Sustainable Business Oregon: PSU researchers find carbon tax would clear the air, bolster Oregon's budget
Author: Andy Giegerich, Sustainable Business Oregon editor
Posted: March 11, 2013


Read the full story at Sustainable Business Oregon

A Portland State University study found that carbon taxes could reduce Oregon's "distortionary income taxes," an issue that has vexed lawmakers for years, as well as provide new revenue channels.

The study, from the school's Northwest Economic Research Center, maintains that "putting a price on carbon in Oregon can result in reductions in harmful emissions and have positive impacts on the economy."

Oregon's House and Senate are considering four carbon tax-related bills during the current session. Oregon Gov. John Kitzhaber has also backed the notion.

Tom Potiowsky, the former Oregon state economist who leads the Research Center, said a $30 per ton carbon tax would raise $1.1 billion in 2015. If the tax graduates over the years to higher levels — that's how British Columbia approached the levy — the $60 per ton the state would charge in 2025 would bring some $2.1 billion to Oregon's coffers.The money could help steady Oregon's shaky revenue system. Because Oregon doesn't have a sales tax, state finances are frequently volatile because the government relies heavily on property values and income levels.

Potiowsky's team also determined that reinvesting 10 percent of any carbon tax revenue could generate nearly 2,800 jobs.

"The repatriation of taxes is an importance component of it," Potiowsky said. "You've got a method to reduce greenhouse gases, it's a cost that people know, so it's not like cap-and-trade ... If there's been talk about taxes being too high on households, here's a method to try to lower those without losing overall tax revenue to the state."

The study also noted that a tax could help cut carbon emissions from about 42 million tons in 2012 to 34 million tons over the next 20 years.

The state's goals call for Oregon manufacturers to emit only 28 million tons by 2020. To get there, the state would need to impose a dramatically higher carbon tax, of $100 per metric ton, than, say, British Columbia's $30 per metric ton.

"In British Columbia, there's no indication that their economy was harmed by having the tax," Potiowsky said. "And there's evidence that their carbon emissions did go down."