Category: Environment

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Think TriMet’s New Electric Buses Run on Wind Power? Think Again.

By Rachel Dawson

TriMet unveiled five new battery-electric buses (BEBs) in April 2019, the sides of which all donned images of windmills and sweeping gusts of wind. The BEBs each cost around $1 million, nearly twice as much as a traditional diesel bus. And these buses are just the beginning: The TriMet board voted last year to replace the entire fleet with battery-electric buses for $1.18 billion by 2040, a $500 million premium over a diesel fleet.

TriMet has been hailed an environmental hero for “riding the winds of change.” TriMet Spokesperson Roberta Altstadt claimed that TriMet was the first in the United States to “operate an electric bus on 100% renewable energy.” Without further research, it would be easy to think that TriMet’s new buses ran on clean wind energy. And that is exactly what TriMet is hoping you would think. But you would be wrong.

If the buses don’t run on 100% wind power, how is TriMet able to get away with saying they do?

TriMet spends $228.75 per month on what are known as renewable energy certificates (RECs) from PGE. RECs are a tradable commodity sold by renewable energy facilities (such as wind farms) to the wholesale market, that purport to represent the “environmental amenities” of certain renewable energy projects. By purchasing the RECs, TriMet has bought the legal right to claim it is using renewable energy; however, the agency has not purchased any energy itself.

This would be like my paying someone else to exercise at the gym for me, and then telling my family and friends I go to the gym. The person I pay reaps both financial and physical benefits while I merely get to pretend I have them.

Supporters of RECs claim the certificates offset fossil fuels and pay for the generation of new renewable energy. However, these claims are not entirely accurate. According to Daniel Press, a Professor of Environmental Studies at UC Santa Cruz, “RECs do little to reduce emissions in the real world because they have become too cheap to shift energy markets or incentivize businesses to build new turbines.” The income generated from RECs does not come close to the millions needed to construct more wind turbines, which means that RECs themselves don’t offset fossil fuels.

Despite its claims, it would be impossible for TriMet to run on 100% wind power unless it disconnected from the regional mixed grid and hooked up to its own personal wind farm. Even then, TriMet would be forced to rely on other backup power sources due to the volatility of wind generation.

While a wind turbine may be available to produce energy around 90% of the time, the average wind farm in the United States in 2018 had a capacity factor of only 37.4%. The capacity factor refers to the amount of energy produced in a year as a fraction of the farm’s maximum capacity. Wind farms produce electricity when winds reach about nine miles per hour and stop at roughly 55 mph to prevent equipment damage. If the wind isn’t blowing (or isn’t blowing strongly enough), little to no power can be generated.

This poses problems, as the electrical grid requires constant equilibrium or blackouts will result—power supply must meet energy demand. Every megawatt of wind power has to be backed up by an equal amount of traditional, “non-green” sources like coal and natural gas to account for times when wind energy isn’t generated. This would be like keeping a car constantly running at home in case the one you’re driving on the road fails.

Instead of a wind farm, TriMet receives its electricity from Portland General Electric, the same mixed grid your home is likely powered by. In 2020, this mixed grid will be made up of 37% natural gas, 28% coal, 18% hydro, 15% renewables, and 2% purchased power (power purchased on the wholesale market). Since wind only makes up a portion of renewables used by PGE, less than 15% of the electricity used by the “wind” buses is powered by wind. A greater percentage of the electricity used by TriMet’s BEBs comes from coal plants than wind farms.

If TriMet were honest with its riders, it would replace the windmills on the sides of the new buses with coal, natural gas, and hydroelectric power plants. In the name of accuracy, TriMet could place a windmill in the corner, demonstrating the small percentage of power generated by wind farms.

So instead of riding the “winds of change,” keep in mind that you’re just riding a really expensive bus.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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You and Your Car: Portland Public Enemy No. 1

By Micah Perry

Driving around Portland could get a lot more expensive. The Portland City Council just passed a resolution to create an “equitable mobility task force” to study how imposing steep new fees on city drivers could reduce congestion.

Proponents say the fees will help Portland meet its carbon reduction goals. They also claim that, by increasing the cost of driving and parking, low-income residents and people of color will be better off. Ironically, the city itself noted that “65% of peak car commuters in Portland are medium or low income,” meaning any new fees will actually hurt the communities they seek to help.

Fees being considered include increased parking prices, Uber or Lyft surcharges, a mileage tax, and tolls to enter certain areas of the city. This shouldn’t come as a surprise to most, as Portland frequently pursues anti-car policies, such as a citywide gasoline tax, a reduction in street parking downtown, and the city’s notorious “road diets,” which essentially create congestion by design.

If Portland truly cared about easing congestion amid a growing population, it would add lanes wherever possible. And, rather than try to tax people out of their cars, the city should reevaluate its approach to transit and create a public transportation system that can be attractive to commuters without having to resort to coercion.

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

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Portland’s Clean Energy Tax: A High Cost with Low Benefit

By Rachel Dawson

In January 2019 the City of Portland implemented a voter-approved a 1% tax on certain “retail sales” within Portland to fund clean energy projects and jobs training. This tax will be applied to retailers with $1 billion or more in total sales, $500,000 of which must be from within Portland city limits. Retailers can pass the cost of the tax along to the purchaser of the good or service. Thus, it is likely consumers—not retailers—will ultimately be paying for it. Once collected, these funds will be administered by the Portland Clean Energy Fund.

Despite claims that the Portland Clean Energy Fund is unique, the energy efficiency projects funded by this tax are already being completed by the Energy Trust of Oregon (ETO) and Oregon Housing and Community Services through a surcharge on ratepayers’ utility bills. In some cases, the Portland Clean Energy Fund will be triple-taxing Portland utility ratepayers.

Approximately 40-60% of funds will be allocated to clean energy projects including renewable energy, conservation, and green infrastructure for residential, commercial, and public school projects. At least one half of clean energy project funds must benefit low-income residents and minorities. The Portland Clean Energy Fund will also be used to help Portland meet its goal of using 100% community-wide electricity from renewable sources by 2035.

Many voters believed this tax would only affect large retailers. However, senior deputy city attorney Kenneth McGair admits the tax will affect public works projects and construction equipment wholesalers, as well as disability insurance plans and insurance policies. The only exempt transactions will be groceries, medicine, and health care services. Due to its impact on construction, this tax will increase the cost of taxpayer funded projects such as affordable housing.

While 1% may seem like a small amount, it will add up to millions of dollars when applied to high-cost construction projects. For example, the tax will add an estimated $2 million to Lincoln High School’s $200 million renovation costs.

Voters may be unaware that they are already paying for similar clean energy projects through a surcharge on their utility bills known as the Public Purpose Charge (PPC). The tax rate from the PPC has grown to over 6% for many electric utility customers and up to 5.8% for ratepayers who consume natural gas.

ETO uses funds from the surcharge to support energy efficiency projects for low-income families (low-income weatherization), rehabilitation and construction of low-income housing, above-market renewable energy, and energy conservation and market transformation. Not only will the Portland Clean Energy Fund be completing similar projects to ETO’s, but ETO projects that involve construction, such as their affordable housing and school green infrastructure projects, will now be further taxed to support energy efficiency. Some ETO ratepayer-funded clean energy projects will be taxed to further fund clean energy projects. And many Portland area residents will be caught paying for both.

In addition to the ETO, the Oregon Housing and Community Services (OHCS) agency also benefits from the PPC surcharge to fund additional low-income weatherization projects, arguably the same demographic the Portland Clean Energy Fund aims to help.

One of these tax programs should be repealed: either the Portland Clean Energy Fund or the Public Purpose Charge. Doing so will ensure that Portland residents are not double- or triple-taxed for multiple programs that provide the same services.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Portland’s Ill-Considered Climate Action Tax

By Micah Perry

Last fall, Portland voters approved a new 1% tax on large retailers to help the city achieve the goals of its Climate Action Plan. This measure has had serious consequences for Portland businesses.

Before the vote, proponents of the new tax described large retailers as places like Walmart or Fred Meyer. But, according to Dan Drinkward of Hoffman Construction, the city’s implementation of the measure “has gone beyond the clear intent of the measure as it was communicated to voters.”

