Today the Oregon Legislative Revenue Office released a report on the economic and emissions impacts of a carbon tax in the state.  The report was prepared by the Northwest Economic Research Center (NERC) at Portland State University.  The NERC study was funded by a $200,000 appropriation approved during the 2013 session under SB 306.

The NERC study modeled a number of scenarios, varying the size of the tax and the degree of revenue repatriation, to assess differing effects on greenhouse (GHG) gas emissions and the economy.  Not surprisingly, the study shows a direct correlation between the amount of the tax and the level of GHG reductions—the higher the tax, the more resulting GHG emissions.  What may be less intuitive is that the overall economic impact of a carbon tax, under all scenarios, is relatively minor.

As explained in an upcoming article in Power Magazine, which will be posted to this blog site in January, a tax should be considered among other carbon reduction strategies, including a cap and trade system.  California has adopted a combination of cap and trade and clean fuels approaches, whereas British Columbia has implemented a carbon tax.  Washington State is also considering alternative programs to reduce GHG emissions.

A carbon tax bill will likely be introduced in the 2015 legislative session, but we are unable to predict the likelihood of passage at this writing.  In addition, the Oregon legislature will be taking up extension of the existing Clean Fuels Program, which is scheduled to sunset in 2015.  We believe extension or elimination of the sunset date is likely to be enacted.