Moving Beyond Symbolism

By John A. Charles, Jr.

Last week Governor Kate Brown gave a speech to Portland activists promising to secure carbon-pricing legislation in next year’s one-month legislative session. A few days later, she met with Interior Secretary Ryan Zinke and urged him to maintain or expand the Cascade-Siskiyou National Monument in Southern Oregon.

Clearly, the Governor is getting bad advice about environmental priorities. Carbon dioxide is not a pollutant; it’s a beneficial gas that is essential for plant growth. If the Governor continues Oregon’s “war on carbon,” she will impose great costs on the economy with no offsetting benefits.

Similarly, there was no need for the Governor to lobby on behalf of national monument expansion when Oregon already has plenty of federal land in protected status. She should have used her time with Secretary Zinke to argue for improved management of BLM lands in Oregon, including forest thinning and increased timber harvesting. Without active management, all public lands—including parks, wilderness areas and national monuments—will continue to be threatened by Oregon’s top environmental risk: catastrophic wildfires.

Holding photo ops to tell her supporters exactly what they want to hear is not leadership. The Governor needs to get serious about environmental problems.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

The Paris Agreement Was Symbolism over Substance, Leaving Was the Right Call

By John A. Charles, Jr.

President Trump made the right call last Thursday when he terminated participation by the U.S. in the Paris Climate Agreement.

The central problem with the Paris agreement was that the alleged benefits were speculative, long-term, and global; yet the costs to Americans would be real, immediate, and local. It was a terrible deal for American taxpayers who would have been required to send billions of dollars to an international green slush fund, with no accountability.

Pulling out of the Paris agreement does not mean that the climate change apocalypse is upon us. The carbon intensity of the U.S. economy has dropped by 50% since 1980 simply through technological innovation and the dynamic market process. If reducing carbon dioxide is a worthy policy goal—which is just an assumption—the United States already has an impressive track record of reducing emissions.

The Paris agreement was always a triumph of symbolism over substance.

The man who predicted that the U.S. would pull out of the Paris Climate Agreement is coming to Portland this Friday, June 9. Myron Ebell is director of the Competitive Enterprise Institute’s Center for Energy and Environment. He led the Trump Presidential Transition’s agency action team for the EPA and will give a unique perspective on the new administration’s environmental agenda.

Visit cascadepolicy.org for tickets to our Friday, June 9th luncheon. Reservations are required.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

 

Statement regarding President Trump’s decision to withdraw the U.S. from the Paris accord on climate change

FOR IMMEDIATE RELEASE

Media Contact:

John A. Charles, Jr.

(503) 242-0900 

PORTLAND, Ore. – Today Cascade Policy Institute’s President and CEO John A. Charles, Jr. released the following statement on President Donald Trump’s decision to withdraw the United States from the Paris accord on climate change:

“President Trump made the right call today in terminating participation by the U.S. in the Paris climate change agreement.

“The central problem with the accord was that the alleged benefits were speculative, long-term, and global; yet the costs to Americans would be real, immediate and local. It was a terrible deal for American taxpayers who would have been required to send many billions of dollars to an international green slush fund, with no accountability.

“Pulling out of the Paris agreement does not mean that the climate change apocalypse is upon us. The carbon intensity of the U.S. economy has dropped by 50% since 1980 simply through technological innovation and the dynamic market process. If reducing carbon dioxide is a worthy policy goal—which is just an assumption—the United States already has an impressive track record of reducing emissions.

“The Paris accord was always a triumph of symbolism over substance. Now that American participation has ended, we can appropriately move on to issues of real significance.”

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity.

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Overtaxed and Underbuilt

By John A. Charles, Jr.

An Oregon Legislative committee is proposing a massive series of tax increases to pay for various transportation projects.

The proposal calls for higher taxes on vehicle registration, increased gas taxes, a new sales tax on motor vehicle purchases, a statewide employee tax to subsidize transit, and a new bicycle sales tax.

While there are many bad ideas on this list, perhaps the most offensive is the sales tax on vehicle purchases. It is being crafted so that most of the money would be diverted from highway maintenance into something called the “congestion relief and carbon reduction fund.”

Anything that includes “carbon reduction” in the title is guaranteed to be a boondoggle.

Before this proposal goes any further, legislators should consider a bill simply focusing on improving the road system. We all benefit from better roads.

In addition, they should try to charge people based on actual road use, not the mere ownership of vehicles. The gas tax is a good surrogate for this, so it would make sense to increase the gas tax rate while lowering vehicle registration fees. This would be fair to motorists, while still raising the funds needed for road improvements.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

President Trump’s Environmental Agenda: An Insider’s Perspective

Cascade Policy Institute Hosts Lunch with Special Guest Speaker Myron Ebell

President Trump’s Environmental Agenda: An Insider’s Perspective

President Trump’s administration has begun to implement a long list of campaign promises on energy, climate, and environmental policy. Taken together, these policies represent the most ambitious attempt to deregulate energy production and consumption ever undertaken.