Because of the measure’s broad language, many construction companies are defined as retailers and will have to pay the tax. Their clients will ultimately bear the cost increases—clients like Portland Public Schools, low-income housing developers, and the City of Portland itself.

Portland’s schools will especially suffer. The district’s projects have already increased in price because of the tax, with the Lincoln High School rebuild now costing an extra $2 million.

While certain foods, medicines, and health care services are exempt, other necessities like clothing and toiletries are subject to the tax, making Portland’s cost of living even higher, especially for low-income residents.

It would only take three commissioners from the Portland City Council to revise or repeal this poorly-thought-out tax. For the sake of the city, Portland’s voters must call on them to do so.

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

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SW Corridor Project: A Net Negative for the Environment

By John A. Charles, Jr.

Portland politicians claim to be concerned about carbon dioxide emissions and climate change. That’s why so many of them support TriMet’s proposed 12-mile light rail line from Portland to Bridgeport Village near Tigard. They think it will reduce fossil fuel use.

Their assumptions are wrong.

According to the Environmental Impact Statement (EIS) for the project, energy used during construction of the rail project will equal 5.9 trillion Btu. Much of this will be in the form of fossil fuels needed to power the heavy equipment. Additional energy will be used to manufacture the rail cars, tracks, and overhead wires.

The EIS claims that the negative environmental consequences of construction will be made up by energy saved from operations of the train. However, the operational savings are so small it would take 61 years to mitigate the carbon dioxide emissions of construction.

2035 Daily Vehicle Miles Traveled and Energy Consumption 

Vehicle Type Daily VMT – No build option Million Btu/Day – No build option Daily VMT

With Light Rail

Million Btu/Day

With Light Rail

Passenger vehicle 51,474,286 249,084 51,415,071 248,798
Heavy-duty trucks 3,389,982 73,132 3,389,288 73,117
Transit bus 100,122 3,546 97,501 3,453
Light rail 19,189 1,247 21,200 1,377
TOTAL 54,983,579 327,009 54,923,060 326,745

                                          Source: Draft EIS, SW Corridor Project

Unfortunately, all of the light rail cars will need to be replaced before then. Building new cars will require more energy, resulting in additional CO2 emissions and a longer payback period.

Light rail is not a solution to a perceived climate change problem; it IS a climate change problem. Any further planning for the SW Corridor project should be terminated.

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

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Our Most Pressing Environmental Crisis Is at Home

By Miranda Bonifield

Oregon’s most pressing environmental crisis isn’t in forests or renewable energy. Our human habitats have been endangered by our restrictive so-called “smart growth” policies. Even when we talk about allowing growth, policymakers tend to favor light rail over people’s real needs. Senate Bill 10, which would require cities like Portland to allow development of 75 housing units per acre in public transit corridors, misses the mark in two key areas.

First, the bill’s attempt to legislate the location of new development won’t improve transit ridership. Despite billions in new light rail lines and mixed-use developments, TriMet’s ridership has been declining since 2012.

Second, the bill removes parking minimums from these developments. This could lower the cost of development, but it could also worsen parking and traffic problems in a city that’s been trying and failing to cut down on automobile use for decades. It’s a mistake to allow denser development while assuming that the people who live here will depend on public transit rather than cars.

Taking the shackles off developers so that we can provide housing is a good idea, but lawmakers need to plan around people rather than trying to stack people into their plan. Transit-oriented development hasn’t worked in the last twenty years. It’s not going to start working today.

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

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Cap and Trade in Oregon: All Pain, No Gain

By Eric Fruits, Ph.D.

The Oregon legislature is expected to pass a carbon cap-and-trade bill this session.

While there is some agreement that climate change can have a negative impact on livability in the Pacific Northwest and throughout much of the world, there has been little attention paid to how little Oregon contributes to worldwide carbon emissions.

Oregon emitted about 65 million metric tons of carbon dioxide equivalents in 2017. By way of comparison, total global emissions were about 37 billion metric tons. That means that Oregon accounts for less than two-tenths of one percent of global emissions. About one six-hundredth. That’s tiny.

In other words, even if Oregon were to reduce carbon emissions to zero, the state would do virtually nothing to change worldwide carbon emissions, which means it would do virtually nothing to slow or stop global climate change.

At the same time, the cap-and-trade program would hit the pocketbooks of every Oregonian. An earlier version of the bill estimated the state would sell about $700 million a year of carbon permits, with the costs passed on the consumers and businesses.

Oregon’s cap-and-trade bill fails the basic cost-benefit test: The costs of cap-and-trade to everyday Oregonians would be exceptionally high while doing nothing to stop or slow climate change.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Proof by Assertion

By John A. Charles, Jr.

Many Portland drivers probably wonder why there are so many curb pop-outs on Portland streets. The pop-outs, also called bioswales, are usually shaped like rectangles or triangles and filled with plants, grass, and a drain pipe.

While advocates think the bioswales are important to protect water quality, a new report released by the Portland Auditor shows that there is little evidence to support such claims. The problem is the Portland Bureau of Environmental Services doesn’t have a monitoring plan.

In 2018 the Bureau spent $13 million in construction and maintenance costs for watershed protection, but no one was responsible for oversight. In fact, the Bureau did not even have an inventory to document where it spent money for restoration projects and the goals achieved.

This should not be a surprise. Both the Portland City Auditor and the Metro Auditor have issued multiple reports in recent years criticizing their own agencies for spending money without having systems in place to evaluate results. Those audits have generally been ignored by bureaucratic supervisors.

Unfortunately, Auditors can shine light on waste and mismanagement, but they cannot force changes. Only voters can do that by holding public officials accountable.

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

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Kate Brown’s Environmental Showmanship Has No Substance

By John A. Charles, Jr.

Governor Kate Brown has announced a legislative proposal that she claims is necessary to “resist” the Trump administration’s changes to federal environmental regulations.

While this bit of showmanship will play well to her base, it has no actual substance. The Oregon Environmental Quality Commission has long had the authority to adopt its own standards that are equivalent to or stronger than federal regulations, and it has done so many times.

In fact, it’s entirely plausible that if federal statutes such as the Clean Air Act and the Clean Water Act were completely repealed by Congress, there would be no measurable effect on Oregon. The state runs its own environmental programs and doesn’t need Congress or the Environmental Protection Agency.

Gov. Brown may find it convenient to manufacture an environmental crisis; but ambient loadings of air and water pollution have been falling for decades and will continue to do so, regardless of who is President. This is a great American success story, driven mostly by technological innovation and a commitment by corporate boards to continually reduce emissions.

We don’t have an environmental crisis, and we don’t need another law. Gov. Brown should stop using President Trump as a prop in her re-election campaign.

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

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Plastic Straw Ban Isn’t Environmentalism—It’s Virtue Signaling

By Miranda Bonifield

What’s the deal with plastic straws?

 Heartbreaking images of sea turtles afflicted by soda straws may be distressing, but well-researched environmentalists know that the best way to save the seas isn’t banning Seattle’s straws. Not only are such bans a disadvantage to the disabled people who rely on plastic straws in their daily lives, but they don’t really clean up the oceans. (For instance, Starbucks’ move to straw-free lids will actually use more plastic.)

It’s estimated that more than a quarter of the ocean’s plastic pollutants originate in just ten rivers in Asia and Africa with insufficient waste management practices. So banning straws and other plastics isn’t environmentalism, it’s virtue signaling.

Expanding the nanny state won’t save the sea turtles. To really take the trash out of the oceans, we should be focusing our energies on promoting effective waste management practices. Organizations like the Asian Development Bank and the Asia Foundation inform local governments and empower local communities to mitigate their waste management problems. Meanwhile, proper recycling, voluntarily avoiding disposable plastics, and community beach cleanups are all accessible solutions for everyday environmentalists.

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

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Climate Change Alarmists Can’t Get Their Story Straight

By John A. Charles, Jr.

Relying on computer models to predict the future has always been risky. Now we know it’s the basis of climate change securities fraud as well. 

The Competitive Enterprise Institute (CEI) recently wrote the Securities and Exchange Commission (SEC) that several California cities have claimed in lawsuits against oil and gas companies that those companies failed to disclose known climate risks associated with fossil fuel use. Yet those same cities have made bond offerings in which they tell potential investors that it is impossible to predict future risks of climate change. 

