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A simple message to Clean Energy Jobs Bill supporters: This is not a comprehensive climate solution

By John Talberth, Daphne Wysham, and Nick Caleb

Climate change is one of the most daunting challenges humanity has ever faced and requires a commensurate policy response. A robust climate agenda would consist of a number of key interventions to holistically address the issue, including:

  • Ramping down all major sources of greenhouse gas emissions as rapidly as possible;
  • Making climate smart production the law not the exception;
  • Catalyzing wholesale changes in consumer behavior and public purchasing to scale up demand for goods and services with minimal carbon footprints;
  • Halting construction of new fossil fuel infrastructure;
  • Making a just transition to a 100% renewable energy and energy efficiency platform;
  • Divesting from the fossil fuel industry and redirecting those funds into sustainable alternatives;
  • Ensuring that communities most impacted by the consequences of climate change and risks associated with fossil fuel infrastructure and pollution are prioritized in adaptation plans and projects;
  • Halting the expansion of suburban sprawl and freeways and ensuring that we move as quickly as possible to public transit for all, and;
  • Rebuilding the resiliency of natural landscapes made vulnerable to climate change by bringing an end to industrial-scale forestry and agriculture practices and ensuring our land use practices enhance the drawdown—not the continued release – of carbon from the atmosphere.

Oregon’s Clean Energy Jobs (CEJ) bill barely scratches the surface of these problems. As such, it should not be hyped up as a comprehensive climate solution for the entire state economy, but explained for what it is – a limited experiment in creating some green jobs and generating public revenues through a market-based greenhouse gas reduction mechanism that will be applied to about 100 facilities and affect just a fraction of the carbon emissions attributable to production, consumption and trade activities in the state.

Most activities that pollute or undermine climate resiliency will be exempted.

What’s off the table as CEJ heads for the 2018 legislature? Any of the consumption-related emissions associated with purchases of goods and services by businesses, government agencies or consumers, for starters. The Department of Environmental Quality has been keeping track of consumption-related emissions for quite a while now, and they currently average over 75 million metric tons of carbon dioxide equivalent per year (75 mmt CO2-e/yr), substantially more than what is counted in the state’s official emissions inventory (62 mmt CO2-e/yr). Climate smart procurement standards for government agencies and businesses receiving public support would be one simple mechanism to begin to address this.

Concentrated animal feedlot operations and their methane emissions are off the table.

All land use activities are exempt. Despite being the number one source of greenhouse gas emissions in the state, the CEJ legislation exempts Big Timber and its industrial scale clearcutting practices. Not only are these practices carbon intensive but they also undermine climate resiliency by maintaining millions of acres in a degraded condition that is more susceptible to fire, insects, disease, flashfloods, landslides, water shortages and warm waters that kill salmon. Simple amendments to fold the timber industry into CEJ have been proposed, but not yet embraced.

Concentrated animal feedlot operations (CAFOs) and massive cattle herds are off the hook as well despite methane emissions that are over 86 times more potent for trapping heat than carbon dioxide. So too are chemical intensive agriculture operations, or developers who clear valuable carbon sequestration lands for automobile dependent sprawl. Globally, these land uses account for a quarter of all emissions. With so much of our state’s land base devoted to forestry and agriculture and with Oregon bursting out of its seams with new growth these exemptions mean a huge wasted opportunity for global leadership.

The proposal adopts the most limited scope of emissions to regulate.

Even on its own terms CEJ gets a “C” or less for completeness and rigor. There are many approaches in the proposed bills that reflect the low bar rather than standards set by science and best practice. Take the scope of emissions regulated at the few facilities that will be chosen to participate. Life cycle analysis (LCA) is the gold standard in scientific circles since it quantifies all the emissions attributable to an economic activity regardless of where they occur. Washington State’s Department of Ecology uses this approach in its environmental assessments conducted under its State Environmental Policy Act, and it has been embraced by thousands of corporate sustainability leaders worldwide.

At the other end of the spectrum is the ‘in-boundary’ scope that seeks to regulate only the emissions

Most emissions from the proposed Jordan Cove facility are off the table.

that occur within state boundaries. So a project like the proposed Jordan Cove liquefied natural gas (LNG) export facility – if constructed – would be off the hook for all the fugitive methane emissions stemming from fracked gas upstream and all the combustion related emissions in downstream markets in Asia. By opting for the in-state approach, CEJ will replicate a failure of greenhouse gas accounting at the national level and help mask emissions associated with fossil fuel exports – which have increased over 1000% since 2009 and now top 620 mmt CO2-e/yr. If Jordan Cove is constructed, Oregon will be contributing another 37 million metric tons a year to these off the books emissions. Oregon should do better and abandon the in-boundary method in favor of LCA whenever practicable not only for purposes of the CEJ but to be comprehensive in its annual greenhouse gas reports.

A growing number of loopholes and exemptions.

Another weakness comes from loopholes and exemptions for sources the legislation purports to regulate – electricity, industrial processes, and fossil fuels. All facilities that emit less than 25,000 metric tons of carbon dioxide per year are exempted. That’s equivalent to the annual emissions associated with about 5,700 passenger vehicles. The threshold should be much lower. In the Senate version of the bill, the semi-conductor industry is exempted through at least 2025.  Marine and aviation fuels are exempted. And the exemptions and loopholes continue to grow with each new version of the bill. The most recent iteration of the legislation will allow any polluter deemed to be ‘trade exposed’ to receive 90% of their pollution allowances for free with no firm date as to when they will have to start bearing the costs of that pollution.

Failure to halt the expansion of fossil fuel infrastructure.

