Citizen's View: Carbon credits: a Salem Switcheroo
Bureaucrats in Salem have pulled the wool over taxpayers eyes again.
The controversial Low Carbon Fuel Standard (LCFS) is quietly transforming into a secret subsidy for existing light rail and other mass transit, rather than the intended purpose of lowering emissions.
It was recently reported that officials are considering allowing existing streetcars, light rail and electric bus lines in Portland and Eugene to trade LCFS credits to gas companies.
The goal of the law was to compel fuel companies to produce cleaner gasoline. Companies that invest in refining processes that reduce carbon emission would get a gold star (to use a grade-school metaphor) as a reward that they can then sell to companies that didnt. The companies that buy the gold star in order to sell their dirtier fuels would then have a higher cost basis, making the cleaner fuel company more competitive. More gas stations will then carry the cleaner, cheaper fuel.
Instead of buying gold stars, the fuel companies were expected to eventually earn their own. And over time, that would probably happen. Unless this turns out to be another Salem switcheroo. Spoiler alert: It is.
Demonstrating a commitment to green energy carries a heavy price tag, and our streetcars, light rail and electric buses dont come close to paying for themselves with ridership alone. Right now, payroll and self-employment taxes fund about half of TriMets operations. And its not enough.
Officials at the Department of Environmental Quality are now considering allowing light rail, streetcar and battery-powered buses to participate in the LCFS program. This theme came around previously with the proposal to do away with coal in Oregon which is a concept I support. The Department of Environmental Quality may soon be granted authority to sell the same gold stars that were supposed to be earned by gas companies that invest in making fuels cleaner.
Heres why thats not fair: The law was intended to incentivize gas companies to make cleaner fuel. If they can buy credits from existing public transportation agencies, they lose that incentive. The transportation agency doesnt need to improve on anything to receive the credit their systems are already in place, and already heavily subsidized.
So what do you call a gifted tax credit that can be sold on the open market? Thats right a subsidy. The statewide Low Carbon Fuel Standard becomes nothing more than a gas tax secretly intended to subsidize public transit in two of our biggest cities.
Not many people invest the time into understanding how carbon tax credits work its boring, after all. We elect people to represent our best interests who are paid to scrutinize these complex policy issues and make good decisions. Instead, theyre exploiting our collective lack of comprehension and playing three-card monte with our money to fund their personal agendas. The proposal is a carbon intensity reduction policy goal wrapped up in an administratively challenging program that will provide an opportunity to be manipulated by the chosen few.
Like most Oregonians, Ive had enough of Salems crony-capitalist politicians using our money to help the well-connected benefit from legislative and administrative generosity. The cost to you, according to published estimates, is going to be between 4 cents and 19 cents per gallon at the pump.
Jeff Gudman is a Lake Oswego City Councilor and the Republican candidate for state Treasurer.