For example, San Francisco predicts in its lawsuit against the oil industry that it will be subjected to as much as 0.8 feet of additional sea level rise by 2030, with short-term costs of $500 million and long-term costs of $5 billion. Yet the City tells potential bond investors, “The City is unable to predict whether seal-level rise will occur.” 

The County of Santa Cruz claims in its fossil fuel lawsuit that there is “a 98% chance that the County experiences a devastating three-foot flood before the year 2050.” Meanwhile, in efforts to sell its own municipal bonds, the County reassures investors that it is unable to predict such floods. 

This confirms what has long been suspected: Climate change alarmists just make stuff up to scare the public.

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

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For Green Activists, the Cleanest Cars in History Are Bad News

By John A. Charles, Jr.

The Oregon Legislature convened again this week. A top priority for some officials is SB 1507,

which would create an energy rationing program that likely would increase the cost of gasoline to more than $7 dollars per gallon by 2035. This is being promoted as a means of reducing carbon dioxide, which some people think is a pollutant.

Coincidentally, the Environmental Protection Agency just released its latest update of automobile emissions trends for carbon dioxide. The report shows that CO2 emissions per mile for all motor vehicles sold in 2017 were the lowest since the agency began collecting data in 1975.

For truck SUVs, the reduction since 1975 was 50%. For minivans it was 51%. For standard passenger cars it was 55%. Almost miraculously, automakers have produced the cleanest cars in history while also making them much safer and more pleasant to drive than the 1975 models.

One would think that environmental advocates would be pleased with this success story, but good news is actually bad news for activists. They can only pass onerous legislation when everyone thinks we have a crisis.

We don’t have a crisis, and we don’t need this bill.

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

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Poll Shows Voters Are Smarter Than Politicians Think

By John A. Charles, Jr.

In November the regional government, Metro, released the results of a new public opinion poll of 800 registered voters living in the tri-county region.

One of the questions was, “In a few words of your own, what is the most important change that could be made to improve the quality of life in the Portland region?”

The top three responses were: dealing with the homeless/poverty (25%); affordable housing (17%); and traffic congestion (14%).

Environmental issues tied for last place (2%), and global warming did not even make the list.

This is roughly the opposite of what we frequently hear from many of the political talking heads. Listening to them, one would think that environmental Armageddon is upon us, especially because Donald Trump is President.

For instance, the top legislative priority for Senator Michael Dembrow (D-Portland), who chairs the Senate Environment Committee, is a bill he hopes to pass in early 2018 that would create a $700 million/year tax on carbon dioxide by establishing a convoluted industrial regulatory program. The ambient environment would not be improved one bit by this tax, but all of our basic necessities—food, clothing, shelter, and energy—would become more expensive.

Sen. Dembrow’s biggest supporter on this issue is Governor Kate Brown, who recently flew to Bonn, Germany to hobnob with celebrities at a United Nations conference on global warming. The two of them are convinced that if they can make energy more expensive, we’ll all use less of it and the world will be saved from “global warming.”

Most voters intuitively know that this is a scam. The term “global warming” doesn’t even have a useful definition. Voters know that the pain-versus-gain equation of global warming taxes is heavily one-sided: the “benefits” of reducing fossil fuel use are highly speculative (and may not exist at all); long-term (potentially thousands of years away); and global in nature. Yet the costs will be known, immediate, and local.

As the Metro poll shows, there is very little grassroots support for this kind of punishment.

It’s not surprising that homelessness, housing, and traffic congestion rank as the top three issues in the Metro poll because these are problems most of us confront daily. They are also things we can take action on.

Unfortunately, government itself has caused much of the mess, so voters will need to think carefully before signing on to more tax-and-spend programs. Almost every time regulators intervene in real estate markets, the result is some combination of less housing production and higher housing prices.

Take the most obvious intervention: urban growth boundaries. Since 1980, the population of the Portland metro region has increased by about 78%, but the available land supply for housing has only gone up by 10%. Making buildable land artificially scarce and thus more expensive is not a winning strategy if you’re trying to provide more housing.

But lack of land is just the start. After you add in ubiquitous farm and forestland zoning, extortionist system development charges, tree protection ordinances, inclusionary zoning requirements, prevailing wage rules on public housing projects, and numerous other interventions, the result is that we have a serious shortage of housing.

Even the government is trapped in government regulation. Last spring the Portland City Council approved spending $3.7 million to purchase a strip club on SE Powell Boulevard near Cleveland High School. The City plans to tear down the building and build 200 to 300 units of low-income public housing on the 50,000-square-foot property. City officials have admitted that it will take two years just to obtain the necessary permits for the redevelopment.

If it takes this long to get the permits for one of Mayor Ted Wheeler’s top priorities, imagine the delays facing a private sector developer.

The housing woes in such cities as Portland, San Francisco, New York, and Seattle are mostly self-inflicted. Housing supply is lagging demand because we’ve created so many barriers to housing construction. Removing those barriers should be a top priority for the state legislature when it convenes in February.

Global warming legislation does not even deserve a hearing.

John A. Charles, Jr. is President and CEO of the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was published by the Pamplin Media Group and appeared in The Portland Tribune.

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Kate Brown’s Attention Deficit Disorder

By John A. Charles, Jr.

The most serious problem facing Oregon right now is the exploding costs of the Public Employee Retirement System (PERS). The PERS crisis is so severe that the Oregon Legislature should make it the only issue addressed in the February 2018 legislative session.

But Governor Brown isn’t interested in reducing the PERS liability. That would take too much work and might offend her public employee union campaign contributors. So instead she has signed two Executive Orders purporting to address “climate change,” ahead of her jaunt to Bonn, Germany next week to attend a United Nations conference on global warming.

Her Executive Orders impose a blizzard of costly requirements on new buildings, including requirements for new homes to meet energy efficiency guidelines by 2023, and mandates for new homes to be solar-panel-ready by 2020. New buildings will also have to accommodate electric vehicles, regardless of whether the owners ever intend to own such vehicles.

The Governor is also setting a fantasy policy goal that Oregonians own 50,000 electric vehicles by 2020, more than three times the current ownership level.

Oregon desperately needs political leadership to avoid a PERS-induced death spiral. Unfortunately, all we’re getting is a Governor flying halfway around the world to escape reality.

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

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Timber Conservation and Oregon’s Constitution Shouldn’t Be at Odds

Timber Conservation and Oregon’s Constitution Shouldn’t Be at Odds

By Lydia White

Last week the Idaho Department of State Lands and the U.S. Forest Service signed ten agreements to allow logging and restoration on federal forest land, including land managed to benefit Idaho public schools by means of the Common School Fund.

Officials say allowing lumber companies to manage the land will create jobs while reducing the severity of wildfires raging in the western United States, costing over $2 billion this year alone. Jonathan Oppenheimer of the Idaho Conservation League says, “We’d like to see them recognize that you can still have a profitable timber sale while protecting some of those sensitive resources.”

Oregon faces similar wildfires, cost constraints, and environmental litigation, but hasn’t adopted Idaho’s successful approach, despite its Constitutional mandate to produce revenue for its own Common School Fund.

Earlier this year, the State Land Board halted the sale of the Elliott State Forest to a private company, an approach similar to Idaho’s, after backlash from environmental advocates. Instead, the Legislature passed a measure allowing Oregon to borrow $100 million in bonds to purchase the Elliott from a different state entity, all while costing Oregon’s Common School Fund billions in forgone returns.

Oregon, and other western states scourged by wildfires, should look to Idaho as it moves forward with its logging projects and adopt similar strategies proven to balance conservation and Constitutional requirements.

Cascade Policy Institute is set to publish a study of nine western states, including Idaho and Oregon, and their versions of the Common School Fund early next month.

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

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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.

 

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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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Oregon Politicians Support Better Roads, Just Not Here

By John A. Charles, Jr.

Recently the Oregon Legislature held a hearing on HB 3231, a bill promoted by Rep. Rich Vial (R-Scholls) that would authorize the formation of special districts for the purpose of constructing and operating limited-access highways.