Another key omission from CEJ is the issue of new fossil fuel infrastructure. The scientific consensus is to leave all undeveloped reserves in the ground, and a ban on new fossil fuel infrastructure is the appropriate policy response along with a commitment to a 100% renewable energy platform. The City of Portland led the way in 2016 and 2017 through its Fossil Fuel Terminal Zoning Amendments and 100% Renewable Energy policy (and Portland called on the State of Oregon to set 100% renewable energy goals). In January, 2018, the Oregon Court of Appeals affirmed the city’s Constitutional authority to prohibit new fossil fuel infrastructure to protect the health and safety of residents. Senator Merkley is a strong proponent for both policies and introduced legislation in Congress in 2017 to this effect. CEJ can easily be amended to scale up Portland’s success and follow Senator Merkley’s leadership on these issues.

Inadequate safeguards to prevent fraudulent offset projects.

And then there is the issue of offsets, which allow polluters to keep polluting and, ostensibly, pay for more cost-effective emissions reductions elsewhere. Offsets are often embraced as win-win solutions for climate and improved agriculture and forestry practices but in reality are replete with perverse incentives and a failure rate so high that the GAO and researchers for the European Union have warned climate policy makers off. Offsets trade emissions reductions that can be achieved with certainty for ones that only have a probability of success – and a low one at that if you read the details of the GAO and EU critiques. In the EU, a 2016 report found that 85% of the offsets purchased were not providing real, measurable and additional emission reductions.

Clearcuts often qualify for carbon offsets despite this practice being the number one source of emissions in Oregon.

Offsets are not only low probability but create the wrong incentives, as noted by a 2012 study commissioned by the National Bureau of Economic Research. You have to be doing harmful practices to get paid not to do them anymore – a textbook illustration of moral hazard. If harmful practices are incentivized, they will proliferate. Adverse selection is another perverse incentive. Polluters who are already planning to reduce emissions have an incentive to mask or delay these plans in order to get paid for doing it. A better system of incentives would be to reward those already practicing climate smart forestry and farming or implementing state of the art emissions reduction techniques to provide incentives for them to expand their holdings and operations.

If offsets are retained, then CEJ should at least adhere to principles of good governance, which would allow citizens free access to information about who is buying them, who is selling them, what the arrangements look like and what the climate impacts are. Citizens ought to be provided opportunities for commenting on these projects and challenging them in court if experts they work with uncover fraud. A citizen’s suit provision would go a long way toward improving accountability in the offsets market.

Lack of safeguards to ensure that climate investments are made wisely.

While CEJ is laudable for generating considerable public revenues (~$700 million a year) for green investments, proceeds are earmarked for three broad buckets without adequate sideboards to ensure that the public is getting the biggest bang for the buck and not having funds used for questionable purposes. For example, 20% of the funds will be earmarked for projects that “promote resiliency to disease and forest fires” – code words for discredited commercial logging projects on public lands under the guise of forest health and wildfire risk reduction.

Scientific studies over decades have shown that in most cases these logging interventions make matters worse. Commercial logging invariably increases carbon emissions and could easily make forests and watersheds less resilient instead of more resilient. The appropriate sideboard in this situation is to amend CEJ to bar use of Climate Investment Fund revenues for commercial logging projects and instead focus on climate smart forest restoration projects. These include road decommissioning, culvert replacement, prescribed fire prevention and weed removal, conserving roadless areas, and non-commercial thinning of dense tree plantations to expedite their conversion back into climate smart and resilient forests.

What we need is a solution that is fair, comprehensive, and scientifically rigorous.

Clearly,  Clean Energy Jobs is not a comprehensive climate solution. Though there are climate benefits to be gained from investments in green energy and resilience, the enormous exemptions, exceptions, allowances, and loopholes in current drafts of CEJ, ironically, create the possibility that the energy and effort our state will expend to implement this program could result in no net climate benefits for Oregon’s residents and another failure to meet a new round of climate commitments. And, while we wait for the program to be implemented (beginning in 2021), it seems likely that the legislature will adopt a wait and see approach until enough data has been generated to evaluate the successes and failures of the program. If our legislators and public are left with the impression that CEJ is a comprehensive strategy for tackling our largest carbon emitters– this legislation could delay and impede significant reforms in the forestry and agriculture sectors as well as efforts to prohibit new fossil fuel infrastructure and move aggressively toward a just transition to a 100% renewable energy powered economy.

Unless CEJ is amended significantly and the exemptions, exceptions, allowances, and loopholes enumerated above are addressed, the resulting program will not come anywhere near the type of comprehensive climate strategy we need from our leaders. Oregonians must insist that CEJ be transformed from what looks like the least we can do to something that is fair, comprehensive, scientifically rigorous, and in line with Oregonians’ passion for leading the way on all things green and sustainable.

Additional resources:

Fact sheet: major concerns with CEJ and ways to address them.

Proposed forestry amendments to SB 1070, 2017.

Position paper on no-new fossil fuel infrastructure.


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    Portland’s Fossil Fuel Infrastructure Restrictions Do Not Violate the US Constitution

    Oregon Court of Appeals Reverses Lower Court’s Decision

    Today, the Oregon Court of Appeals reversed, in large part, a Land Use Board of Appeals (LUBA) decision that invalidated Portland’s landmark Fossil Fuel Terminal Zoning Amendments, passed unanimously in December 2016. The Court ruled that Portland did not violate the Dormant Commerce Clause of the U.S. Constitution. The Court’s decision opens the door for local governments to continue to take meaningful action to combat climate change.

    Last August, the Portland City Council unanimously voted to appeal LUBA’s decision, which struck down the city’s ordinance. A coalition of organizations represented by the Crag Law Center, including Oregon Physicians for Social Responsibility, Center for Sustainable Economy, Columbia Riverkeeper, and Audubon Society of Portland, intervened to support the city’s defense of the fossil fuel ordinance.

