Legislators return to Salem in just a few months, and Democrats are determined to pass in a six-week session a dramatic state energy policy they call “cap and invest.”
The goal is to price carbon emissions and reinvest proceeds into clean energy. But the more you learn about it, the worse it sounds to try to accomplish in a short session.
For consumers, it would likely mean paying more for pretty much everything. It would work like a hidden tax on energy. Would Oregon’s economy drop like a rock?
At least in previous proposals, the plan has been projected to bring in about $700 million a year for the state. It really makes you wonder if it’s about green energy or about the money. Either way, that money wouldn’t come for free. Again, it would have the effect of a hidden tax increase, and Democrats won’t even need to have the usual supermajority required for a tax increase to pass it.
Who would be in charge of all the new regulations? Who would decide where that $700 million gets spent? The state had to shut down the Energy Department’s green energy tax credit program because of scandal. It took the state’s Department of Environmental Quality five months to get around to doing something about suspected high concentrations of cadmium and arsenic in part of Portland’s air. Of course, every state agency is going to make mistakes. But do Oregonians feel confident about giving either agency a new regulatory regime and some of the $700 million?
Such plans also are a clear place that environmental policy runs head-on into concerns about social policy. The poor and rural Oregonians are more likely than the rich to feel the impact of the tax at the gas pump, the grocery store or on their utility bills. How will that be mitigated?
Then there’s what are called “energy-intensive trade exposed” businesses. Think Intel. They use a lot of energy. They produce a lot of carbon. They are likely to have to pay the tax.
If Oregon implements the tax, those businesses have a new incentive to pick up and move more operations to places where it is cheaper. The cap-and-invest program could become the “showing-business-the-door” program. Will there be goodies handed out for such businesses to stay? And how fair will that be to small businesses and consumers that don’t get the goodies?
As sweet as quick passage of cap and invest may sound to some Democrats, the fast lane to minority party status or losing the governor’s office is a big tax hike and another Democratic policy failure.