Opponents made many of the same arguments they’ve been using for decades: new highways threaten farmland; increased driving will undermine Oregon’s “climate change” goals; and we can’t “build our way out of congestion.”

Perhaps the most comical opposition argument was made by Marion County, which sent all three of its Commissioners in a show of force. The Commission Chair concluded his remarks by saying, “We understand progress; we just want that progress to go somewhere else.”

Oregon stopped building new highways in 1983 after I-205 was completed. Elected officials came to believe that our needs for mobility could be met through increased urban densities, massive subsidies for public transit, and various forms of “demand management” to entice or even force people out of their cars.

The new approach didn’t work.

It turns out that manipulating urban form through land-use controls has very little influence on driving. Sure, you can regulate suburbia out of existence through density mandates, as Metro is doing. You can also reduce the parking supply and bring light rail right to someone’s front door.

But no matter how much some people fantasize about using alternatives to cars, it’s not very practical. Midday meetings, post-work errands, childcare obligations, and countless other demands lead people to rationally opt for driving for most trips.

That’s why, after a 20-year spending binge of $3.67 billion for new rail lines, TriMet’s share of daily commuting in Portland actually dropped from 12% in 1997 to 10% in 2016.

Auto-mobility is a wonderful thing, and there is no reason to feel guilty about new roads. For one thing, driving is strongly associated with economic growth. According to ODOT, for every job created in Oregon, we can expect an additional 15,500 miles of auto travel each year. If you’re in favor of new job creation, you have to accept increased driving as a logical consequence.

Moreover, the emissions associated with driving are now so minor that the real concern should be reducing air pollution from congestion. Vehicles sitting in gridlock have per-mile emissions of infinity; getting those vehicles into free-flowing conditions will improve local air quality.

Autos generally have the lowest emission rates when traveling at steady speeds of around 50 MPH. This is also a driving speed that makes most drivers happy, especially at rush hour. The way to accomplish both goals is through the construction of new highways when needed, coupled with the use of variable toll rates (also known as “dynamic pricing”). This could happen under HB 3231.

Across the country, dozens of impressive new highways are being built, many with private financing. Dynamic pricing is being be used to pay off bonds and eliminate congestion. This is the progress that most commuters dream about.

Unfortunately, it probably won’t happen here. Oregon politicians only support progress somewhere else.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article originally appeared in the Portland Tribune on April 25, 2017.

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Renewable Energy Certificates Don’t Turn on Your Lights

By Allison Coleman

Over the past two decades there has been a large push for environmental policy initiatives.

Unfortunately, some of these policies do nothing for the environment. The sale of so-called “green power” by electric utilities is one example. More than 60 Northwest utilities market green power products to consumers through monthly subscriptions, in which consumers think they are buying electricity from clean and renewable sources. Utilities promote these at different levels, ranging from platinum to silver, depending on the amount a customer spends.

However, customers are not actually buying renewable energy. Instead, they are buying “Renewable Energy Certificates” (RECs), which simply offer them the bragging rights associated with renewable power produced somewhere. The electricity may be sold to a homeowner in Montana, while the REC associated with that power is sold to a consumer in Oregon.

The REC itself is not a unit of electricity. In fact, it doesn’t even exist; it’s just an electronic number.

From 2011-2015, Multnomah County spent $230,000 on RECs. In 2016, the City of Beaverton spent $29,282. In 2015, Metro spent $104,539.

Every dime of that money was wasted. Taxpayers received no green power, or power of any kind.

Individual consumers are free to spend their own money on worthless junk. Elected officials spending tax dollars should be held to a higher standard.


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

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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.

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WES Is an Energy Hog

By Allison Coleman

In 2009 the regional transit agency, TriMet, opened a commuter rail line running from Wilsonville to Beaverton. The line is known as the Westside Express Service, or WES.

According to transit advocates, commuter rail would help reduce energy consumption in the Portland region because it was assumed that trains moved people more efficiently than private automobiles.

However, the energy efficiency claims about WES turned out to be wrong. WES uses 6,753 BTUs of energy per passenger mile, which is 4,000 more than the national average of all commuter rail lines. WES also uses more than twice the amount of energy as a car to move the same number of passengers. On average, automobiles consume only 3,122 BTUs per passenger mile, and that number has been dropping steadily since 1970.*

Many transit advocates have been so enthused about commuter rail that they have urged lawmakers to fund an expansion of WES to Salem. Not only would this be costly, it would be a step backwards for energy efficiency. Surprising as it may seem, the average automobile is now far more efficient than commuter rail.

*See http://cta.ornl.gov/data/tedb35/Edition35_Chapter02.pdf, page 2-20, table 2.15.


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

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Portland’s 100% Renewable Energy Claim Is “Greenwashing”

By Allison Coleman

In 2001, the Portland City Council declared that by 2010, all electricity used by city agencies would come from renewable energy. However, by 2010, only 9 percent of Portland’s power was renewable.

Undeterred, in 2012 Portland leaders again declared that city agencies would achieve 100 percent renewable energy. This time around, the city managed to get up to 14 percent.

Today, Portland has magically declared victory, claiming that municipal electricity use is 100% renewable. However, this is a blatant case of greenwashing. Portland is currently generating only 9 percent of its electricity from city-owned biogas and solar facilities. Another 15 percent is claimed from “green power” sold by Portland General Electric.

The remaining 76 percent of city use comes from a conventional mix of coal, gas, nuclear, and hydro. Portland then pretends to offset this by purchasing so-called “Renewable Energy Certificates” (RECs).

Unfortunately for consumers, an individual REC is not a unit of electricity; it is simply is a certificate claiming to represent the “environmental amenities” associated with one megawatt-hour of electricity generated by sources such as wind and solar. You cannot charge your phone or cook dinner with a pile of RECs because they don’t actually exist.

Last year, Portland spent $104,539 purchasing 74,671 RECs to create the image of 100 percent green power consumption. Every dollar spent buying those RECs was wasted money. Portland taxpayers should demand an end to this green power charade.


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

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Power Is the Narcotic of Choice for Politicians

By John A. Charles, Jr.

Oregon’s free-market research center, Cascade Policy Institute, celebrated its 25th anniversary with a gala dinner party on October 20 at the Tualatin County Club. Since its founding in 1991, Cascade has emerged as a leading voice for individual liberty and economic opportunity. Building coalitions with others, Cascade has helped develop innovative policies such as Oregon’s charter school law and the more recently enacted Right-to-Try statute.

Cascade helped Ethiopian immigrants break the Portland taxi cartel and secure a license to operate a new company. The Institute also helped a young Black woman start her hair-braiding business by persuading the legislature to repeal onerous licensing regulations.

And a paper first published by Cascade in 1996 suggesting that 84,000 acres of the Elliott State Forest be sold off helped persuade the State Land Board to do just that; a sale will be approved by the Board in December of this year.

However, such advancements will be tougher to come by in the years ahead, because the culture of Oregon has changed. The permanent political class that now rules the state has little respect for the entrepreneurial spirit.

The 2016 legislative session served as Exhibit A for this change. In the short space of 30 days, the majority party rammed through two major pieces of legislation: (1) a dramatic increase in the minimum wage; and (2) a mandate forcing electric utilities to provide 50% of their retail load from designated “renewable energy” sources.

Each bill only received a few hearings. Vast areas of complexity were brushed aside as unimportant. When hundreds of witnesses showed up pleading for a more incremental approach, they were dismissed. In 35 years of lobbying, I had never seen anything like it.

This was in contrast to Cascade’s early years, when the organization sponsored “Better Government Competitions” in 1994, 1996, 1998, and 2000. These events solicited good ideas from citizens about how to make government work better. Top officials including Governor John Kitzhaber and Portland Mayor Vera Katz enthusiastically endorsed Cascade’s “citizens’ suggestion box.”

Today, many elected officials openly disdain the public they serve. They don’t want your ideas, just your obedience and your tax dollars. Moreover, if you compromise and give them half of what they want today, they’ll be back for the rest tomorrow.

Nowhere was that more evident than with the so-called “coal to clean” bill in 2016. Why was this topic even being discussed when only nine years ago the legislature passed SB 838, which mandated that large electric utilities procure 25% of their power needs from specified “renewable energy” sources by 2025?