    The Court of Appeals also reversed LUBA’s ruling that the ordinance violated Statewide Planning Goal 12, which governs transportation planning. The Court concluded that the ordinance does not impact transportation facilities or the flow of goods and services in the local and regional economy. The Court sustained LUBA’s ruling that Portland violated Goal 2 of Oregon’s statewide planning goals. The City of Portland can cure this defect through additional procedure and reinstate the Fossil Fuel Terminal Zoning Amendments.

    “We’re thrilled. Today’s decision affirms that Portland and other communities can implement innovative protections to counter threats to human health and safety from dangerous fossil fuel infrastructure, ” stated Regna Merritt of Oregon Physicians for Social Responsibility.

    “As we feel the effects of climate change, from forest fires to ice storms, the City of Portland and its grassroots climate activists are leading the way on solutions,” said Mia Reback lead organizer for 350PDX. “Today’s decision allows Portland to continue its internationally recognized work to stop fossil fuels, reduce greenhouse gases, and ensure a justice based transition to 100% renewable energy.”

    “The Court’s decision confirms the City’s ability to stand up for the health, safety, and environment of its residents by restricting dangerous developments such as new oil train terminals,” said Dan Serres, Conservation Director of Columbia Riverkeeper.

    “Today’s decision to uphold the landmark policy to restrict Fossil Fuel development is a huge win for the City, its residents and anyone concerned about ensuring that local jurisdictions are able to maintain the ability to protect their communities and fight climate change,” said Bob Sallinger, Conservation Director for Portland Audubon. “It is disappointing that the Portland Business Alliance would join Big Oil in trying to reverse critically important efforts to protect our local environment.”

    “This is an important signal to other local governments that they can protect their residents from the many dangers of the fossil fuel industry,” said Nicholas Caleb, the Staff Attorney at the Center for Sustainable Economy. “Many other municipal governments were waiting on this decision to follow Portland’s lead and continue to fight together for a healthy climate system and truly sustainable economy.”

    “We are encouraged by the Court’s rejection of the fossil fuel industry’s effort to defeat local action to protect our climate and communities from the dangers of fossil fuels,” said Maura Fahey, Staff Attorney at Crag Law Center. “Right now, it is up to local communities to stand up for our future and to push back against the fossil fuel industry.”


    Read the opinion here – http://www.publications.ojd.state.or.us/docs/A165618.pdf

    Oregon Physicians for Social Responsibility, Portland Audubon Society, Columbia Riverkeeper, and Center for Sustainable Economy are represented in this case by Crag Law Center, a nonprofit public interest environmental law organization.

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      Victory: World Bank Announces It Will Stop Financing Oil and Gas in 2019

      children drink from contaminated river

      Children try to get a drink of clean water downstream from a World Bank-financed coal-fired power plant. The river is contaminated by fly-ash dumped in the river.

      Twenty years ago, I founded the Sustainable Energy & Economy Network (SEEN) at the Institute for Policy Studies in Washington, DC, to tackle the role that the World Bank and other major development banks and export credit agencies were playing in financing fossil fuels–investments that were harming, not helping the poorest, while destabilizing the global climate. Our first report, which I co-authored with Jim Vallette, at the Institute for Policy Studies, was entitled, “World Bank and G-7: Changing the Earth’s Climate for Business.” We catalogued the billions of dollars the World Bank was investing in fossil fuels, despite pledges to the global community to invest in renewables. We were sounding the alarm for two reasons: We wanted to avoid technological lock-in by countless developing countries in fossil fuel infrastructure—a lock-in that could prove catastrophic to our planet. And we knew that the World Bank had been tasked by the United Nations in 1992 to do the opposite—to invest in renewable energy and guide the world toward a sustainable development strategy for the world’s poor.

      That report kicked off a firestorm. First, the World Bank denied our report’s findings. Then they decided they would do their own review of their fossil fuel investments, The Extractive Industries Review, which not only proved our findings correct, but reiterated our call to get out of fossil fuels. So the World Bank did what it does best: It said it would produce yet another report, calling for inaction. It was inaction that the World Bank Board of Directors chose in 2004.

      We fumed, we protested, we condemned them in the press, we spoke at hearings, we held citizens’ tribunals, we organized marches.

      Finally, in 2013, upon urging from President Obama, the World Bank blinked. They said they would get out “most forms of coal-fired power.”  While this was welcome news, why, we asked, did the oil and gas industry need ANY support from a public institution like the World Bank? So the campaign to get them out of all fossil fuels continued.

      Now, today, 20 years later, we got word of a major victory: The World Bank pledged to get out of all upstream oil and gas investments.  By 2019. Why not now? Why 2019? We think, if they take the climate science seriously, and the Paris Accords to heart, they should stop funding ALL fossil fuel projects. Immediately. Not in 2018. Not in 2019. Now. We have no time to lose.

      While our victory is not complete, it is a MAJOR victory nonetheless. And so we celebrate. We never could have done it without our allies all around the world. You know who you are. Thank you. The planet thanks you.

      The work I started in DC in 1997, now continues under CSE–as our Climate Justice Program fights and wins battles to bring an end to all new fossil fuel infrastructure here at home. Please support our work so we can keep winning battles like these.

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        Report: Climate legislation must include Big Timber

        climate legislation big timberCarbon sequestration dead zones are expanding. Clearcutting is Oregon’s single largest source of greenhouse gas emissions. Millions of acres of industrial tree plantations present huge public health risks because they are far more susceptible to fires, floods, unhealthy water temperatures and droughts than the natural forests they’ve replaced. But there are numerous options Governor Brown and legislators in Salem have to fix the problem and catalyze climate smart practices that can employ thousands of workers in the woods and enroll Oregon’s forests in the fight against global warming.

        These are some of the key conclusions from a new Center for Sustainable Economy report conveyed to Governor Brown and legislators this week as they continue to deliberate options for moving ahead on climate change legislation in the 2018 session, which begins in early February.

