– Utility revenue
– 45-50% of allowance revenue will go back to
transportation funds.
13. Where will all that money go?
• Revenue from transportation fuels and
Utilities consignment restricted
• Remaining auction revenue allocated to
Climate Investment Fund:
– 15 % off the top allocated for Just Transition Fund
– 60 % Impacted Communities of which 1/3 will be
dedicated to rural
– 20 % towards investments that increase carbon
sequestration on working lands
– 20 % projects that reduce GHGs in OR
14. What’s the latest in Salem?
• Carbon Pricing Policy has been on leg table for
over a decade
• Extensive research and drafting in 2017 session
• Working Groups formed in fall of 2017
• Outcomes from Working groups resulted in
Senate and House Bill drafts released January 8th
• Lobbying currently underway with business
engagement
• Short Session February 5 to March 9, 2018
• Filing day March 6, 2018
15. What’s the difference between the
two bills?
• Allowance Allocation for Utilities
• EITEs
• F - gases
• Offsets %
• Governance Structure
• Climate Investment Fund
• Impacted Communities – Rural and Urban
Cap and trade
Market based system that first originated in addressing acid rain under the clean air act in 1990
Economy wide cap on emissions sources that offers a flexible mechanism at the lowest cost for reducing GHG
A cap is established that aligns with GHG targets – 25
Companies that are regulated have three options – reduce, buy allowances or offets
State auctions allowances and companies that fall under the cap can then buy or trade allowances
Reinvestment occurs thru auctions
Over time the cap lowers to drive more aggressive targets
Not a novel idea.
Many states, countries and large companies are adopting carbon pricing
WCI linkeage
Trading partners
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%.