SB 838, passed in 2007, was seen as a visionary achievement. The leading legislative advocates, Senator Brad Avakian and Representative Jackie Dingfelder, were exultant. Oregon was now on a path to renewable energy Nirvana!

Yet by 2016, the “25 by 25” banner was seen as wimpy and out of date. Oregon’s perceived reputation as an international environmental leader had been undercut by legislation elsewhere. So the new (arbitrary) standard became “50% by 2040.”

We can do better than this. Perhaps if Measure 97 fails, legislators will stop looking for quick fixes and work together on tax reform. There are officials in both parties willing to tackle PERS reform and transportation finance, if the Majority party allows it.

Replacing hubris with humility would be a good first step.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. This article originally appeared in the October 2016 edition of the newsletter, “Oregon Transformation: Ideas for Growth and Change.”

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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.

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"Beyond Traffic" Has a Different Meaning in Portland

Portland is one of seven cities still in the running for a $50 million grant as part of the “Beyond Traffic” challenge sponsored by the federal Department of Transportation.

While the idea of solving traffic congestion sounds great, that is not an actual goal of Portland planners. In fact, local officials are trying to make traffic worse, by downsizing roads and lowering traffic speeds. As part of this campaign, a northbound travel lane on Naito Parkway was recently removed, and later this year two lanes on Foster Road will be eliminated.

Portland planners think we drive too much, so they want $50 million in federal funds to develop new data collection systems to encourage people to travel by bus, train, or bike. Since most people prefer a car, this will be a big waste of public money.

The transportation challenge for Portland is the need for an expanded highway system. Experimenting with technologies such as electronic tolling as a way of paying for that expansion might have been a useful grant application. But Portland planners don’t want to grow the system; they’d rather keep it small and congested, then use fancy technology to entice a few people onto a slow bus.

This is not a plan that will move us “beyond traffic.”

Updated as of 6/22: According to The Oregonian, the U.S. Department of Transportation has selected Columbus, Ohio as the winner of the federal “Smart City-Beyond Traffic” competition.

With this distraction out of the way, perhaps city planners can turn their attention to something more useful, such as finding ways to actually reduce traffic congestion in Portland.

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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.

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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.

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Oregon electricity ratepayers about to be ripped off with so-called “clean energy” bill

Oregon’s electricity ratepayers are supposed to be protected from monopolistic electric utilities by the Public Utility Commission. Yet, the most significant piece of energy legislation in decades was hatched in secret last year by those same utilities, without PUC input.

After the backroom deal became an actual legislative bill, the Oregon House of Representatives was happy to go along with the scam by approving HB 4036 in mid-February. None of the three PUC Commissioners testified on the bill.

The PUC did send a lone staff member to address the House Environment Committee, and he raised multiple concerns. He stated definitively that HB 4036 would increase costs to ratepayers and that the green power mandate would put utilities into “uncharted territory” that would risk the reliability of the regional power grid—due to the fact that wind and solar energy facilities fail to produce any output most of the time.

HB 4036 purports to be a big environmental win for the state due to a requirement that utilities cease using coal power by 2030. But Oregon only has one coal-fired power plant, at Boardman, and PGE already plans to shut it down by 2020. So this is a fake benefit. Score one for the utilities.

HB 4036 is also being marketed as a way to move Oregon to 50% reliance on “renewable power” by 2040, but that’s also a gimmick. According to the Oregon Department of Energy, the total of all electricity consumed by Oregon ratepayers from “renewable energy” sources is 6.2% of total consumption. Yet current law requires utilities to get 15%, so we already have a problem.

The gap between the reality of 6.2% and the fantasy of 15% is made up with so-called “Renewable Energy Certificates” (RECs), which don’t provide any actual electricity. RECs are just double-payments made to wind farms and other green energy producers so that the REC purchasers can pretend that they bought the actual electricity (they didn’t).

In financial terms, RECs are to power production what Bernie Madoff was to Wall Street. And just as the SEC put its stamp of approval on Madoff for years while he ran his Ponzi scheme, state and federal regulators have fully endorsed the use of RECs to allow utilities to pretend that they are using actual green electrons.

HB 4036 is specifically designed to make electricity more expensive and less reliable. That’s why there are sections in the bill allowing the PUC to temporarily stop compliance with the law under any of three conditions: if the reliability of the grid is threatened by the randomly-failing wind farms; if electricity rates rise too fast; or if the mandates for green power production (reaching 50% by 2040) can’t be met.

This is immoral. We should be enacting laws designed to make the grid more reliable and at less cost.

Proponents claim that we have to pass this bill; otherwise, even more onerous measures will be placed on the ballot in November.

So what’s the problem? Let the ballot measures go forward. I have full confidence that Oregon voters would never be dumb enough to vote to increase their rates by billions of dollars while receiving no environmental benefits.

When HB 4036 is scheduled for hearings in the Senate, legislators should insist that members of the Oregon PUC testify. The PUC is the official ratepayer watchdog; the muzzle needs to be taken off.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. This article originally appeared in The Oregonian on February 18, 2016.

 

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Electric Utilities Should Call the Bluff of Green Radicals

Two committees of the Oregon Legislature will hear presentations this week on a legislative proposal to eliminate the use of coal in Oregon’s electricity grid by 2035. Coal is the source of power for 33.4% of Oregon’s electricity consumption.

According to news reports, Portland General Electric and PacifiCorp have agreed to this proposal in order to head off a possible ballot measure that would impose even more onerous requirements if passed in November of this year.

The biggest problem with the proposal is that the two renewable technologies most preferred by radical environmental groups – solar and wind – are intermittent sources that randomly fail to provide any electricity to the grid. During the winter months when utilities must provide the highest levels of reliable power – the so-called “peak periods” – wind and solar combined supply only about 5% of the necessary electricity.

This means that ratepayers will be forced to spend billions subsidizing uneconomic renewable power facilities, and then pay a second time for gas-fired generators that will be necessary to back up the unreliable wind and solar plants.

Utility lobbyists should be ashamed of themselves for agreeing to this deal, and legislators should soundly reject it in the February legislative session. Instead, they should call the bluff of the radical greens and let them put their measures on the ballot. Few Oregonians would willingly support a “freeze in the dark” policy if given a chance to vote.

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

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Is It Possible to Power an Export Facility Entirely by Renewable Energy?

The Portland Sustainability Commission recently recommended that the City Council approve a $500 million propane export facility proposed by Pembina Pipeline Corporation. However, as part of its approval, the Commission is requiring that 100% of the electricity used at the export facility be generated by Oregon renewable energy sources.

This is an impossible standard to meet. We know it’s impossible because Portland has already tried it. In 2001, the City Council publicly committed that by 2010 all electricity consumed by city bureaus would come from renewable energy sources. Yet, despite great efforts, Portland never came close to meeting the goal by 2010.

Notwithstanding this failure, in 2009 the City pledged to meet the 100% goal by 2012, with a new aspiration of supplying 15% of the total electricity load from self-generated green power. By the end of 2012, the City had only reached 9% self-generation, and total green power reached just 14% of all consumption.

If Portland has consistently failed to meet the 100% goal over a 14-year period, it should not impose the same requirement on a private facility.

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Tide Goes Out on Ocean Energy

A new report released by Cascade Policy Institute concludes that the public-private partnership Oregon Wave Energy Trust has failed to achieve a return on public investment.

The Oregon Wave Energy Trust (OWET) is a nonprofit, public-private partnership established by the Oregon State Legislature that works to “responsibly develop ocean energy by connecting stakeholders, supporting research and development, and engaging in public outreach and policy work.” Since its inception in 2007, OWET has received nearly $12 million in public funding from the Oregon Innovation Council (Oregon InC), another government-sponsored entity. OregonInC claims its initiatives must earn a profit, but that is clearly not the case with OWET. None of the money spent to date by OWET has led to any profitability.

Cascade President and CEO John A. Charles, Jr. commented, “Electric utilities in Oregon, both public and private, are quite capable of generating and delivering power to their customers. If wave power is a good idea, utilities themselves will bring it to commercial scale. If it’s a bad idea, taxpayers should not be forced to bear all the risks of early-stage experiments.”

