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Running head: CARBON PRICING 1

Gillian Wilson
Nov. 29 , 2017
gwilson1@linfield.edu
Final Essay

CURRENT QUESTION: Should Legislators approve a carbon pricing policy for Oregon?

PREVIOUS QUESTION: Should Oregon Legislators approve a carbon cap-and-trade policy for

the state of Oregon?


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Table of Contents

Preface​……………………………………………………………………………………………. 3

Abstract​………………………………………………………………………………………….. 6

Introduction​……………………………………………………………………………………... 7

Climate Change Impacts​……………………………………………………………………….. 8

Carbon pricing in the United States and Beyond​…………………………………………….. 9

Comparing Carbon Pricing Policies​…………………………………………………………. 11

Carbon Pricing Policy Design Complications​……………………………………………… 12

Debate Over Policy Revenue Use​……………………………………………………………… 12

Concerns for Creating Carbon Pricing Policies​……………………………………………… 13


Effect on the Economy​……………………………………………………………………….13
Doubt that climate change is human-caused​…………………………………………………14

Other Policies and Ways to Mitigate Climate Change​………………………………………. 15


Renewable Energy​…………………………………………………………………………... 15
Government Regulations​……………………………………………………………………. 16
Building Regulations​………………………………………………………………………... 16
Transportation Regulations​…………………………………………………………………..17
Behavioral Changes​…………………………………………………………………………. 17

Conclusion​…………………………………………………………………………………….... 18

References​………………………………………………………………………………………. 19
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Preface

After taking Information Gathering, I have become better at time and stress management.

In addition, I have become better at interpersonal communication, AP and APA style, finding

reliable sources and writing quickly. I learned how to manage my time when I had assignments

due in both Info Gathering and other classes on the same day. For example, I had my complete

annotations due the same day as a 12 page children’s book that I wrote and illustrated for my

digital art class. I had to start on both projects earlier than I wanted to in order to finish both and

still have them be well done. Another time, I had my 8 annotations due the day before an exam

in my public relations class. I had minimal time to study for the exam, but surprised myself by

still getting an A.

I had to plan ahead when scheduling all of the interviews for class. I did not have trouble

with my in-person interview, but I had to call several people for my policymaker phone

interviews. I tried to plan ahead but I still ended up using the extension on that assignment

because so many people didn’t call me back. As well as time management, these interviews

helped me get better at communication. I do not dislike in-person interviews, but I have always

disliked talking on the phone. No one in my immediate family ever calls each other on the

phone, and so I was hesitant about calling up policymakers and asking for interviews. However,

after the first few calls I felt that it became easier and was less stressful.

After writing an assignment every week for this class I have gotten better at knowing

basic elements of AP and APA style without having to look them up in the style books. I am also

able to better evaluate sources online to see if they are reliable after having analyzed the 20

sources in my annotations. I leave Info Gathering a faster writer than I used to be. I was always a
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fast writer, but now I am even faster. Longer papers of 10 or 20 pages assigned in other classes

no longer seem daunting to me because I have written much longer annotations in Info

Gathering.

This class gave me experience and confidence in my writing and researching abilities.

The skills I gained will be useful whether I choose a career in journalism or public relations. In

my Career Preparation class, I had to do a mock interview for a job listing and I chose to

interview for a social media internship at an environmental nonprofit. The organization I

interviewed for was the Chesapeake Climate Action Network, and one of its goals was to

advocate for carbon pricing. The information that I learned while researching carbon pricing

policy greatly benefitted in my mock interview and helped me get 100 percent on my

assignment. If I want to apply for a real communications job at an environmental nonprofit in the

future, what I learned in this class will also benefit me.

I have a few pieces of advice for future Info Gathering students. First, If you are a person

who doesn’t like making phone calls, write out a script of what you are going to say. It helps

make the call less stressful. Second, students should take it seriously when the professors say to

schedule interviews far in advance. I tried to do this, but still ended up taking an extension on my

policymaker assignment. Third, double-checking everything on your assignment is important and

not doing so could cost you. Double-checking your references, table of contents, and other

organizational elements on your 8 annotations and completed annotations takes way longer than

expected, so do not leave it until the night before or the morning it is due. I spent the whole last

night before my complete annotations were due looking over the assignment. On my complete

annotations I made sure each source was in the main paper and annotations and that each
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annotation had five complete sections. On my previous assignment of 8 complete annotations I

ran out of checking time because I had to study for an exam, and I ended up leaving out a

strength and weaknesses section for one annotation. I simply did not have enough time to study

and finish checking my paper, but in most instances there is enough time to do so if you manage

your time properly. I would say that time management gets increasingly important as the

semester goes on and the assignments get longer.

