Oregon's Cap-And-Trade Bill Clears House, Heads To Senate

A bill that would create one of the nation’s most sweeping programs to address climate change is within one vote of becoming law after it passed the Oregon House on Monday.

Following six hours of debate, a sharply divided chamber voted 36-24 to pass House Bill 2020. The bill — the highest policy priority remaining for Democrats this session — would create a cap-and-trade system to regulate greenhouse gas emissions in the transportation, manufacturing and utility sectors. Oregon would be the second state after California to enact such a policy.

The bill now moves to the Senate, where its fate is unclear.

“We are here today facing the greatest crisis of our lifetime, but I stand before you today in support of this bill because all hope is not lost,” said Rep. Karin Power, D-Milwaukie, one of the bill’s central architects. “We have a short window to act.”

Related: Cap-And-Trade Bill Gets Last Minute Tweaks In Surprise Hearing

HB 2020 would place a cap on most of the state’s greenhouse gas emissions and lower it over time. Major polluters regulated under the plan would have to purchase credits, known as “allowances,” for every ton of greenhouse gas they emit. Many would receive at least some credits for free, and companies could trade pollution credits among themselves.

Under the bill, Oregon would aim to lower emissions to 80% below 1990 levels by 2050. Money generated from allowances would need to be spent on helping the state adapt to the impacts of climate change and transitioning to a low-carbon future.

As it has over months of hearings, the policy proposal saw its support split largely along party lines. Democrats, who hold a substantial advantage in the House, argued that the bill was a prudent move to address climate change. While Oregon's emissions are small on the global scale, supporters suggested others would follow in Oregon’s footsteps.

“This bill is not just about Oregon, it’s about building environmental momentum,” said Rep. Chris Gorsek, D-Troutdale. “I believe that this will inspire other states, cities, counties, and perhaps even the federal government at some point to join with us.”

Related: Cap-And-Trade Bill Could Hike Natural Gas Prices In Oregon

Cap-and-trade is expected to increase costs — especially on fuel — but Democrats argue that the impacts of climate change are being felt more and more, and that allowing them to proceed unchecked will be far more expensive.

“The cost of inaction will continue to grow while we wait,” said Rep. Paul Holvey, D-Eugene. “It’s unacceptable that we can look at the evidence we see around us and continue to avoid implementing a program to reduce our greenhouse gas emissions.”

Republicans dismissed the notion that the cap-and-trade proposal would create environmental change. They instead predicted that price increases would prompt businesses to leave the state and lay off workers, and be a burden for low-income families.

“House Bill 2020 is the creation of a legislative body that is badly out of balance,” said House Minority Leader Carl Wilson, R-Grants Pass, referring to the supermajorities Democrats hold in the House and Senate. “If we were not as out of balance as we are, we wouldn’t have a bill like this before us.”

Rep. Kim Wallan, R-Medford, joked that the issue had become a matter of the “woke,” who support the bill, versus rural “rubes,” who don’t. She counted herself in the second category.

“Today in Oregon, one of these sides just doesn’t matter,” said Wallan. “The same impulse behind this legislation 30 years ago drove the loggers out of the woods.”

Rep. Mike McLane, R-Powell Butte, picked up on the theme, noting that Oregon’s impact on global emissions had been called “imperceptible” in a committee hearing on the bill.

“For those of you in the woke community, that’s called nothing. Zero. Cannot be measured,” McLane said.

He also previewed a fight that’s expected to land before the Oregon Supreme Court, if the bill passes. Republicans believe the cap-and-trade bill effectively levies a tax, which under the Oregon Constitution would require a three-fifths supermajority vote in support. Democrats have an opinion from the Legislature’s attorney that the bill could be passed with a simple majority.

“If it walks like a tax, if it acts like a tax, if it quacks like a tax, it’s a tax,” McLane said.

Economic analyses of the plan have offered differing predictions of how it would impact the state's economy, with the most recent saying the program could lead to the growth of Oregon's gross domestic product.

Republicans prolonged debate for hours Monday through a variety of parliamentary maneuvers. They repeatedly questioned Power, the bill’s carrier, and they attempted to refer the bill to five separate legislative committees and tried to have it indefinitely postponed. Each motion received debate — some of it lengthy — before being voted down.

Related: What Oregon's Cap-And-Trade Legislation Can’t Buy

Rep. Christine Drazan, R-Canby, also formally appealed a ruling by House Speaker Tina Kotek, D-Portland, that the HB 2020 is not a revenue-raising bill requiring a three-fifths vote.

“We should not cut corners,” Drazan said. “This measure is so important. It’s going to change the face of our economy. The least we can do is hold it to the appropriate constitutional standard.”

Lawmakers cast a vote after 8 p.m., with two Democrats, Reps. Caddy McKeown of Coos Bay and Brad Witt of Clatskanie, joining all Republicans in opposition.

The 36-24 margin would have been enough to satisfy the three-fifths requirement necessary to pass a tax, had one been required. But the vote is certain to be far tighter in the Senate, where Democrats can only lose two votes and still pass the bill with a simple majority. Two Democratic senators, Betsy Johnson of Scappoose and Arnie Roblan of Coos Bay, opposed the bill as of late last week.

After hours of debate on Monday, the last word went to Power, the co-chair of the committee that crafted HB 2020, and its primary champion in the House.

“This is the threat of our lifetime,” she repeated. “It has been discussed for far too long with far too little action.”