The Cascade paper, entitled Waiving Profitability, recommends that Oregon legislative leaders “should closely examine all state-sponsored venture capital funds to determine if grant recipients will ever become financially self-sufficient, as originally envisioned. OWET would be an excellent place to start.”

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Report Shows No Return on Public Investment for Oregon Wave Energy Trust

PORTLAND, Ore. – A new report released by Cascade Policy Institute concludes that the public-private partnership Oregon Wave Energy Trust has failed to achieve a return on public investment.

The Oregon Wave Energy Trust (OWET) is a nonprofit, public-private partnership established by the Oregon State Legislature that works to “responsibly develop ocean energy by connecting stakeholders, supporting research and development, and engaging in public outreach and policy work.” Since its inception in 2007, OWET has received nearly $12 million dollars in public funding from the Oregon Innovation Council (Oregon InC), another government-sponsored entity. OregonInC claims its initiatives must earn a profit, but that is clearly not the case with OWET. None of the money spent to date by OWET has led to any profitability.

Cascade President and CEO John A. Charles, Jr. commented, “Electric utilities in Oregon, both public and private, are quite capable of generating and delivering power to their customers. If wave power is a good idea, utilities themselves will bring it to commercial scale. If it’s a bad idea, taxpayers should not be forced to bear all the risks of early-stage experiments.”

The Cascade paper recommends that Oregon legislative leaders “should closely examine all state-sponsored venture capital funds to determine if grant recipients will ever become financially self-sufficient, as originally envisioned. OWET would be an excellent place to start.”

Cascade Policy Institute is Oregon’s free market public policy research organization. Cascade promotes public policy solutions that foster individual liberty, personal responsibility, and economic opportunity. The full report, entitled Waiving Profitability: The Oregon Wave Energy Trust’s Failure to Achieve a Return on Public Investment, may be viewed here.

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Kitzhaber’s “Clean Fuels Program” Is a Hidden Gas Tax

By Jon Egge

Many politicians on the West Coast have fallen in love with untested policies and programs they say will help solve global warming. Many of these policies are mind-bogglingly complicated. What, after all, is a low carbon fuel standard (LCFS), or clean fuels program? And how exactly do programs like “cap and trade” work? And, perhaps most importantly, how do these policies impact you, the consumer?

Here’s the dirty little secret the politicians don’t want to talk about: All of these policies are going to make it more costly to produce gasoline and diesel. In fact, that’s the intended purpose of so-called “market-based” schemes to reduce greenhouse gas emissions. By making the energy we need and use every day more costly to produce, other energy supplies—like wind, solar, biofuels, and hydrogen fuel cells—will become more competitive. And where these programs have been implemented—such as in California—they are also conveniently generating billions of dollars in new revenue for the state to spend however it pleases. That’s why climate-change policies like cap and trade and LCFS are becoming Trojan horses for hidden taxes. These revenue programs provide limited environmental benefits but generate big political paydays.

California has adopted the nation’s only LCFS, a program energy experts say is infeasible. Forcing manufacturers of gasoline and diesel fuels to meet a standard that can’t currently be met puts the state’s entire fuel supply in a very precarious position.

Now, politicians in Oregon are considering a LCFS that, if implemented, will become a new hidden gasoline tax designed to increase the cost of fuel and decrease the bank accounts of everyday motorists and businesses who rely on transportation. Hidden tax schemes increasing the costs of fuel are also regressive revenue-generating policies that hurt poor and middle-income families the most. These families spend a much larger portion of their income on transportation and fuel than wealthy families do, and hidden gas taxes therefore take a much bigger bite of their budgets. Unlike their wealthier counterparts, working families simply can’t trade their vehicles for expensive hybrids and electric cars. And because these policies aren’t transparent, consumers often have no idea why their fuel costs are rising.

We all want to improve our environment and ensure cleaner air. But punishing motorists by increasing fuel costs through hidden taxes is not the way to do it. Governor John Kitzhaber has made it clear he plans to move forward with a LCFS—even without the support of the state’s elected legislators. Last session, our Legislature, after careful consideration, declined to extend authorization for the LCFS. Under the governor’s unilateral direction, the Department of Environmental Quality is now adopting rules to push the LCFS forward.

The governor and agency bureaucrats need to be reminded, once again, that when gasoline and diesel costs go up, families and small businesses suffer. It’s time to put a stop to the hidden gas tax that is masquerading as climate change policy.

Jon Egge is a plumbing service contractor in Clackamas and serves on the Oregon Advisory Council of the National Federation of Independent Business. He is a board member of Cascade Policy Institute. This article originally appeared in The Oregonian.

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Report Questions Legality of Renewable Energy Certificates

PORTLAND, Ore. – Cascade Policy Institute issued a report today, questioning the legality of renewable energy certificates (RECs) and calling for the state Attorney General to investigate possible violations of the Oregon Unfair Trade Practices Act.

RECs are tradable commodities purporting to represent the “environmental amenities” of producing electricity from a select list of renewable energy sources. A REC is created electronically for each megawatt-hour of electricity produced by qualifying sources, and a unique number is assigned to the REC. It can then be bought or sold as a product that is either bundled with the actual electrical output of the facility, or sold separately.

However, nowhere in the transaction process are the so-called “environmental amenities” associated with each REC verified. The REC market is shrouded in secrecy; relevant data about individual RECs such as the power facility it is associated with cannot be obtained from utilities, REC brokers, or the Oregon Public Utility Commission. This is the major finding in the Cascade report entitled “Renewable Energy Certificates: A Costly Illusion.”This lack of transparency is a problem because not all “renewable power” sources are benign. Intermittent sources such as wind and solar require back-up power at all times to ensure reliability of the regional grid, and most of those sources create environmental problems such as air pollution or fish mortality. It is impossible for any consumer to know where their purchased RECs came from, and therefore impossible to know if there are any net environmental benefits.

“We believe that statements made by REC producers and brokers violate the Oregon Unfair Trade Practices Act by representing that the purchased RECs have benefits and qualities that they do not have,” Cascade’s President and CEO John A. Charles, Jr. stated in the letter to Attorney General Ellen Rosenblum.

There is no direct link in time or location between the payments a customer makes for “renewable” energy and the production of that electricity or its delivery to the customer paying for it. According to Charles, “The REC market is a Trojan Horse. Purchasers of RECs such as universities and businesses are buying these certificates to provide a ‘green glow’ for themselves, yet the alleged environmental benefits probably do not exist.”

In 2007, the Oregon legislature approved a law that would require at least 5 percent of power generated by electricity utility companies to come from “renewable resources,” like solar and wind power. This required percentage increases to 15 percent by 2015, 20 percent by 2020, and 25 percent by 2025. Instead of having to actually produce this electricity themselves, the law allows electricity companies to purchase or produce RECs.

The Cascade report recommends that the Oregon Legislature amend the 2007 statute to prohibit the use of RECs for compliance purposes if they are associated with intermittent power sources.

Click here to read the report.

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Beaverton’s Renewable Energy Purchase: Well Intentioned, Little Impact

By William Newell

The decisions we make are often greatly influenced by the information and advice we receive from other people. The same is true for elected officials, who generally seek the advice of experts in order to make important public policy decisions. Unfortunately, the system fails when decision makers receive information and advice that fail to tell the full story. By not taking into account all the necessary factors, policy makers can create unintended consequences that run counter to their intentions.

In 2007, the City of Beaverton began purchasing renewable energy “offsets” as a way to show the city’s commitment to sustainability and green energy. This year, Beaverton announced its success in purchasing renewable energy equivalents for all city operations. The city claims that its purchase offsets emissions from fossil fuel plants, thus providing a social and environmental benefit. Unfortunately, Beaverton’s well-intentioned policy has mixed results for the environment and the taxpayers.

The City of Beaverton purchases its renewable energy equivalents through Portland General Electric’s Green Power Program. The program charges a premium price for the purchase of renewable electricity. The cost on top of regular electric services goes to the purchase of renewable energy certificates, as well as program administration and marketing.

Purchasing RECs is intended to encourage the production of renewable energy, but RECs are too inexpensive to act as a real market incentive. The payments RECs generate aren’t required to be used for expanded production, either. Green energy producers themselves consider RECs to be little help in financing their green projects. RECs are largely a way for ratepayers to burnish their “green” credentials while paying power producers very little. Furthermore, little of the money spent on RECs actually gets to energy producers, due to green power marketers who act as middlemen in the REC marketplace.