I would like to thank my instructors for all the work they put into teaching us and giving

us feedback on our papers. My interviewers were also a big help, and I thank them all for taking

the time to talk to me. I would also like to thank my roommate for making me food all the time

when I was busy working on my assignments for this class. Lastly, I would like to thank my

fellow Info Gathering classmates for making the class enjoyable even though we were all

stressed.

Overall, I would say that most of the time Info Gathering was not as scary and stressful as

previous students claimed it would be. However, I can see how it would be an overly difficult

class for student athletes who also have to deal with going to practice and competitions. If I were

a student athlete, I know that I would have had a much harder time with the class and I would not

have done as well. There were definitely a few times throughout the semester that I got overly

stressed, but the rest of the time it was just a mild stress that pushed me to work harder. The class

was a lot of work but I gained many new skills that made it worthwhile.
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Abstract

This paper examines whether Legislators should approve a carbon pricing policy for Oregon. It

first looks at the impacts of climate change and then looks at existing carbon pricing policies in

the United States and beyond to give context, including the Regional Greenhouse Gas Initiative

and the Western Climate Initiative. It compares carbon taxes and cap-and-trade programs and

their issues and benefits.This paper sheds light on why the process of creating a carbon pricing

policy is so complicated, which is mainly because of politics and conflicting opinions. The paper

addresses the views of climate change skeptics as well as alternate ways to mitigate climate

change. These alternate ways are regulations, renewable energy sources and behavioral changes.

The paper concludes that it would be environmentally beneficial and economically possible for

Oregon to implement a carbon pricing policy. However, carbon pricing policies are only a part of

the bigger picture and other measures need to be taken in addition to help counteract climate

change, such as switching to renewable energy sources.


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Introduction

In the last century temperatures have risen and the planet has been warming at an above

average rate. This change in climate is predominantly human-caused and is the result of an

increase in greenhouse gases (mainly carbon dioxide) that are released into the atmosphere

(Hansen et al., 2013, p. 2). If humans and companies continue to emit high levels of carbon

dioxide the consequences for the planet and everyone living on it will be significant. According

to the group Salem 350 (2017), 350 parts per million is the number that scientists say is the safe

maximum for carbon dioxide in the atmosphere. The number is higher and the group’s goal is to

bring it down to safe levels. Limiting carbon emissions either through economic incentives such

as carbon pricing policies or through regulatory measures can help to counteract the effects of

climate change. Carbon pricing is a key policy for reducing emissions by putting a price on

pollution (Tamiotti et al., 2009, p. 17). Nicholson (2009) explains that carbon emissions cost

society economically through environmental damage (p. 133). He says that without a carbon

pricing mechanism, this cost of environmental damage will not be reflected in goods and

services that were produced using emissions intensive processes. Therefore, measures need to be

taken to “ensure [that] businesses and consumers factor in the impact of environmental damage

when they make production and consumption decisions (Nicholson, p. 133). Carbon pricing

policies can be implemented at state-level or nationwide, or they can be regional.

Oregon is in the process of researching and refining a carbon cap-and-trade policy that

could end up being implemented in the future. This paper will explore whether Oregon should

implement such a policy. To do this, the paper will start off by outlining the impacts of climate

change if no policy is put in place. It will look at the two different types of carbon pricing as
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ways to combat climate change and at existing carbon pricing policies for context. It will

examine both carbon taxes and carbon cap-and-trade programs and their issues and benefits. In

addition, the paper will shed light on why the process of creating a carbon pricing policy is so

complicated. It will also address the views of climate change skeptics as well as other options for

climate mitigation. Overall, this paper will answer the question of whether Legislators should

approve a carbon pricing policy for Oregon.

Climate Change Impacts

Climate change has high economic costs, and these costs are only rising. Leahy (2016)

says climate change has cost the United States at least $240 billion a year over the last decade,

not including the damage from recent hurricanes Harvey and Irma. In the future, climate change

will damage the economy even more and could cost the United States $360 billion a year or

more. FitzRoy and Papyrakis (2016) say that the world tends to only look at economic impacts

when considering whether to implement carbon pricing policies, and that people rarely think as

much about catastrophic effects and the lives that could be lost because of the results of climate

change. Because of this, it is important to look at the environmental impacts of climate change

before delving into policies to adapt to and mitigate the effects of climate change.