        The report –  entitled “Oregon Forest Carbon Policy: Scientific and technical brief to guide legislative intervention” – is a synthesis of scientific and technical information about the effects of industrial forest practices on climate change and climate resiliency and a discussion of legislative options for moving forward. It builds on a 2015 report published with Geos Institute that helped lead to a reconvening of the Commission’s forestry task force to revisit their assumptions – published in their Interim Roadmap to 2020 report – that forestry’s effects on climate were an unqualified benefit. Today’s report paints a drastically different story.

        According to Dr. John Talberth, who authored the study for CSE, “Any climate change legislation moving forward would be seriously deficient without taking on Oregon’s largest carbon polluter and the number one threat to our water supplies, fish, and wildlife as climate change unfolds. Fortunately, there are multiple ways forward based on sound science, efficient markets, and fairness.”

        The report reviews three legislative options. The first option is to include major carbon polluters in the timber industry as entities regulated under the proposed cap-and-invest bill – SB 1070 – now moving toward reconsideration in 2018. As it now stands, the timber industry is exempted. Proposed amendments to SB 1070 have been drafted and submitted to Representative Helm, Senator Dembrow, and other legislators, and have strong support from the environmental community.

        The second is a carbon tax and reward approach that taxes emissions from clearcutting and short rotation timber plantations and uses funds to reward foresters who know how to log and leave a healthy forest behind. Legislation for this was drafted last year, but has yet to be introduced.

        The third would require corporate forestland owners to develop and adhere to long term climate resiliency plans that set hard targets for accumulating lost carbon from the land. Carbon densities on industrial forestlands are less than a third of what existed before they converted native old growth forests into plantations. The Oregon Global Warming Commission is on record supporting the general approach of setting carbon density standards and targets.

        “Inaction is inexcusable given humanity’s urgent need to draw down atmospheric carbon as fast and efficiently as possible, Talberth continued. “And passing legislation to flip industrial forest practices in Oregon to climate smart alternatives is one thing Governor Brown and legislators can do that has global significance.”


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          GPI 2.0: States and Cities Can Lead the Way Beyond GDP

          John Talberth in front of US Capitol BuildingIn a new study authored by Dr. John Talberth and Michael Weisdorf of Portland State University, CSE has demonstrated a new methodology for the Genuine Progress Indicator (GPI) that promises to accelerate its adoption by states and cities as a way to measure and promote economic wellbeing that takes into account income inequality, environmental degradation, and the benefits of public investments in human, social, built and natural capital. For over three decades, the GPI has been one of the most ubiquitously used alternatives to GDP, but persistent issues with its theoretical foundations, methods, and sources of data have kept its use in check.

          At the 2017 US Society for Ecological Economics annual conference in St. Paul MN, Dr. Talberth and Mr. Weisdorf presented their new paper entitled GPI 2.0: Pilot Accounts for the United States, Maryland, and Baltimore. The paper was published in the journal Ecological Economics just prior to the conference. While many of the GPI 2.0 upgrades are difficult to understand without formal training in welfare economics, the end result is a new method that greatly enhances its usefulness to states and cities committed to sustainable development and growing their economies in ways that matter most to the wellbeing of their citizens.

          Minnesota could very well be the next state to enroll the GPI towards this end. During the 2017 Legislative Assembly, Senator John Marty (DFL) and Representative Jennifer Schultz (DFL) teamed up to introduce legislation establishing the GPI as a metric maintained by University of Minnesota’s Bureau of Business and Economic Research (BBER). The bill would finance BBER’s calculation of the GPI and also require that the Minnesota Department of Management and Budget include the GPI along side other measures of state economic growth and wellbeing in its annual forecasts.

          Momentum is growing to pass a revised version of this bill next year and have Minnesota join the ranks of Maryland, Vermont, Washington and Hawai’i as states exploring the GPI’s use as a litmus test for economic policy and performance. One of the GPI’s advantages over GDP is that it provides a way to accurately report the true benefits and costs of public investments in health care, education and the environment and other policies to advance the goals of sustainable development. GDP cannot do this because it is simply a gross measure of economic activity that says nothing about how that activity translates into household wellbeing. To operationalize this use of the GPI, a “GPI impact note” can be used in place of more conventional fiscal and economic impact notes prepared for proposed legislation. In 2014, CSE demonstrated the usefulness of the GPI note concept by applying it the proposal to lift Maryland’s minimum wages. The analysis documented that raising Maryland’s minimum wage to over $10/hour would generate net benefits in the range of $1.7 billion per year, chiefly as a result of increased spending by low to middle income households and reduced costs of inequality.

          State and cities that adopt the GPI as a key economic metric will discover that it is a powerful tool for depoliticizing economic policy interventions and shifting the debate over such policies onto rational grounds in terms of metrics that matter rather than partisan rhetoric that serves no purpose other than to generate attention grabbing headlines. Now that a GPI 2.0 methodology is in place, CSE is eager to help Minnesota and other states move forward with this agenda.


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            Following Portland’s Lead, Seattle Calls for No New Fossil Fuel Infrastructure

            CSE Staff Attorney Nick Caleb in front of Portland City Hall Photo credit: Mia Reback

            On June 12, 2017, the Seattle City Council unanimously passed a resolution for no new fossil fuel infrastructure, in both the city of Seattle and urged the state of Washington, home to the nation’s largest proposed oil train terminal in Vancouver, WA, to do the same. Less than six months earlier, grassroots activists including many members of the Climate Action Coalition, in Portland, OR pushed the City of Portland to pass the strongest ordinance in the country calling for no new fossil fuel infrastructure.