If RECs represent the “positive environmental qualities” of renewable energy, they also represent the negative ones. Energy sources like wind and solar create negative externalities for ratepayers and the environment. Wind and solar are intermittent sources of power and must be backed up when the sun isn’t shining and the wind isn’t blowing. This means utilities must have non-intermittent energy sources such as hydropower or natural gas generators. Oregon’s hydropower system is already complex, and adding wind has made operating the system more difficult. Due to that fact, utilities must rely on other generation sources like natural gas peaking plants and possibly even coal plants for backup power.

When gas and coal plants are used as backup power, maintenance costs and generator inefficiency rise. This can be monetarily costly but also worse for the environment. If power plants designed to operate continually are used to make up for intermittent generators, their fuel consumption rises while overall electricity output stays the same or falls. Wind turbines, the main energy source supported by RECs, damage sensitive bird and bat populations with their large spinning blades.

In the end, Beaverton is faced with two facts. If RECs don’t encourage new renewable energy, the city has wasted taxpayer money and made false claims. If, on the other hand, RECs spur more renewable energy development, then more grid variability and environmental externalities will occur, mitigating the positive benefits of that energy. The City of Beaverton needs to faithfully represent its residents by eliminating the dubious purchase of RECs and return to straightforward policies that are transparent and effective.

William Newell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. He is a graduate of Willamette University.

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Green Data Center Bill Is Just More “Greenwashing”

By William Newell

In February, the Oregon Legislature passed House Bill 4126. This bill would allow utilities to purchase renewable energy certificates, or RECs, to meet Oregon’s renewable portfolio standards, rather than actually purchasing electricity produced by renewable sources.

The bill is simply “greenwashing.” “Greenwashing” is a tactic for companies, in this case large data centers, to burnish their environmental credentials without actually being any “greener.”

Many RECs are sold separately from renewable electricity and are meant to give energy producers extra income. While buying RECs allows purchasers to claim the use of renewable electricity, this notion is deeply flawed. The low price of the certificates (one to five dollars) prevents such commodities from realistically encouraging an increase in renewable energy production. RECs alone are not the reason renewable energy is generated or new plants are built. It is simply selling the right to claim that your electricity is renewable. Not only that, but RECs generally support solar and wind energy, which can negatively impact grid reliability, other generation sources, and the environment. Oregon-based Nike backed off from purchasing RECs because of their controversial nature.

The Legislature needs to alter course to avoid costing ratepayers boatloads of money with little actual return. It is time to stop the forced subsidization of energy sources that do more harm than good to our electric grid and our environment.

William Newell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. He is a graduate of Willamette University.

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Portland’s 100% Renewable Energy Goal Is Still Fantasy

By William Newell

The 2013 North American World Environment Day opened with a speech from Mayor Charlie Hales on the need for Portland to lead on renewable energy policy as it has on other environmental practices. As part of this renewed leadership effort, the Mayor reiterated a 2012 Portland City Council resolution which called on the City to use only renewable energy in its operations. However, this is not the first time the City has created a goal of 100 percent renewable electricity and sold it as an opportunity to lead―only to fail to get anywhere near the goal.

In reality, the Mayor was touting an objective which has existed since 2001. The goal originated as a part of the Local Action Plan on Global Warming, and it called on the City to “purchase 100 percent of City government electricity load from new renewable resources” by 2010. After the initial 2001 proposal, the City purchased three-year renewable energy credits (RECs) equivalent to about ten percent of the City’s electricity use.

Six years later in 2007, the City again tried to purchase more RECs; but the negotiations failed after the sales company decided to sell its RECs to Washington and California. The City spent more than $100,000 just to negotiate the deal.

2009 marked another important step for Portland’s green dreams with the announcement of the Climate Action Plan, which contained essentially the same goal as those proposed in 2001. This time the City would purchase or produce renewable energy with 15 percent of the energy coming from the City’s own generation by 2012. Yet again, by 2012 the City had failed to meet its goal, obtaining about 14 percent of its electricity from renewable sources and only nine percent from “self-production.” The other five percent came from state renewable portfolio standards, which mandate that utilities obtain five percent of their energy sales from renewable sources. This was a lucky development for the City, but ultimately it does little to help Portland accomplish its goal.

In 2012, the Portland City Council passed another resolution which prompted the City’s various bureaus to purchase enough RECs to “offset” 100 percent of the City’s electricity. This is the resolution on which the Mayor focused in his speech. But now, with no large-scale purchases or projects to meet the target, at the beginning of 2014 the City has yet to accomplish its goal. The City still only gets 14 percent of its electricity from renewable sources. This means the City is more than 85 percent behind meeting the objective. After more than a decade of goal setting and public speeches, the City has failed to achieve its goal. Can Portlanders really expect the City to change its behavior now, after 12 years of speeches and resolutions?

The reality is that Portlanders should not want the City to accomplish its long-overdue goal for a few key reasons. First, the proposed method of meeting the target has been through purchases of renewable energy credits, but this is a waste of city resources as RECs are no guarantee of reduced environmental impact. Second, the City has tried to produce its own energy through various means, but often through solar or wind installations―and these are wasteful and undermine grid stability.

To understand why REC purchases are wasteful, it is important to understand what they are. RECs are a commodity which represents the environmental benefits of one megawatt-hour of renewable electricity. One REC is “produced” when one megawatt-hour of electricity is generated from a source that is categorized as “renewable.” RECs are then sold, and purchasers can claim that they “used” renewable electricity.

But there are many problems with this narrative. When the City buys RECs, the purchase benefits government-favored wind operators while encouraging nothing. RECs do not require that proceeds go to expanding renewable generation capacity, and they are too inexpensive to be a sufficient incentive to expand renewable energy production. Interestingly, RECs are extremely cheap, which sounds good for the City budget, but it actually undermines their ability to spur further renewable energy development. Ultimately, RECs play second fiddle to more substantial renewable incentives like the Wind Production Tax Credit.

The main reason for the City to purchase RECs is that they are supposed to “offset” Portland’s carbon emissions from electricity use. But the credits don’t represent credible offset emissions because there is no requirement for RECs to show how much emissions were really avoided in their production. RECs cannot be tracked from creation to final purchase. Another problem with the “offset” theory is that RECs subsidize intermittent energy sources such as solar and wind. Intermittent energy sources must be backed up by other sources (possibly including fossil fuel plants), which either must be “ramped” up and down or “idled” to make up for cloudy or calm days. Relying on intermittent energy sources can actually result in more carbon emissions from existing fossil fuel plants and backup generators and a less reliable electricity grid.

The story of Portland’s 100 percent renewable energy goal is an unfortunate one. Portland hasn’t delivered on its promise, while touting failed solutions. RECs―the City’s preferred “green” solution―are not transparent, credible, or effective. Portlanders should really be thankful the City hasn’t met its own goal, which would have wasted taxpayer dollars on a questionable program.

William Newell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. He is a graduate of Willamette University.

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How the Environmental Left Became the New Climate Deniers

By Todd Myers

“The UN’s Intergovernmental Panel on Climate Change raises the level of alarm….Global warming deniers are now on a par with Holocaust deniers…” Ellen Goodman, The Boston Globe, 2007

When the United Nation’s Intergovernmental Panel on Climate Change (IPCC) released its report in 2007, the response of the environmental left was close to hysterical. The IPCC’s international mandate was so clear, the left called its findings the “climate consensus.” People who questioned the IPCC’s authority, some said, had the mentality of Holocaust deniers.

Recently, the IPCC released a new assessment, with improved calculations of global temperature increases and associated impacts. The new predictions are less dire and the IPCC’s old fans have become the new climate deniers, dismissing the new report as “political.”

Rather than follow the science, liberal politicians and environmental activists are denying today what they said was undeniable yesterday.

For example, writing in The Wall Street Journal just before the release of the new report, actress Darryl Hannah, who frequently protests with climate scientist James Hansen, says action is needed “urgently, if we are to avoid a 4-degree Celsius raise.” Her claim, however, was wrong before the new report was released and is more so now.