But is deregulation possible?

Myron Ebell will speak at Cascade Policy Institute’s June 9 luncheon event

at Ernesto’s Italian Restaurant in Portland.

Ebell led the Trump Presidential Transition’s agency action team for the Environmental Protection Agency. He will discuss how the President’s deregulatory agenda is proceeding and its prospects for getting the economy going again after a decade of stagnation.

Reservations are required. Get yours today!


Myron Ebell is director of the Competitive Enterprise Institute’s Center for Energy and Environment, which is one of the most effective advocates for Free Market Environmentalism. He also chairs the Cooler Heads Coalition, an ad hoc coalition of 28 nonprofit free market and conservative groups that question global warming alarmism and oppose energy-rationing policies. CEI and the Cooler Heads Coalition led the successful decade-long fight to defeat cap-and-trade legislation.

From September 2016 to January 20, 2017, Mr. Ebell led the Trump Presidential Transition’s agency action team for the EPA. His involvement in the transition led to public protests and marches in several cities in America and Europe. In one of countless fundraising emails and letters from environmental pressure groups, Michael Brune, president of the Sierra Club, wrote that “Myron Ebell is…one of the single greatest threats our planet has ever faced.”

A native of Baker County, Oregon, where he grew up on a cattle ranch, Mr. Ebell earned degrees at Colorado College and the London School of Economics (where he was a student of the renowned political philosopher Michael Oakeshott) and did graduate work at the University of California, San Diego, and at Peterhouse, Cambridge University in philosophy, history, and political theory.

For complete information and to reserve your tickets, click here.

Surprise! Renewable Energy Mandates Are Actually Fossil Fuel Mandates

By John A. Charles, Jr. and Lydia White

The Sierra Club and other environmental groups are objecting to PGE’s plan for new, natural gas-powered generation to help replace the electrical output that will be lost when PGE shuts down the Boardman coal plant in 2020. What these groups should admit is that they are the ones responsible for that decision.

Last March, the Oregon legislature adopted the Oregon “Renewable Portfolio Standard” (RPS), which requires PGE to procure 50% of its retail load from designated renewable energy sources by 2040. This requirement, enacted with few public hearings in the rush of the one-month session, was demanded by environmental groups as a way to burnish the state’s mythical green power credentials.

The RPS is essentially a mandate for more utility-scale wind and solar power. These are known as “intermittent resources” because wind farms don’t generate any power about 68% of the time, while solar goes dead about 71% of the time. Being forced to rely on randomly-failing generators means that utilities must have back-up sources (known as “spinning reserve”) in order to preserve grid reliability.

Electricity cannot be stored like other commodities. As soon as electricity is fed into the grid, it travels at the speed of light through many pathways until it is consumed almost instantaneously by a household, factory, or some other end-user. Supply and demand have to be matched at all times in order to avoid grid failure, or “blackout.”

Right now, wind and solar only account for about 5.69% of Oregon’s electricity supply. As lawmakers keep ratcheting up RPS mandates towards 50%, the need for spinning reserve will go up as well. The only practical fuel is natural gas.

These new gas-fueled plants will be running even when not used, in order to be ready when the windmill blades stop turning or the sun goes down. This will result in wasted fuel and increased air pollution.

If utilities must have spinning reserve, can we predict the need for it? This question was the subject of a paper recently published by the National Bureau of Economic Research (NBER). The researchers found that a 1.0 percentage point increase in the share of fast-reacting fossil generation capacity in a country is associated, on average, with a 0.88 percentage point increase in the long-run share of renewable energy.

In other words: more wind and solar = more fossil fuel use. Oregon legislators rushed through the RPS law so quickly that they forgot about the law of unintended consequences.

PGE and PacifiCorp will both be turning to increased natural gas generation over the next 20 years because they don’t have a choice. Customers want their electricity 100% of the time, not 30% of the time. If environmental groups are offended by the use of more natural gas, they should admit that the 50% RPS requirement was a mistake and ask legislators to repeal it.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. Lydia White is a Research Associate at Cascade. This article originally appeared in the Portland Business Journal on January 12, 2017.

Money

Will the PUC Make Oregon’s Solar Energy Incentives Equitable?

By Lydia White

In accordance with House Bill 2941, the Public Utilities Commission (PUC) is making recommendations to the Oregon State Legislature to ensure Oregon’s solar energy incentives are equitable, efficient, and effective.