            The Sustainable Energy & Economy Network (SEEN), a project of the Oregon-based Center for Sustainable Economy, launched a campaign shortly after Portland passed its first resolution opposing new fossil fuel infrastructure in 2015 urging elected officials to support Portland’s resolution for no new fossil fuel infrastructure and a just transition for workers, and pledge to do the same in their jurisdictions. SEEN succeeded in getting 39 elected officials to sign and pledge to put in place similar restrictions in their jurisdictions.  Among the signatories in December 2015 was Seattle City Council Kshama Sawant.

            The resolution that passed in Seattle was passed with the strong support from local activists with 350Seattle, among others, and specifically cited Portland’s fossil fuel terminal zoning amendments and commits Seattle to enforcing the Paris Climate Accords as an additional justification for their call for no new fossil fuel infrastructure. The resolution reads, in part: The City of Portland, OR, has passed an ordinance prohibiting the construction of all new fossil fuel projects in the City, and when passing the ordinance, Portland Mayor Hailes stated: ‘we can build part of a green wall on the West Coast by saying we aren’t going to have these facilities in our city.'”

            “We worked very hard in Portland over several years to push our City Council to say no to new fossil fuel infrastructure. We hoped that others in our region and around the nation would follow suit,” said SEEN founder and CSE Climate Justice Program Director Daphne Wysham. “This is the kind of no nonsense, bottom-up, grassroots action and bold local leadership we need everywhere if we are to meet and exceed the terms of the Paris Accords. With record temperatures, violent storms and weather-related crop failure and drought around the world, we urgently need every city in the world to follow Portland’s example.”

            “Seattle’s decision to call for Washington State to reject fossil fuel infrastructure proposals as well as investigating local code changes to prevent new projects locally is an extremely welcome development,” said CSE Staff Attorney Nick Caleb. “We will help Seattle however we can and we encourage other jurisdictions to join in and say no to new fossil fuel infrastructure.”

            To support our work, join the SEEN activist network and help us take local action everywhere to uphold the Paris Accords, and push for an end to new fossil fuel infrastructure, throughout North America, visit www.seen.org For more information, write: info@sustainable-economy.org or visit www.nonewffi.org

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              Ocean Acidification and Warming: The Economic Toll

              In a new study authored by Dr. John Talberth and Ernie Niemi of Natural Resource Economics, CSE reviewed the economic consequences of ocean acidification and warming – the two most prominent effects of climate change on our oceans – and estimated what increment to the existing social cost of carbon (SCC) needs to be made to account for these damages. Preliminary results suggest that proper accounting of an economic risk that could approach $20 trillion per year by 2100 would raise SCC 1.5 to 4.7 times higher than the current federal rate, to $60–$200 per metric ton CO2-e. The study has been published online by Elsevier as part of their Reference Module in Earth Systems and Environmental Sciences.

              Climate change has the potential to disrupt ocean and coastal ecosystems on a scale that is difficult to grasp. There are two interrelated processes at work: ocean acidification and ocean warming (OAW). Oceans have absorbed roughly half of all anthropogenic emissions of carbon dioxide. Acidification occurs as the absorption of CO2 triggers a series of chemical reactions that increase the acidity and decrease the concentration of carbonate ions in the water. So far, absorption of CO2 has increased acidity of surface waters by about 30% and, if current trends in atmospheric CO2 continue, by 2100 these waters could be nearly 150 percent more acidic, resulting in a pH that the oceans haven’t experienced for more than 20 million years. Among the dire predictions associated with acidification include dramatic reductions in populations of some calcifying species, including oysters, clams, sea urchins, shallow water corals, deep sea corals, and calcareous plankton – the latter effect putting the entire marine food chain at risk. Some models suggest that ocean carbonate saturation levels could drop below those required to sustain coral reef accretion by 2050.

              The second process is ocean warming. The mechanisms of ocean warming are complex, and include heat transfer from the atmosphere, downwelling infrared radiation, stratification, reductions in mixing, changes in ocean currents, and changes in cloud cover patterns. Already, the global average sea surface temperature (SST) has risen by over 2.0 °F since the post-industrial revolution low point in 1909. Sea level rise is one of the most conspicuous effects with potentially catastrophic consequences. Models that account for collapse of Antarctic ice sheets from processes driven by both atmospheric and ocean warming indicate sea level rise may top one meter by 2100 and put vast areas of coastal infrastructure at risk.

              Obviously, all these physical effects have enormous economic consequences, yet relatively little research has been completed to date on their expected magnitude, timing, and distribution. Indeed, as late as 2012, several prominent climate researchers concluded that economic assessments of the effects of ocean acidification “are currently almost absent.” To help fill in this information gap, we combed through all published research on OAW economic consequences, updated figures where needed, and made some original calculations of our own to estimate some plausible worst-case scenarios. These scenarios appear in Table 4, below. Alarmingly, they suggest that OAW costs could near $20 trillion per year by 2100 in association with a variety of dramatic impacts, such as loss of all charismatic marine species.

              Table 4: Plausible worst-case scenarios and values at risk from OAW

              Resource or service at risk Scenario Values at risk

              ($2016 billions/yr)

              Net primary productivity Ocean net primary productivity reduced by 16% $9,232.00
              Coral reefs Loss of at least 50% of current coral reef area $5,661.70
              Coastal infrastructure Additional SLR of 3 meters via WAIS collapse $3,561.69
              Charismatic species 25% of charismatic marine species go extinct $1,104.08
              Carbon sequestration 50% loss of ocean CO2 uptake $641.16
              Mangroves Loss of at least 15% of current mangrove area $287.42
              Fisheries 400 million at significantly increased risk of hunger $245.74
              Coastal ecosystems Marine dead zones expand in area by 50% $126.82

              The relative lack of understanding about economic consequences has, in turn, translated into a lack of policy mechanisms and research focused on OAW. One of the policy mechanisms where OAW costs are notably absent is the social cost of carbon (SCC) – an increasingly popular regulatory tool for assessing both the costs of greenhouse gas emissions and the benefits of actions to limit emissions. Ostensibly, the SCC includes all known market and non-market costs, yet there are many categories missing or incomplete. One of the bigger holes is OAW and one of the justifications for its absence is the relative dearth of methods or data to quantify economic consequences and the assumption that such impacts are minor enough that society will be able to adapt. In the paper, we argue that such barriers need not restrain the government agencies participating in the SCC’s development and application from incorporating estimates for OAW based on the best available information and inclusive of high-impact but low probability scenarios – two factors that are baked into the regulatory framework for the SCC.

