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SB306 Clean Air Tax or Fee Final Report
December 2014
Northwest Economic Research Center
College of Urban and Public Affairs
Presenters
o Dr. Thomas Potiowsky
NERC Director | PSU Econ Dept Chair
o Jeff Renfro
NERC Senior Economist
o Dr. Jenny H LiuNERC Assistant DirectorPSU Assistant Professor of Urban Studies & Planning
o Dr. Chris Butenhoff
PSU Assistant Professor of Physics
o Dr. Andrew Rice
PSU Associate Professor of Physics
2
Background
o March 2013 – Carbon Tax & Shift Reporto August 2013 – SB306 effectiveo September 2013 – SB306 RFP processo October 2013 – Project start
• Monthly LRO update meetings• Technical Advisory Committee meetings• Stakeholder group meetings• Updates to Legislative committees
o November 2014 – Completion of report
12/8/2014 3
Limiting Carbon Emissions
o Regulatory controlso Market mechanisms
• Carbon cap-and-trade
• Carbon tax
12/8/2014 4
Economy
Carbon Tax
RevenueCarbon
Emissions
Methodology | Modeling Overview
12/8/2014 5
Methodology | Establish Baselines
o Economic baseline
o Emissions baseline
• Energy-related fossil fuel combustion
• Oregon Greenhouse Gas Inventory
• In-boundary: natural gas & petroleum
• In-boundary + Out-of-state: electricity
• EIA NEMS & ODOE projected energy
demand
12/8/2014 6See Report Appendix I for detailed breakdown of methodology
Methodology | Revenue Repatriation & Usage Scenario Development
12/8/2014 7See Report Appendix II for more detail on scenario schematic
Methodology | Revenue Repatriation & Usage Scenario Development
o A Scenarios: Financial Reserve and General Fund
o B Scenarios: Revenue Neutral• Reduction in Taxes and Fees
o C Scenarios: Revenue Neutral Excluding Transportation-Related Revenues• Also Citizen Dividend Scenarios
12/8/2014 8
o D Scenarios: Public Investment and Expenditures• Low Income/Worker Assistance• Targeted Industry Support• Energy Efficiency
o E Scenarios: Alternative Transportation Revenue Disbursement• Unweighted VMT• Non-Highway Transportation Funding
12/8/2014 9
Methodology | Revenue Repatriation & Usage Scenario Development
Results | Emissions
10
-100
-80
-60
-40
-20
0
20
0
10
20
30
40
50
60
2012 2016 2020 2024 2028 2032
Pct. difference relative to 1990
Ener
gy-r
elat
ed E
mis
sion
s,
mm
TCO
2e
1990 referenceBaseline$10$30$45$60$100$125$150
See Results: Carbon Tax Scenarios for full breakdown of emissions results
Results | Emissions
12/8/2014 11
Results | Emissions
12/8/2014 12
Central, 3.7%Eastern, 4.3%
Metro, 60.7%Northwest, 2.4%
Southwest, 7.0%
Valley, 21.9%
$30/ton
Central, 3.5%Eastern, 4.1%
Metro, 62.3%Northwest, 2.3%
Southwest, 6.8%
Valley, 21.0%
Baseline
Central, 3.8%Eastern, 4.5%
Metro, 59.5%Northwest, 2.4%
Southwest, 7.1%
Valley, 22.7%
$60/ton
Central, 3.8%Eastern, 4.6%
Metro, 59.0%Northwest,
2.4%
Southwest, 7.2%
Valley, 23.0%
$100/ton
Results | Revenues
12/8/2014 13
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2012 2016 2020 2024 2028 2032
Ta
x r
ev
en
ue
(m
illi
on
$2
01
2)
$150/ton
$125
$100
$60
$45
$30
$10
$4550$4020
$3450
$2350
$1870$1350
$490
See Results: Revenue for breakdown of revenue estimates
Results | Oregon Economy Basics2013
Employment = 1,679,377
GDP = $219,590,000,000
Real GDP growth = 4.4%
Total Compensation =
$97,755,000,000
Population = 3,930,065
Annual State Budget (General + Lottery) =
$8.2 billion
12/8/2014 14
Results | Employment
12/8/2014 15
0
500
1000
1500
2000
2500
3000
3500
Th
ou
sa
nd
s o
f Jo
bs
Oregon
$100/ton Financial Reserve
$30/ton All General Fund
Results | Overview
12/8/2014 16See Revenue Repatriation and Expenditure Scenario Results for economic impacts
12/8/2014 17
Results | Jobs Index
Scenario Results
B.2 - Employment Impacts
12/8/2014 18
-16
-11
-6
-1
4
9
Th
ou
sa
nd
s o
f Jo
bs (
rela
tiv
e t
o b
ase
lin
e)
$10/ton
$30/ton
$60/ton
$100/ton
$150/ton
See Report Appendix II for detailed breakdown of scenario economic impacts
12/8/2014 19
Scenario Results B.2.30 – Regional Employment Impacts
Scenario Results
B.2 - Output Impacts
12/8/2014 20
-1.00%
-0.50%
0.00%
0.50%
1.00%
Pe
rce
nt
Ch
an
ge
(re
lati
ve
to
ba
se
lin
e)
$10/ton
$30/ton
$60/ton
$100/ton
$150/ton
Scenario Results
B.2.30 – Industry Impacts
12/8/2014 21
Scenario Results
B.2.30 Key Industry Impacts
12/8/2014 22See Revenue Repatriation and Expenditure Scenario Results: Key Industries
Scenario Results
C.4 - Employment Impacts
12/8/2014 23
-9
-7
-5
-3
-1
1
3
5
7
9
Th
ou
sa
nd
s o
f Jo
bs (
rela
tiv
e t
o b
ase
lin
e)
$10/ton
$30/ton
$60/ton
$100/ton
$150/ton
12/8/2014 24
Scenario Results
C.4.30 – Regional Employment Impacts
Scenario Results
C.4 - Output Impacts
12/8/2014 25
-1.00%
-0.50%
0.00%
0.50%
1.00%
Pe
rce
nt
Ch
an
ge
(re
lati
ve
to
ba
se
lin
e)
$10/ton
$30/ton
$60/ton
$100/ton
$150/ton
Scenario Results
C.4.30 – Industry Impacts
12/8/2014 26
Evaluation | Carbon Tax and Existing Oregon Lawso Renewable Portfolio Standard (RPS)
o Motor Vehicle Emissions
• Low-Carbon Fuels Standards (Clean Fuels Program)
• Renewable Fuels Standards (RFS)
• Motor Vehicle Emissions Standards
o Electric Utilities
• Emissions reporting requirements
• Electric utility facility siting requirements and standards
12/8/2014 27See Evaluation of Carbon Tax Relative to Existing Oregon Laws for full analysis
Evaluation | Carbon Tax and Existing Oregon Laws
12/8/2014 28
12/8/2014 29
Other Considerations
Border Tariffs
Non-Combustion Emissions
Impact on Tourism
Impact on Government
Further Research
Energy efficiency feedback
Increase data detail
Implementation
Health impacts
Emissions feedbacks
See Further Research and Applications
Conclusions
o Significant emissions impacts and revenue generating potential
o Economic impacts are small relative to broader economy• Differ by region, income, and industry
o Possible to offset negative impacts with targeted expenditure or investment