One recommendation is to modify the compensation method for solar energy, net metering. Under net metering, solar owners consume energy their panels produce. When energy produced is insufficient, solar owners purchase additional energy from traditional sources. When excess energy is produced, solar owners sell energy. Solar owners are compensated at above-market rates and are exempt from paying their portion of incurred costs. Such costs include operation and maintenance of the grid and “spinning reserves,” the alternative power source utility companies run continuously in case solar produces less energy than projected. The state’s incentive structure shifts costs from solar owners to non-solar ratepayers. As the number of solar owners increases, ratepayers bear higher costs. The PUC is recommending these costs instead be shifted to taxpayers. While the PUC proposal’s efforts to alleviate inequity are commendable, their proposed recommendations still constrain Oregonians.

Although solar owners are double-dipping into the taxpayer pot—once when receiving heavily subsidized (and therefore low-cost) solar systems and again when receiving above-market compensation—the solar community is vehemently protesting. Despite the outcries, the PUC should pursue its recommendation to transition from net metering while also rejecting subsidies from ratepayers and taxpayers alike. By doing so, the PUC’s recommendations could relieve Oregon’s ratepayers from substantial burden.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Portland Schools Schedule Book-Burning Party

The Portland Public School board recently voted to prohibit textbooks or classroom materials questioning the mainstream thinking about climate change.

The decision has sparked an outpouring of commentary, with many writers supportive of the School Board.

However, the wording of the Board resolution should greatly concern parents of Portland public school students. Resolution No. 5272 is two pages long, but the most chilling part is the final sentence:

“[Portland Public Schools] will abandon the use of any adopted text material that is found to express doubt about the severity of the climate crisis or its root in human activities.”

The primary purpose of education is to teach students how to be critical thinkers. Now that the School Board has declared that expressions of doubt about complex scientific topics will be banned, what is the point of going to school?

Regardless of the subject we should encourage students to be skeptical. The more questioning, the better. They will be poorly prepared for adult living if they spend their childhood years being spoon-fed in schools where skepticism is prohibited.

Public education already faces a growing challenge from private schools, online learning, and home-based education. If Resolution 5272 is upheld, Portland Public Schools will give parents one more reason to leave.

Get Ready for High-Cost Electricity

In the recently concluded session of the Oregon legislature, the big environmental “win” was Senate Bill 1547, a bill that was hatched in secret by two large utilities and a group of environmental activists. The bill promises to rid the Oregon electricity grid of coal-fired power and to double the required levels of “renewable energy” from 25 percent to 50 percent by 2040.

When the legislature was debating SB 1547, members were calmly assured by proponents that the cost of these requirements would be minimal. They were reminded that the existing standard of 25 percent (by 2025) had always included an “off-ramp” if the cost of compliance reached 4 percent of utility revenue—and the costs had never come close to 4 percent.

Indeed, compliance costs for PGE in 2014 were only 0.24 percent of revenue (or $4.2 million in dollar terms). Obviously, ratepayers had nothing to worry about.

This storyline was especially soothing when it was repeated by Sen. Lee Beyer, former member and chair of the Oregon Public Utilities Commission. In his grandfatherly way, he told his colleagues that everything was under control.

The problem with this narrative was that it’s highly misleading. What the advocates didn’t say was that the reason the cost of compliance so far has been low is that utilities only needed to get 10 percent of their power from designated renewable energy sources through 2014. However, from 2015 to 2019, the requirement jumps to 15 percent, and rises steadily after 2020.

No one actually knows how much it will cost to get 50 percent of the power from “green energy” sources by 2040, but it’s going to be expensive.

We get a hint of this in the PGE forecast for 2017-2021. For those five years, PGE predicts that compliance costs will total $335 million, or 3.46 percent of revenue. Those costs will have to be paid for by ratepayers, and they will get nothing in return.

Under SB 1547, the highest costs are back-loaded. Advocates know that when the program blows up a decade from now, it will be someone else’s problem. Many of the legislators who voted for it will be sitting poolside collecting their PERS checks.

Senate Bill 1547 is a fraud. Virtually every claim made by proponents is false. Instead of increasing our “energy security” by making the Oregon grid “coal-free,” it will dramatically increase the risk of power failure by force-feeding huge amounts of intermittent sources like wind and solar into the grid. In engineering terms, the electrical distribution system requires stability; SB 1547 mandates volatility.

System costs have to rise because consumers will be paying twice for the same power—once for the subsidized wind farms and again for the adult power sources used to back up the wind farms that sit idle most of the time.

The advocates also claim that SB 1547 will get coal out of the system by 2030; but Oregon’s only coal-fired power plant will be shut down in 2020 anyway. The notion that this bill will affect coal used in other states is laughable.

In his floor speech, Rep. Cliff Bentz summarized his criticism of SB 1547 by saying it was “long on symbolism, short on results, and really expensive for ratepayers.” Nonetheless, a majority of legislators voted for it, and the governor signed it.