Anything beyond a 2 to 3 degree increase in temperature is said to be the limit beyond

which it is impossible to avoid the effects of global warming. Unfortunately, average global

temperatures are predicted to increase by 1.4 to 6.4 degrees between 1990 and 2100, which

would exceed this limit (Tamiotti et al., 2009, p. 8). ​These effects of climate change will only

increase over time as temperatures continue to rise. ​Leahy (2016) agrees that climate change is
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already expensive for the United States because it results in costly health issues and damage

from extreme weather such as hurricanes.

Two major environmental consequences of climate change are rising sea levels and

rising temperatures. Hansen et al. (2013) say that ​there is certainty that rising carbon levels will

cause sea levels to also rise and that the emissions will affect the climate for millions of years.

They say that coastal cities will become submerged and citizens will have to move, which will

cause international conflicts from global warming refugees. ​FitzRoy and Papyrakis (2016) say

that poorer countries will experience food and water shortages and they give evidence that

agriculture is already beginning to experience these problems as a result of higher temperatures

stemming partly from climate change. ​FitzRoy and Papyrakis say that “it is widely recognized

that global warming poses a serious threat to agriculture” (p. 23). Capra and Lappé (2017) also

discuss the connection between agriculture with climate change. They say that changes in

temperature will harm crop yield, not to mention that industrial agriculture is a large contributor

to greenhouse gas emissions.

Carbon pricing in the United States and Beyond

In the 1990’s an international panel on climate change was established but it was not until

1997 that a climate change protocol called the Kyoto Protocol was developed. The reason that

implementation of a protocol was delayed was due to resistance from America, Australia and

other industrialized nations that did not want to have limits set on their emissions (FitzRoy and

Papyrakis, 2016). FitzRoy and Papyrakis (2016) say that while the Kyoto Protocol was a step in

the right direction, it is insufficient at setting high enough emissions reduction targets. The

largest carbon trading program to exist as part of the Kyoto protocol is the European Union
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Emissions Trading System (EU ETS). It was created in 2005 it functions by issuing a declining

number of permits for emissions of carbon per ton.

The World Bank Group (2017) says that worldwide there are 46 carbon pricing policies

that have been implemented or will soon be implemented (p. 10). Since 2016, eight new carbon

pricing initiatives have gone into action. The United States has the second largest volume of

emissions covered by carbon pricing policies. (World Bank Group, 2017, p. 10). FitzRoy and

Papyrakis (2016) mention that former president Barack Obama committed the United States to a

national carbon cap-and-trade program, but President Donald Trump plans to repeal the act for

the program before it even goes into action. Apart from the lack of a national carbon pricing

policy in the United States, there are regional programs such as the The Regional Greenhouse

Gas Initiative. The RGGI is a cap-and-trade program that encompasses seven states in the United

States. This program prices emissions by putting a price signal on the carbon emitted from

generation of electricity (Keeler, 2007, p. 358). Keeler says that state and regional carbon pricing

policies are likely to strongly influence the design and creation of a national policy for the United

States (p. 358). Fleeger (2017) agrees with this statement, but adds that a national policy is not

likely to be created under the current presidential administration.

Another regional carbon pricing policy in the United States is The Western Climate

Initiative (WCI). It includes multiple U.S. states as well as areas of Mexico and Canada. One of

the goals of the WCI was to create design recommendations for a carbon cap-and-trade program

that states could use to design their own carbon pricing policies (Warren & Tomashefsky, 2009).

There are also smaller level carbon pricing programs, as discussed by the Salem 350 group
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(2017) who talk about climate change policy at city-level, rather than just state-level. It is

possible for cities or even companies to implement internal carbon pricing policies.

Comparing Carbon Pricing Policies

The two main types of carbon pricing policies that are commonly used are a carbon tax

and a carbon cap-and-trade program (also referred to as carbon trading or carbon

cap-and-invest). The Oregon Department of Environmental Quality (2017) explains that

“cap-and-trade specifies a certain amount of emissions reduction and allows the price to pollute

to adjust based on market demand, while a carbon tax does not prescribe an amount of emissions

to be reduced but specifies a price to emit [greenhouse gases]” (p.2). Each policy works in its

own way and each has advantages and disadvantages. Fairley (2016) says that carbon taxes are

simpler because they do not require additional work such as creating a market for a cap-and trade

program. Kaufman, Obeiter and Krause (2016) also say that a benefit of a carbon tax is that it

will likely have “larger-than expected” reductions in carbon emissions (p.4). On the other hand,

Bluffstone (2017) says that ​one issue with creating carbon taxes is that politics make it difficult

for the tax to be set at a high enough level to be efficient. With a carbon cap-and-trade program

problems may occur because it “needs some additional structure to implement” (Erb, 2017).

