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Analysis: Oregon Climate Action Plan – Economic pain for zero benefits

By Gregory Wrightstone 6/22/19

The Oregon House recently passed the state’s Climate Action Plan establishing a state-wide cap-and-trade program to limit greenhouse gas emissions. The bill next goes to the Senate where Democrats hold a super-majority. With GOP senators unable to stop what they deem to be freedom-sapping and economically crippling legislation, they refused to attend a scheduled June 20 session to preclude a needed quorum for a vote on the bill. With the Governor now threatening to use the state police to force Senators back to their chamber, it would be a good time to look at the cold, hard facts of what this bill will and won’t do.

The very basis for the bill is based on severely flawed science, the increased costs would be economically harmful and successful implementation would have virtually no effect on temperature.

The chief architect of the historic legislation, Rep. Karin Power, stated that failing to take action would “make the planet, as we know it, uninhabitable.” She went on to say, “We are showing other states that it’s not an impossible dream to hold big polluters accountable and use the funds to invest in clean energy and in our most vulnerable communities.”

Oregon’s Climate Action Plan will impose huge costs on the state’s citizens and businesses while burdening them with additional levels of restrictions and regulations. According to the state’s Legislative Revenue Office, the bill is expected to increase gasoline prices by 22 cents per gallon in its first year, with prices rising to more than $3.00 per gallon over the next several decades. Natural gas prices are also projected to jump 12% by 2021 and by 40% by 2035.

Abandoning low-cost, reliable energy provided by fossil fuels and embracing expensive, intermittent “green” energy, as the plan proposes, is a regressive taxation scheme. Since the poor pay a higher percentage of their incomes on energy, it would harm most Oregon citizens with the lowest incomes.

Companies will pass these higher costs on to consumers or absorb the costs, which will deter hiring and new investment. A rise in prices means that consumers will buy less, and companies will drop employees, close entirely, or move to other states where the cost of doing business is lower. The consequence means fewer opportunities for Oregon’s workers, less economic growth, lower incomes, and higher unemployment.

Stimson Lumber
Stimson Lumber

Oregon’s companies have already begun laying off workers in anticipation of negative effects of cap and trade. Stimson Lumber, located west of Portland, recently laid off 60 workers owing to the predicted consequence of the bill. CEO Andrew Miller said that is was due to the “cost of doing business in Oregon” and called the state’s newest proposal “Oregon’s assault on business.”

The overarching goal of the proposal is to lower the Earth’s temperature by reducing greenhouse gas emissions in Oregon through a reduction of the state’s CO2 emissions by 80%. However, nowhere does this hefty document provide an estimate of how much temperature rise would be averted by the implementation of the bill. Should we not know just how much of an effect an 80% reduction in emissions would have on temperature?

The MAGICC simulator (Model for the Assessment of Greenhouse-gas Induced Climate Change) was developed by scientists at the National Center for Atmospheric Research under funding from the U.S. Environmental Protection Agency (EPA). The model estimates how much temperature rise would be averted globally by various reductions of CO2 for the United States. According to the model, Oregon’s 80% reduction in CO2 emissions (using climate sensitivity of 2.0) predict reductions in predicted warming of 0.0004 degrees Fahrenheit by 2050 and 0.0011 degrees F by 2100.

This extremely small — and immeasurable — effect should be a very important component in the discussions of whether or not to impose the significant burdens of the Climate Action Plan on the state and its citizens. How many lost jobs is a reduction in temperature that is measured in thousandths of a degree worth?

The justifications for imposing this plan are flawed, the costs and regulations are economically crippling, and the result is a temperature reduction so low that it is indistinguishable from zero. In short, the plan would infringe on the freedoms of people and make them significantly poorer for virtually no advancement of the sponsors’ intentions.