Ratepayers deserved so much better. In 2017, repealing SB 1547 should be at the top of the legislative “to-do” list.

Mayor Hales’s Environmental Vision Lacks Grounding in Reality

Recently, Mayor Charlie Hales gave a speech welcoming out-of-town dignitaries visiting Portland as part of “World Environment Day.” Speaking before an obviously friendly audience, Mayor Hales made a number of claims that show a lack of critical thinking about environmental issues. Four in particular deserve comment.

First, the Mayor said that the city “must urge” the Oregon State Treasurer to divest of all state holdings in fossil fuel. This might be a harmless gesture if the Mayor did that with his own personal portfolio, but forcing public investment managers to sell off holdings for strictly political reasons would be a violation of their fiduciary trust to those whose funds they manage. Arbitrarily selling assets would increase transaction fees and could reduce total returns to beneficiaries by disposing of securities at discounted prices (relative to true market values).

Moreover, divesting fossil fuel assets would have no effect on any measurable environmental problem.

The Mayor also invoked the tired “Peak Oil” argument that companies managing fossil fuel assets must inevitably fail because oil, gas, and coal are finite resources. But that prediction has been wrong for over 100 years and will continue to be wrong for the foreseeable future. Indeed, at least one international energy statistical agency has predicted that the United States likely will be energy-independent by 2020 due to technological innovations in oil and gas exploration that are causing large increases in production.

Mayor Hales further warned that we must act before the “carbon bubble bursts.” While it is true that we currently have a carbon bubble, it’s not the one he is thinking of. It is a government-created buying binge in carbon offsets, renewable energy credits, and green tags. These products, which exist primarily to satisfy regulatory mandates, have no underlying assets backing them and represent one of the largest Ponzi schemes in history. When the fraud is finally exposed, holders of these worthless securities will be forced to write off billions of dollars in losses.

If the Mayor is really concerned about avoiding the subprime carbon market, he should publicly instruct his staff to quit buying renewable energy credits.

Second, Mayor Hales pledged to begin implementation of the resolution passed last year requiring 100% of city electricity from politically correct “renewable sources.” Unfortunately, the Mayor is more than a decade late to this party, and the beer is stale. Back in 2001, the City Council pledged the very same thing, to be implemented by 2010. When that deadline passed, the city had managed to reach only about seven percent of the goal.

Not only is this goal unachievable for the city, it’s not even desirable. Since large-scale hydroelectric projects and nuclear power plants are typically excluded by green power advocates as “renewable” energy sources, the only way to achieve 100% renewable energy purchasing in the short term would be through massive expenditures for utility-scale wind energy. But since wind is guaranteed to fail randomly, it must be backed up at all times by base-load sources such as hydro, natural gas, and coal. If hydro steps in when wind fails, there is no net environmental gain. It’s one renewable substituting for another. If coal and gas are used, there is a net environmental loss, since these sources must be kept running even when not needed.

The Mayor’s vision is akin to forcing a rental car company to buy a large percentage of cars that randomly stop working, and then maintaining a back-up fleet that is kept idling 24 hours a day to rescue the stranded cars on a moment’s notice. Nobody would propose such a policy for an auto fleet; and environmentally conscious politicians should not advocate it for the electricity grid, either. Wind power is an expensive nuisance to the grid and should be discouraged, not mandated.

Third, the Mayor pledged that within 10 years, the bike “will be the preferred mode of transportation for all trips under three miles in Portland.” While politicians love to make outrageous predictions―since no one can disprove them―there is nothing in the recent past that suggests bicycling will come anywhere close to meeting this forecast. Bicycling has achieved a healthy market share for commuter trips into the central city, but over a 24-hour period for the entire city, cycling is minimal. Even in the South Waterfront district, a massively subsidized high-density neighborhood with a vibrant cycling population, 79% of all daily passenger-trips to and from the district are made in motorized vehicles.

Finally, Mayor Hales pledged that over the next 20 years, the Council will identify new revenues that will allow the city to turn every street in Portland into a “Complete Street” with pervious surfaces, street trees, and sidewalks. Given that the condition of Portland streets has been declining for years and been the subject of several scathing reports by the Portland City Auditor, I’d suggest a much more humble goal for the Mayor. He should stop the pork-barreling of massive amounts of tax dollars on streetcars, light rail, and “traffic calming” projects (the primary cause of our current road system embarrassment) and begin allocating most transportation dollars to fixing and maintaining what we have.

One of the great success stories of the last century has been the steady improvement in environmental quality due to market-driven technological change. The best way Portland politicians can help continue this trend is to focus on the fundamentals of making the city a great place for entrepreneurs.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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