The BC recipe for carbon pricing looks something like this: Take a carbon tax and mix it with corporate and personal income tax reductions; keep it simple; slowly shift the tax burden from income to carbon pollution over time.
Is Oregon the next place this dish will show up on the menu? Governor Kitzhaber is running for re-election on a platform that prominently includes tax reform. “It’s got to be on the agenda,” he told state business and labor leaders, “and it’s my intention to put it squarely on the table.” Kitzhaber has not yet committed to proposing a carbon tax, but he’s considering it.
Last year, the legislature in Salem passed a study bill specifically focused on “the feasibility of imposing [a fee or tax on greenhouse gas emissions] as a new revenue option that would augment or replace portions of existing revenues.”
The study itself will not be completed until November, but the state has awarded the contract to Northwest Economic Research Center (NERC), headed by Portland State University economics department chair Tom Potiowsky, who previously spent a decade as the Oregon state economist. NERC has already conducted a preliminary report on carbon pricing in Oregon.
The key takeaway from that report was that environmental tax reform can benefit the economy and reduce emissions. “The report shows that putting a price on carbon in Oregon can result in reductions in harmful emissions and have positive impacts on the economy,” it says. Elsewhere, it notes, “[A] BC-style carbon tax and shift could generate a significant amount of revenue and reduce tax distortions while creating new jobs and reducing carbon emissions. The specifics of the tax shift program are key to ensure equitable distribution of costs and benefits, as well as preserve the strength of the price signal.”
Here are some targets to keep an eye on as the state moves forward:
