Information from CTUIR about the 2018 Oregon Clean Energy Bill

The following information has been provided by the Confederated Tribes of the Umatilla Indian Reserveration.

Rural and tribal communities are some of the first groups to feel the effects of climate change and the resulting impact on their livelihoods. Extreme weather, reduced snowpack and stream flow, and abnormal wildfires exacerbated by climate change are already having impacts on farm production, forest health, and the well-being of rural communities and landscapes.

An Oregon focused cap-and-invest program should provide strategic investments in rural communities and the state’s diverse natural and working lands to promote climate change adaptation, develop clean energy, support local economies, and generate new revenue streams. Doing so will sustain and enhance the natural resources sector, promote energy independence, provide job training in new industries, and enable new water saving technologies, transportation infra- structure, and affordable housing.

The most recent version of the Clean Energy Jobs Bill recognizes these needs and circumstances, and proposes an op- erating and revenue sharing structure that provides significant economic and environmental benefit to Oregon’s rural communities. The following provisions in the legislation will maximize rural input and participation in an Oregon cap- and-invest program, and harness the unique strengths in these communities and landscapes.

Rural Participation and Oversight

Rural communities and counties face particular economic disadvantages, and are among the most vulnerable to the economic and ecological disturbances that are expected to increase with climate change. A clear and extensive role for rural Oregon in program governance and administration is essential to maintain equity and transparency for an effective program.

In response, the bill establishes a Joint Legislative Committee on Climate, which will be instrumental in program rule making and annual funding recommendations. This committee will provide rural representation in the legislature, as  well as serve as a sounding board for program review and public input. The bill also establishes a Program Advisory Committee, which mandates three positions representing rural Oregon, with specific expertise in forestry, agriculture and fisheries.

Finally, the definition of Impacted Communities in the bill is improved to ensure that rural communities receive invest- ments from program revenue. The new definition identifies locales with low incomes, high unemployment, and low levels of educational attainment. This recognizes chronic challenges faced by many rural Oregon communities, and ensures that the program is designed and prioritized to generate benefits for these areas.

Dedicated Investments in Rural Communities

Over the last decade, employment in rural Oregon has declined 1.4%, compared to a 4% increase in the state’s small metros and 14% increase in large metros. While the state’s overall economic health is strong, these benefits have not been equally distributed or experienced in Oregon’s rural communities, which continue to lag behind state and national trends.

To address these economic challenges, the legislation mandates that at least 20% of the Climate Investments Fund be distributed to projects in rural communities to reduce greenhouse gas emissions and improve climate resiliency. This will have a particularly significant impact in Oregon, as 14% of jobs in non-metro counties are in the forest and agricultural sectors. Furthermore, for every $1 million invested in forest and watershed restoration, at least 15 jobs are supported. Given that one job in rural Oregon is the equivalent of over 200 jobs in urban Oregon, these investments can have a

major influence on retention and cultivation of a rural workforce. This ensures equitable participation and benefit from the state’s future economic growth and new market potential.

Dedicated Investments in Natural and Working Lands

The value of natural and working lands to Oregon’s environment, economy, and communities cannot be overstated. Not only are they the economic engine for Oregon’s rural communities and the state, but they can also make a significant contribution to reducing and mitigating climate change. Farms, forests, and ranches can adopt practices that store car- bon, adapt to the effects of climate change, improve productivity, and provide new revenue models and alternatives to the sale and development of these landscapes.

The legislation recognizes Oregon’s unique resources by dedicating 20% of the Climate Investments Fund to projects  that increase carbon sequestration and resiliency in natural and working lands, specifically in forestry, agriculture, range- lands, and coastal communities. Types of investments could include direct payments for carbon sequestration on forest and agricultural lands, water storage and transportation, easements that maintain working lands and wildlife habitat, and wildfire risk reduction to maintain forest health and sequestered carbon reserves. Proactive, voluntary approaches are also more cost-effective to the state, as front-end investments are less expensive than regulatory actions that may be required to meet future compliance obligations.

The legislation also allows for up to 8% (4% in the House Bill) of carbon reduction compliance obligations to be met    with offset purchases from forest and agricultural projects that reduce greenhouse gas emissions and maintain working lands, half of which must be invested in Oregon. Offset markets can secure significant financial leverage from the private sector, including out-of-state purchases that enhance rural economic benefits and investments. Analyses have shown that over the first ten years of a cap-and-trade program, forest carbon projects in the Western Cascades of Oregon could generate between $667 million and $1.93 billion of offset credits.

Safeguards for Rural Communities and Jobs

Working forests and agricultural lands are not covered sectors in the legislation, and are therefore not subject to the cap or costs associated with program compliance. However, these landscapes are eligible to participate in the program and secure investments for carbon-friendly practices. Not only does this provide an incentive to maintain working lands, but it also introduces new funding streams to ensure their long-term viability and resilience.

While any increases in electricity rates are expected to be extremely minor (1-2%), the legislation requires that investor owned utility revenues generated from program participation must be spent on behalf of customers to reduce energy bills. Furthermore, many of Oregon’s rural communities are in Consumer Owned Utility service areas that will not be subject to the cap and program compliance, limiting any rate increases.

Finally, in the event that unexpected job loss does occur as a result of the program, a Just Transition Fund is established, with the first 15% of the Climate Investments Fund reserved for financial support for dislocated workers and training in clean energy jobs. While no documented job loss has occurred in California as a result of its cap-and-invest program,   the Just Transition Fund serves as a backstop to mitigate undesirable outcomes in Oregon.

An Opportunity for the Future

The Clean Energy Jobs Bill proposes a thoughtfully designed cap-and-invest program that meets Oregon’s needs to combat climate change, maintain state economic health, and ensure transparent governance. It also proposes strategic investments that recognize the value of the state’s rural communities and livelihoods. These investments can not only unlock the full potential of rural areas to ensure climate adaptation and resiliency, they will also help maintain Oregon’s unique values, resources, and landscapes for current and future generations.

For more information, contact: Dylan Kruse, Policy Director, Sustainable Northwest, cell (303) 328-7524