Overall, Fairley (2016) says that carbon taxes and cap-and-trade programs both have similar

issues involving setting prices that are too low to make a difference. Kaufman et al. agree that

carbon taxes and cap-and-trade programs have more similarities than they do differences, and in

the end the differences come down to internal aspects of each policy.
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Carbon Pricing Policy Design Complications

The process of coming to a consensus on the details of any carbon pricing policy is

complicated by politics and by groups that all want something different. For example, Danko

(2017) says that there is a group called the Oregon Business Alliance for Climate that supports a

carbon price. However, this group is unique because many other businesses do not actively

support climate change efforts. The Oregon Business Alliance for Climate advocates for carbon

pricing in general, and does not advocate for either type of policy specifically. In comparison,

Fleeger (2017) says that businesses seem to favor the cap-and-trade option because it creates a

market for them. Alternately, Cushman (2017) says that there is a group of Republicans in the

U.S. that support a carbon tax specifically with the condition that all other governmental

environmental regulations are removed. Within these few examples there are already several

conflicting views, and in reality there are many more separate opinions that complicate the

process. Conflicting views on carbon pricing policy design seems to be one of the main issues

that has stopped policies from being created at any level. For effective climate policies to exist,

different groups need to first reach a consensus on policy design.

Debate Over Policy Revenue Use

Kaufman et al. (2016) say that one effective use for the revenue generated from a carbon

pricing policy is to invest it in clean energy technology and climate change adaption.​ ​Alternately,

Erb (2017) says that in order for a carbon tax to not be regressive, the revenue it generates would

need to be used to minimize the negative impact. This would involve giving back money to

disadvantaged communities. The Oregon Department of Environmental Quality (2017) also


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found that the best use of revenue generated from the program would be to benefit the

communities in Oregon that are disadvantaged. In addition, FitzRoy and Papyrakis (2016) say

that ethics play an important role in designing climate change policies. They agree that providing

assistance to lower income people who are more affected economically should be part of any

climate change policy.

Elardo (2017) provides the perspective of an Oregon resident who would be affected by

the tax, and she says that if a carbon tax resulted in higher electricity and gas prices, it would

make her life more difficult. This reinforces the idea that some revenue should go back to

taxpayers. Fleeger (2017) provides an alternate opinion on revenue use from a group that did not

want money to go back to taxpayers. He says that a carbon tax in Washington did not pass when

environmental groups refused to support it because revenue was set to go right to taxpayers and

not into programs that addressed climate change and alternative energy. Overall, the two main

areas that people want revenue to got to are to renewable energy efforts or to disadvantaged and

rural communities.

Concerns for Creating Carbon Pricing Policies

Effect on the Economy

One concern that is often cited in arguments against carbon pricing policies is how they

will affect the economy. Overall, either a carbon tax or cap-and-trade program would result in

higher prices for consumers and businesses. The Congressional Budget Office (2013) says that a

carbon tax would result in increased costs for goods and services that are produced using fossil

fuels and that these higher costs will encourage companies to use production processes with less
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carbon emissions. The Congressional Budget Office (2013) also says that effect on the economy

would depend how revenue from the tax would be used. The options for revenue use were

covered in the previous section. The Oregon Department of Environmental Quality (2017) study

shows that the economic effects of a carbon cap-and-trade program in Oregon would be small

overall but would affect certain industries more than others. The way to mitigate the effect on

these industries is “freely allocating some allowances to industries regulated by the program that

are exposed to competition in other jurisdictions (Oregon Department of Environmental Quality,

p. 4). Overall, the biggest effect of carbon pricing policies is higher prices. But, this effect would

not be significant if counteracted with revenue going back to affected groups.

Doubt that climate change is human-caused

Climate change skeptics do not recognize that global warming is a significant issue, or

they do not believe that carbon emissions contribute to it. Harvey and Waldman (2017) say that

“climate skeptics” claim that carbon emissions are positive for earth’s plants. While this may be

true, it ignores all the other significant negative effects such as extreme weather and health

issues. In addition, FitzRoy and Papyrakis (2016) say that the majority of scientists agree that

global warming is happening and that it is because of human activities. Essentially, climate

change skeptics may have some truth in their arguments but these arguments do not look at the

big picture.