              We do so by demonstrating three basic approaches rooted in standard microeconomic models of externalities, capital investment, and risk aversion. The first is based on federal agencies’ current approach for quantifying externalities from GHG emissions using the Dynamic Integrated Climate-Economy (DICE) integrated assessment model and economic damage functions suggested by existing literature. The second is a replacement or adaptation cost approach, which views SCC as a current capital investment liability that can be amortized over the adaptation time horizon. The third is an averted-risk approach based on willingness to pay to eliminate the risk of catastrophic changes, an approach that seems most compatible with worst-case scenario requirements under existing law.

              In the next phase of this work, the study will be presented to the Interagency Working Group on the Social Cost of Carbon and the National Academy of Sciences, who is conducting a review of SCC methods and accepting recommendations for changes in approaches and sources of information. If the SCC is to be an effective regulatory tool and send the right market signal to polluters it must be as complete as possible. By engaging with the IWG on how to best incorporate the enormous toll associated with ocean acidification and warming, we hope to help fill one of SCC’s most serious omissions.

              Further reading:


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                Forest Carbon Tax and Reward: Creating more jobs and carbon in the woods.

                Deforestation, forest degradation, and unsustainable forest practices are major drivers of climate change. Deforestation and other land-use changes have released approximately 150 gigatons of carbon to the atmosphere since 1850, roughly one-fifth of the current atmospheric total. The contributions from forest degradation (i.e. converting real forests into tree plantations) and unsustainable practices (i.e. those that cause irreversible damage to soils) are on the rise. Globally, emissions from forest degradation have increased from 0.4 to 1.0 gigatons CO2 per year between 1990 and 2015. In Oregon, emissions from deforestation and industrial forest practices are not monitored by any state or federal agency but are likely the scond largest source of greenhouse gas pollution each year.

                A swift transformation to sustainable forest practices that halt and reverse deforestation and forest degradation has the potential to capture and store much of the excess carbon that is now fueling climate change. For example, climate scientist James E. Hansen has calculated that we can pull 100 billion tons of carbon from the air through large scale restoration of areas denuded by logging and agricultural expansion. This has the potential to reduce CO2 concentrations by 30 parts per million by 2100, which can make all the difference as to whether humanity achieves the 2° C warming cap established by international agreements or blows past that critical threshold.

                As it has done in the past on so many other issues, Oregon can lead the way. It can do so by passing globally replicable legislation implementing a forest carbon tax and reward program to penalize clearcutting, chemical sprays, short rotations and construction of logging roads and dramatically scale up climate smart forest practices that enhance carbon sequestration and storage capacity of its state and privately managed forestlands.

                Here’s how it would work: Forestland owners who release more carbon through logging than is sequestered by natural forests on their properties would be levied a tax equivalent to the social cost of carbon – roughly $42 per ton of carbon dioxide emitted – on these net emissions. However, forestland owners would receive credits against the levy for a wide range of beneficial practices that bolster carbon storage including long rotations, selective harvesting and set-asides for streams, wildlife, non-timber forest products, recreation, and other beneficial uses. In addition, forestland owners that embrace these practices would be eligible for generous payments from a Forest Carbon Incentive Fund (FCIF) capitalized by the tax and managed by the Department of Forestry in consultation with the Oregon Global Warming Commission. Many forestland owners would make money on this deal – in particular, good actors who know how to produce timber while leaving a real forest behind.

                The revenue impacts of the proposed legislation have yet to be calculated. But a reasonable estimate is that the net (after credits and deductions) tax would generate $50 per thousand board foot harvested – equivalent to $120 million per year at current rates of harvest on industrial forestlands. Oregon’s Department of Forestry and the Oregon Global Warming Commission would keep what they need to fill in their budget holes and administer the tax and reward program. The rest (about $100 million) gets dispersed to forestland owners who agree to implement climate smart, labor intensive practices needed to boost carbon storage and transform Oregon’s private forest landscape from a veritable wasteland of clearcuts and logging roads into a green carpet of healthy, functioning, and naturally evolving forests. If managed well, Pacific Northwest forests have the potential to capture and store more carbon per acre than any other forest type on the planet. A forest carbon tax and reward program would help fulfill this potential and by doing so, create thousands of new jobs.

                A typical multiplier for money spent in the woods paying workers to restore timber plantations back to real forests and implement other climate smart practices is about 60 direct and induced jobs per million dollars invested. That’s 6,000 jobs per year associated with FCIF payments of about $100 million per year. Not a bad deal for skilled forest workers. And a welcome shot in the arm for distressed rural communities searching for ways to decouple from the booms and busts of industrial, high emissions logging cycles.

                Time is running out on the climate time bomb. One of the great contributions Oregon can make on the global stage is to recruit its state and privately held forestlands into its climate agenda, help restore the world’s most effective carbon sink, and create thousands of jobs in doing so. The Oregon Legislature and Governor Brown would do well to provide such leadership by enacting forest carbon tax and reward legislation this year.

