In the northeastern corner of Clatsop County, Georgia-Pacific’s Wauna Mill rolls out many of the paper products sold on the West Coast and employs more than 700 people.
The mill also emitted more than 250,000 metric tons of anthropogenic — or human-influenced — carbon dioxide equivalents, the 10th-most of any facility in the state in 2017, according to the Department of Environmental Quality.
A cap-and-trade plan under discussion at the state Legislature could tax emissions from around 100 facilities in Oregon, including Wauna, and has some hopeful for a new push to fight climate change and expand green industries. But others are worried the legislation could cost the state higher-paying industrial jobs.
House Bill 2020, the Clean Energy Jobs Bill, aims to reduce Oregon’s greenhouse gas emissions to 80 percent below 1990 levels by 2050, in order to comply with the state’s carbon reduction goal enacted in 2007. The legislation would cap allowable human-influenced emissions at 25,000 metric tons per facility starting in 2021, with the cap continually lowering over time to the 2050 goal.
To pollute above the cap, businesses would need to buy allowances, currently estimated at $16 per ton of carbon dioxide. Over time, the emissions cap will come down, with fewer pollution permits available. Companies would have to reduce their emissions, spend more on permits or buy allowances to offset emissions over the cap.
The state would sell many of the allowances at auction and invest the revenue in climate-friendly efforts such as renewable energy, public transit, weatherizing homes and thinning forest debris to lessen the severity of wildfires. The bill would also create a market for carbon-sequestering projects, such as not cutting down a forest, from which landowners can sell allowances.
The state is widely expected to link its program with the Western Climate Initiative implementing similar programs in California and Quebec, Canada, allowing Oregon businesses to buy allowances from elsewhere.
The legislation, still being ironed out in Salem, includes carve-outs for some industries.
Sawmills, where the majority of emissions are biogenic, or naturally influenced, would be exempt from the cap. Electric utilities like PacifiCorp, which serves most of Clatsop County through Pacific Power, and Portland General Electric, which has large natural gas plants in Columbia County, would receive free allowances through 2030 to account for work done to phase out coal power.
Gas utilities like NW Natural, the state’s largest, would not receive free allowances.
Trade-exposed facilities like Wauna Mill would receive free allowances the first year.
Companies would pay for an increasing percentage of pollution allowances in proportion to the percentage decrease in the cap on emissions between 2022 and 2050. Georgia-Pacific would have to purchase an estimated $123,000 worth of allowances in 2022, its bill increasing as the pollution cap lowers and the company becomes more responsible for covering allowances.
An independent analysis by Berkeley Economic Advising and Research showed that increases in energy prices resulting from the bill would be outweighed by the job creation in clean industries. The state’s economy would grow by 2.5 percent and add 23,000 jobs by 2050 under the proposed bill, the analysis concluded.
The proposed legislation has raised concerns that rising fuel and other costs will create a competitive disadvantage and drive out higher-paying industrial jobs to states and countries without carbon pricing. NW Natural has warned the bill will increase fuel prices 13 percent by 2021, 44 percent by 2035 and 60 percent by 2040.
Employees at Georgia-Pacific, owned by Koch Industries, have testified before the Legislature that the company might shift business away from the mill to avoid the additional costs. The pulp and paper industry has called for a blanket exemption from carbon caps.
“Oregon is almost certain to lose jobs to states that have lesser environmental regulations and legislation resulting in far higher emissions,” Bill Kerr, president of the United Steelworkers Union Local 1097 that represents more than 600 employees at Wauna, said during testimony last month.
An economist for his union estimated the region could lose as many as 2,500 direct and indirect jobs if a mill like Wauna was to close, costing state and local governments more than $20 million in revenue, Kerr said.
Chris McCabe, executive director of the Northwest Pulp and Paper Association, testified last month that Oregon’s mills are significantly ahead of the curve in reducing carbon emissions and using hydroelectric, biomass and other carbon-neutral power sources.
Without an exemption for trade-intensive facilities, he said, “Oregon will lose jobs and global emissions will increase. Losing Oregon jobs to other states or nations, while merely shifting the emissions elsewhere, does more harm than good.”
Those in support of the Clean Energy Jobs Bill have hailed it as a potential shot in the arm for battling climate change and building a more climate-friendly economy, potentially producing an estimated $700 million a year from selling pollution permits.
Among the leading proponents are members of Oregon Business for Climate, a coalition of around 100 medium and large companies, including Astoria’s Fort George Brewery.
“As members, we share in the organization’s mission of reducing our statewide emissions while strengthening Oregon’s economy,” Jack Harris, the co-owner of Fort George, testified last month before the Legislature. “We believe that the cap-and-trade model that is the foundation of (the Clean Energy Jobs Bill) provides the lowest-cost option for achieving our reduction targets while also incentivizing and fostering innovation to Oregon’s economy.”