Other Policies and Ways to Mitigate Climate Change

Renewable Energy

Coal is not a renewable energy source because it takes millions of years to create. Coal

mining is expected to get more expensive as resources are depleted and it might only last for
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another 150 years (Nicholson, 2009, p. 53). In comparison energy sources like wind and solar

energy are renewable. Each renewable energy source has its benefits and downsides. Solar

energy generates heat and electricity without any waste or pollution and the only cost associated

with it is equipment installation and maintenance. The downside is that solar energy is not

available at night and is decreased in cloudy conditions. In addition, “significant capital

investment” would be needed to use solar energy domestically for electricity (Nicholson, 2009,

p. 58). Wind power such as wind turbines are another renewable energy source that are

considered to be one of the cheapest types to produce electricity. However, the wind is not

always blowing, which limits the times that wind turbines can generate power. Wind power is

also still more expensive than non-renewable energy sources. Hydropower (power from moving

water) “is the most commonly used source of renewable power, with over 80 percent of all

renewable power coming from [it]” (Nicholson, 2009, p. 63). The other less commonly known

types of renewable energy are geothermal (heat generated from within the earth), biomass

(material from living plants) and hydrogen. All of the options for renewable energy look

promising in different ways, and the main deterrent from using them is the cost. However, if

non-renewable energy sources become more expensive in the future it could result in more

people embracing renewable energy sources. Adoption of renewable energy sources goes

alongside carbon pricing policies because higher prices on carbon emissions will help steer

people away from high carbon products and toward low carbon products created using renewable

energy.
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Government Regulations

Erb (2017) says that carbon pricing is superior to Federal Government regulations on

emissions. Government regulations include The Clean Air Act or the Clean Power Plan.

According to Erb, putting a price on carbon will be less expensive than these Federal

Government regulations on carbon emissions. However, there are also industry regulations that

can be put into place.

Building Regulations

Matthew McLaughlin (2013) writes about how engineers have to take climate change

into account in their work. He says that most buildings were not designed to withstand the

extreme weather that is now occurring. In the last 15 years there was a 85 percent increase in the

amount of weather disasters in the United States and climate change makes extreme weather

happen more frequently. Both engineering disciplines and all levels of government are looking at

how climate change will affect infrastructure. For example, local governments in Florida have

created ​regulations to help deal with the consequences of climate change. ​The author says that

engineers have an important role in addressing climate change by adapting building to the

inevitable effects that are happening and will continue to happen in the future. If buildings are

not redesigned, it will put the health and safety of the public at risk. In the future, engineers

could even become liable for not taking climate change into consideration when designing

infrastructure.
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Transportation Regulations

Silverman and Appel (2017) say that Northeastern states want to limit emissions from the

transportation sector because it is the second largest contributor to emissions. Steps to limit

emissions from this sector would include a cap-and-trade program for gas companies as well as

encouraging auto companies to create electric vehicles. The authors say that even though the

federal government is not increasing greenhouse gas standards, if the Northeastern states work

together they could have enough impact to pressure automakers. As for electric cars, the

transition toward them is happening more quickly because of regulations like the federal

corporate average fuel economy standards. The authors say that General Motors plans to

“launch” at least 20 new electric vehicles by 2023 and Ford will be creating 13 new electric cars

in the next five years. The authors say that an increase in electric vehicles paired with a carbon

pricing policy for gas distributors will be effective in decreasing carbon emissions from the

transportation sector.

Behavioral Changes

Bluffstone (2017) says that a significant part of climate action involves changing

people’s behavior. An example of a behavioral change would be normalizing recycling so that

more people do it. ​FitzRoy and Papyrakis (2016) also look past mitigation policies and toward

changing public behavior. They explain that even if changing to become more sustainable will

benefit people in the long run, there is a psychological cost that goes along with changing habits.

For this reason, public education on environmental issues is essential to encourage change.
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Hansen (2013) looks beyond legal issues and points out that the public may need to understand

the moral dimensions of climate change before they are stirred into action.

Conclusion

Carbon pricing policies are an important and necessary part of a larger group of actions

and policies that are needed to counteract climate change. Since both carbon taxes and carbon

cap-and-trade policies have their advantages and disadvantages, it comes down to the design

details to determine which policy will work best for Oregon. When taking into account the

amount of time it takes to design a carbon pricing policy, it seems that Oregon is more likely to

choose a cap-and-trade program because a study was already done on its effects. If Legislators

agree on a carbon cap-and-trade program it will probably be implemented sooner than if the

Department of Environmental Quality went back to the research stage and looked into a carbon

tax instead. Because of this, implementing a carbon cap-and-trade policy would be beneficial to

Oregon. The real effect would depend on details such as what areas revenue was allocated to. In

order for the program to not have a negative effect economically, revenue should go toward rural

and low-income groups. In addition, it would be beneficial if some of the revenue was set aside

to fund renewable energy initiatives. Carbon pricing policy alone may not make lasting changes

in carbon emissions in Oregon unless it goes alongside other changes such as a transition to

renewable energy and public education on environmental issues.


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