                Further reading:

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                  Fossil Fuel Risk Bonds: Making Polluters Pay for the Climate Crisis

                  One of the most aggravating aspects of the climate crisis is the fact that fossil fuel companies are passing on huge financial risks to taxpayers and politicians are simply turning their backs on the problem instead of holding those companies accountable. At each stage of the fossil fuel product life cycle, taxpayers are increasingly burdened with a litany of costs such as those associated with fracking-induced earthquake swarms, pipeline explosions, abandoned infrastructure, water pollution and, of course, the costs of climate change. Fossil fuel risk bond programs – a policy innovation proposed by Center for Sustainable Economy – can help reverse this glaring inequity by shifting the economic risk back where it belongs: on the polluters.As set forth in our new report, fossil fuel risk bond programs are systematic efforts by state and local governments to evaluate and respond to the financial risks they face at each stage of the fossil fuel lifecycle in their jurisdictions. Specific fossil fuel risk bond program instruments can be grouped into two broad categories:

                  • The first category of risk bonding for fossil fuels would consist of conventional financial assurance instruments such as surety bonds and environmental liability insurance that would address discrete risks caused by particular entities in particular places – such as abandoned infrastructure, explosions, or localized pollution. Fossil fuel risk bond programs can expand the scale (i.e. required coverage amounts) and scope (i.e. types of hazards covered) of these conventional instruments.
                  • The second category of risk bonding for fossil fuels would consist of surcharge-based climate or natural hazard risk trust funds. These trust funds can be used by governments to offset public costs of climate-related natural disasters, to pay for the costs of climate adaptation, or to pay for economic damages associated with fossil fuel production and trade that are difficult to attribute to a single entity. They would be capitalized by a surcharge on all fossil fuel transactions in the local economy. The surcharge rate could be based on a jurisdiction’s expected costs associated with climate change, climate adaptation, and other pervasive risks such as earthquake swarms and pollution, and be levied on each ton of carbon dioxide equivalent (CO2-e) embodied in fossil fuels extracted, transported, stored, distributed, and combusted (at least by industry and power plants) by any source in a given jurisdiction.

                  The benefits could be huge for states, counties, and cities struggling with rising climate-related costs with no clear way to pay for them. For example, consider a county in which oil, gas, and coal extraction takes place that is also suffering the effects of a strengthening climate change signal in the form of regular 100-year floods. Climate risk trust funds maintained by that county could be used to: (1) compensate homeowners for fracking-related earthquake damage; (2) pay for the costs of filtering water contaminated by tailing pond leaks; (3) pay for the increased public service cost burden associated with oil or gas boomtowns; and (4) relocate infrastructure from floodplains.

                  CSE has begun work along the West Coast to promote this policy innovation as part of our work on a just transition toward a low-carbon and climate-resilient economy. In particular, fossil fuel risk bond programs provide a way to ramp up the funding necessary to put scores of people to work – including displaced oil, gas, and coal workers – while ramping down fossil fuel consumption, decommissioning obsolete fossil fuel infrastructure, restoring mines, oil platform sites, and gas well pads back into a natural condition and implementing climate adaptation projects to help make communities safe in the face climate disasters. In a 2012 analysis of oil platforms in Cook Inlet, Alaska, we estimated that decommissioning 16 active oil platforms and 160 miles of pipeline could inject over $1 billion into the local economy.

                  As our report goes to press, Fort McMurray, Alberta has experienced one of the scariest signals of climate change – an unprecedented wildfire of epic proportions that burned large portions of the city to the ground. Over 1,600 structures were lost. The economic toll is $1 billion and counting. The irony, of course, is that the city lies at the epicenter of the tar sands industry, producing oil that packs an enormous climate change punch. If fossil fuel risk bond programs were in place, the city, province, and federal governments would have adequate funding to respond to this disaster, help residents rebuild, and invest in a future beyond fossil fuels. Instead, they are left with a blackened landscape and a mountain of debt that has yet to be tallied.

                  For a copy of Fossil Fuel Risk Bonds: Safeguarding public finance from product life cycle risks of oil, gas, and coal, click here.


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                    Economists: New BLM Logging Plan Would Generate More Economic Harm than Good

                    deforestCenter for Sustainable Economy has teamed up with Ernie Niemi of Natural Resources Inc. in Eugene to lodge a formal protest of the Bureau of Land Management’s (BLM) new long-term logging plan for western Oregon on the grounds that the plan would create more economic harm than good and sabotage sustainable development opportunities in forest-dependent communities.

                    According to Dr. Talberth, President and Senior Economist for CSE, “The Obama Administration has chosen to sacrifice natural resources essential to future economic health in order to prop up a destructive industry from the past that has gotten rich off deforestation while leaving workers and communities in the lurch. This does not bode well for the President’s environmental legacy.”

                    According to the economists’ protest, the new logging plan would:

                    • Kill more jobs than it would create;
                    • Force taxpayers to absorb $60 in costs for every $1 in timber sold;
                    • Add to the deforestation crisis plaguing western Oregon, and;
                    • Generate carbon dioxide emissions that cost society at least $40,000 for every acre clearcut.

                    The plan boosts logging levels by 37% over previous levels. Under the new plan, the BLM will offer 256 million board feet of timber for sale each year, the equivalent of over 50,000 log truck loads. To accommodate higher logging levels, the plan would rollback protections for water quality, fish, recreation, spotted owls and old growth forests established over 20 years ago by the Northwest Forest Plan brokered by President Clinton. For example, the number of acres managed for primitive or backcountry recreation experiences would fall by 112,000 acres. The plan would reduce the amount of land in protective streamside zones for water quality and fish by 292,000 acres. The protest argues that the BLM failed to take the negative economic consequences of these changes into account.

