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‘Cap and invest’ proposal short on specifics

Without specific information, we are asking businesses, including agriculture, to pay an unknown price for an unknown outcome.

Published on December 14, 2017 9:52AM

A recent presentation to the Oregon Board of Agriculture on a new “cap and invest” effort under study by Democratic leaders in the Oregon Legislature and Gov. Kate Brown’s administration provided more questions than answers.

“Governor Brown wants to decarbonize the Oregon economy,” said Kristen Sheeran, carbon policy adviser for the governor.

Though details were lacking, the plan would take money from companies that exceed a state limit on emitting greenhouse gases such as carbon dioxide. Such companies would include fuel and electricity providers.

The money collected from those companies would go to other companies that keep carbon emissions below the cap the state sets. The state could also sell emission allowances to the offending companies and spend the money to build better roads and offset the effects of higher electricity and natural gas prices, she said.

The state could also spend the money to decrease or offset carbon emissions, which could benefit agriculture. Farmers and ranchers wouldn’t be regulated as emitters under the current proposals, Sheeran said.

Among the questions generated by the presentation were:

• How much, exactly, would Oregon’s cap and invest program reduce global temperatures? Ten degrees? Five degrees? Less? More? We assume that’s the goal of any effort to limit greenhouse gases, so we need to know the answer to that threshold question first. Some groups say their proposals wouldn’t necessarily stop climate change. Instead, it would slow it. In that case, how much would the governor’s plan slow climate change?

• How much, exactly, would the cost of gasoline, diesel fuel, natural gas and electricity increase under the plan? Nearly all Oregonians — including farmers and ranchers — buy fuel and electricity, so any increase would be important to know at the outset of such a program.

• Oregon farmers and ranchers transport their crops and livestock all over the West and the rest of the world. How much would those costs increase?

• What would the impact be on food processors and lumber mills, which farmers and ranchers rely on?

• What would the impact be on fertilizer manufacturers and suppliers?

Similar programs have been adopted or proposed elsewhere. We have not yet seen proof of how much they are reducing global temperatures, either. In a recent report California determined its “cap and trade” effort had reduced the state’s carbon emissions by 1.5 percent in 2015. The report did not specify how much that will decrease the global temperature.

While there are plenty of computer models, there also needs to be hard evidence directly related to these programs. Without such information, we are asking businesses, including agriculture, to pay an unknown price for an unknown outcome.

There’s an old saying in investing: Never make an investment until you completely understand what you’re getting into. It’s true on Wall Street — we’ve seen that proved time and again — and it’s true when considering Oregon’s “cap and invest” proposal.


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