                    According to NRE’s Ernie Niemi, “The BLM ignored the many studies that document what most of us recognize as common sense: unlogged lands generate jobs by improving the quality of life in nearby communities, attracting new residents, and stimulating business growth. The BLM’s proposal to clearcut unlogged federal lands would kill more long-term jobs than it would create in the timber industry.”

                    The core issue raised by the protest – a formal step required by the BLM before a new management plan can be challenged in court – involves often overlooked provisions of the Oregon and California (O&C) Lands Act of 1937 that place constraints on the amount of logging BLM is expected to conduct every year. Those constraints require that the BLM only sell as much timber as it can in “normal” markets and at “reasonable prices.” The two economists argue that timber markets in western Oregon are severely distorted by hidden subsidies that allow buyers and sellers of timber to ignore costs that clearcut logging imposes on others by degrading water in streams, spoiling outdoor recreation opportunities and exacerbating climate change. These costs far exceed the unreasonably low prices the BLM will charge timber companies to clearcut federal lands throughout western Oregon.

                    The economists’ protest cites previous studies by CSE that identify the timber industry as Oregon’s second largest greenhouse gas polluter and document how voracious clearcutting has resulted in a loss of forest cover on over 522,000 acres since 2000. “To be consistent with the goal of sustained yield, the BLM should be pulling back on its timber sale program altogether,” Talberth added.


                    CSE Protest
                    Exhibit A: Negative Impacts of Logging (NRE)
                    Exhibit B: Benefits and Costs of Logging (NRE)
                    Exhibit C: CSE’s comments on the draft RMP and DEIS

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                      How Industrial Forest Practices are Subverting Oregon’s Climate Agenda

                      ccabClearcutting and use of forest chemicals and fertilizers on industrial forestlands could represent Oregon’s second largest source of global warming pollution and are subverting the State’s climate agenda by making landscapes more susceptible to wildfires, landslides, floods and warm waters that kill salmon. And despite legal requirements to do so, the Oregon Global Warming Commission has failed to track and evaluate the greenhouse gas emissions (GHG) from forest practices or follow through on commitments to develop and promote alternative management techniques that can transform these lands from a net source to a net sink for atmospheric carbon. The key culprit: a flawed international greenhouse gas accounting protocol that lumps all forest owners into one aggregate “forest sector” and allows the timber industry to take credit for carbon sequestered on forests protected by non-profits, small landowners, and public agencies.

                      These are the key conclusions of a new report released today by Center for Sustainable Economy and Geos Institute. The report – Clearcutting our Carbon Accounts – is an analysis of greenhouse gas (GHG) emissions estimated from State and private lands in western Oregon between 2000 and 2014. The report considered emissions associated with timber harvest, which removes carbon stored in forests for decades, clearcutting beyond the rate of forest regrowth and forest chemicals like Atrazine, 2,4 D, and Glyphosate. Oregon has 1.08 million acres less forest cover than it did in 2000 due to controversial clearcut forestry practices that not only degrade water quality, fish and wildlife habitat but also impede attainment of Oregon’s ambitious greenhouse gas reduction targets.

                      After taking into account carbon stored in longer lived wood products and carbon absorbed by residual forest cover, these emissions were estimated to be 9.75 to 19.35 million metric tons carbon dioxide equivalent (MMT CO2-e) per year. This represents between 16% and 32% of the 60.8 million MMT CO2-e “in-boundary” emissions estimated for the State by the latest (2012) GHG inventory. The timber industry’s operations on its lands in western Oregon are likely one of the State’s largest sources of GHG emissions – second only to transportation. According to Dr. John Talberth, President and Senior Economist at Center for Sustainable Economy, “Oregon’s climate agenda is taking a big hit from industrial forest practices. Yet decision makers continue to look the other way and buy the industry’s rhetoric that since they grow trees, the State should ignore their greenhouse gas emissions and look elsewhere to meet pollution goals for 2020 and beyond. The reality is that reducing the overall rate of timber harvest and promoting alternatives to clearcutting and chemicals are some of the most effective strategies for meeting Oregon’s emissions targets and will help rebuild our forests’ resiliency to fire, floods, and disease.”

                      In 2007, the Legislature adopted targets for reducing Oregon’s greenhouse gas emissions and charged the Oregon Global Warming Commission with developing strategies to achieve them. Yet the Commission, to date, only tracks emissions associated transportation, electricity use, natural gas use, agriculture, businesses and homes and ignores what happens on timber industry lands altogether. This is despite clear legislative requirements to track and evaluate emissions from all important sectors as well as “carbon sequestration potential of Oregon’s forests” and “alternative methods of forest management that can increase carbon sequestration and reduce the loss of carbon sequestration to wildfire.” Moreover, the Commission’s Roadmap to 2020 merely assumes that “Oregon’s forests are a carbon sink, capturing more carbon than they release. As such, Oregon’s forests and its forest sector have and will continue to contribute to the goal of achieving reductions in greenhouse gas emissions by remaining a robust and sustainable sector in Oregon.”

                      The CSE-Geos report tells a dramatically different story. According to Dr. Dominick DellaSala of Geos Institute, “Oregon’s clearcut forestry practices are polluting the climate with the equivalent emissions of over 2 million vehicles or 7 coal-fired power plants making forestry one of the biggest polluters in the State at a time when Oregon is seeking to drastically cut its global warming emissions. It’s time for forestry to be proactive like numerous other businesses in the State in being responsible for a safe climate and ecologically healthy future.”

                      The report was submitted to the Oregon Global Warming Commission, Governor Kate Brown, the Board of Forestry and key legislators. In a letter transmitting the report to the Commission, CSE and Geos have requested a meeting to review the report’s findings and begin the process of enrolling the timber industry in Oregon’s climate agenda.

                      Please click here for a copy of our report, “Clearcutting our Carbon Accounts.”

                      Please click here for a copy of the transmittal letter to the Oregon Global Warming Commission.

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