The latest projection of the IPCC for temperature increase under the most likely scenario is 1.8 degrees Celsius by the year 2100―less than half what Hannah claims. In fact, her claim is beyond the median projection for the most extreme scenario of 3.7 degrees C.

Claims about sea level are similarly inaccurate. The Sightline Institute claimed “the world’s leading climate scientists warn of the sea level rising by three feet by 2100.” On Twitter, Northwest NPR was even more extreme, asking how Seattle “would be affected if sea levels rise 1 foot by 2020.”

Under the most likely emissions scenario, sea levels will increase about 18 inches by 2100. The most extreme scenario projects an upper limit of sea level rise of 32 inches―less than the three feet claimed by Sightline. NPR’s 2020 estimate is wildly exaggerated, more than ten times the IPCC’s estimate.

Finally, Washington Governor Jay Inslee repeatedly mentions ocean acidification as a reason to take action on carbon emissions. Pointing to shellfish mortality in Washington’s waters, he claims, “We know that two of the most challenging threats we face to our environment are climate change and ocean acidification.” The pH of our waters, he notes, has recently acidified at the rate of about 0.1 per year.

Less than one percent of that trend, however, can be attributed to CO2 emissions. The IPCC reports, “The pH of ocean surface water has decreased by 0.1 since the beginning of the industrial era.” The acidification the Governor attributes to carbon emissions annually is actually the amount that occurred over more than 100 years.

Some realize their cataclysmic projections are no longer in line with consensus science. Instead of adjusting their claims, they turned to undermining the IPCC instead.

One New York Times columnist accused the IPCC of “bending over backward to be scientifically conservative,” claiming it was intentionally low-balling projections for political reasons.

Another left-wing environmental activist was even blunter, arguing “the IPCC report is more of a political document than a scientific one.” That is exactly the view of the best-known climate “denier,” Oklahoma Senator James Inhofe, who told an audience prior to the last IPCC report, “This is a political document, not a scientific report.”

The left has abandoned the IPCC, after years of touting the agency’s unshakable standard of excellence. What changed were not the IPCC’s standards but its conclusions. New science has sparked the left’s new denial.

Real solutions to any risks associated with carbon emissions will come only when policies are consistent with the latest science. The new, left-wing science deniers have made it clear they are more interested in trimming the science to suit their pre-determined politics. As a result, they don’t just deny the science, they deny the solutions for a cleaner Earth, too.

Todd Myers is director of the Center for the Environment at Washington Policy Center and a guest contributor at Cascade Policy Institute. He is the author of the book Eco-Fads: How the Rise of Trendy Environmentalism Is Harming the Environment and is designated a Wall Street Journal Expert panelist for energy and the environment.

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TriMet Violates Clean Air Act While “Regulators” Stay Silent

In previous decades the Portland region failed to meet national air quality standards for carbon monoxide pollution and was designated a “non-attainment” area under the federal Clean Air Act. As a result, the region was required to develop and implement strategies to reduce carbon monoxide.

One of the strategies is that TriMet must increase transit service by 1% annually for the period 2006-2017, on the premise that more transit service will reduce auto-related carbon monoxide emissions. TriMet’s compliance must be measured on the basis of a 5-year “rolling average” of actual hours of service. The “baseline year” for compliance is 2004 and includes the opening of the Yellow MAX line, which began operating that year. This strategy was specifically devised by TriMet to grandfather in the Yellow line, thus giving the agency the best chance for compliance.

However, even with this advantage, TriMet has not met the obligation to increase service. In fact, TriMet service has been steadily decreasing. This is a potential problem not only for TriMet, but for other local governments. If the Portland region were to be found out of compliance with the Clean Air Act, the federal government could delay or cancel federal dollars for such projects as Milwaukie light rail and the Columbia River Crossing. For regional politicians, this would be a disaster.

In January, the crisis was taken up by one of the obscure committees run by Metro―the Transportation Policy Advisory Committee (TPAC), comprised mostly of local government bureaucrats. TPAC agreed to recommend that compliance be measured on the basis of cumulative average of service hours for the 10-year period 2007-2017. The new “baseline year” would become 2008.

After TPAC, the plan had to be approved by the Oregon Environmental Quality Commission (EQC), the governing board for the state DEQ. The EQC took testimony in August and rubber-stamped the TPAC recommendation in early December.

Last week the issue moved to JPACT, another obscure Metro committee that approves all regional transportation spending. The free pass for TriMet was quickly approved.

The final stop will be the Metro Council, which will approve the change on December 19.

Sadly, none of the four entities approving the recommendation ever seriously considered enforcing the Clean Air Act. The top priority at every level has been to craft an escape hatch so that business as usual can continue. However, even a cursory look at the evidence would have shown that TriMet had no excuses for non-compliance.

For example, Metro/TriMet/DEQ have all claimed that the “abrupt drop” in TriMet service was “caused by the recent deep recession.” However, as shown in Table 1, the drop in TriMet fixed-route service has not been abrupt; both hours of service and miles of service were lower in 2012 than they were in 2004, so this has been a problem for years.

 

Table 1

Annual Fixed Route Service Trends for TriMet

2004-2012

 

FY 04

FY 06

FY 08

FY 10

FY 12

Change

Veh. revenue hours

1,698,492

1,653,180

1,712,724

1,682,180

1,561,242

-8.1%

Veh. revenue miles

27,548,927

26,830,124

26,448,873

25,781,480

23,625,960

-14.2

Moreover, the recession had little to do with the cuts because TriMet’s operating budget has grown by 62% since 2004 (Table 2).

Table 2

TriMet Financial Resources

2004-2013 (000s)

 

 

2004

2006

2008

2011

2012

2013

% change

 

 

 

 

 

 

 

 

Passenger fares

$ 59,487

$ 68,464

$ 80,818

$ 96,889

$ 102,240

$ 112,500

+89%

Payroll tax revenue

$ 168,378

$ 192,450

$ 215,133

$ 226,456

$ 248,384

$ 259,233

+54%

Total operations revenue

$ 315,130

$ 342,274

$ 404,481

$ 410,388

$ 488,360

$ 508,971

+62%

It’s interesting that the pollutant in question here―carbon monoxide―is a serious one that can permanently injure or kill people, and has been explicitly regulated under the Clean Air Act for over 40 years. Yet, local air quality regulators don’t care about TriMet’s non-compliance. Meanwhile, Metro is squandering a vast amount of public money on its co-called “Climate Smart Communities” plan, aimed at decreasing carbon dioxide―a harmless trace element that has never been explicitly regulated by the Clean Air Act.

In fact, the most notable consequence of increased CO2 levels in lab experiments is the faster growth of plants, which is generally thought to be a good thing. But CO2 has been demonized by environmental activists as a cause of “global warming,” so it must be regulated.

The new compliance plan for TriMet subtly changes the goal posts. By moving from a five-year rolling average to a 10-year average, and shifting the baseline year to 2008, TriMet picks a better year to begin measuring (service levels had already dropped by 2008), and gives itself more future years to “forecast” increased service, even if there is no reason to think such service will materialize. TriMet has publicly stated that the cost of employee fringe benefits must be reduced by 50% in order to restore lost service, and everyone who has watched public employee union negotiations knows that such concessions will never be made.

TriMet is a federal clean air scofflaw, but the local “regulators” are all in on the scam. For a region that prides itself as an environmental leader, this is a disgrace.

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

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Portland’s Renewable Energy Pipe Dream

By William Newell

Since 2001 the City of Portland has aimed to obtain all of its electricity from renewable sources. More than 10 years later, the City has failed to meet its own goals, even after renewing the pledge in 2009 and again in 2012.

To achieve its long-standing goal, the City has sought to purchase renewable energy certificates (RECs), which are said to “offset” emissions from electricity use. Unfortunately, RECs have major problems.

First, RECs are not required to show what emissions were avoided in their “production,” so there are few concrete savings for the City to claim. Second, intermittent energy sources require back-up power to maintain grid reliability. When wind dies down, as it often does, the system must make up the shortfall from natural gas and coal plants. Because some plants must “idle” while others “rev” their electricity production up and down, the plants utilize more fuel to produce less electricity. This ends up mitigating much of the claimed pollution savings.

Many Portlanders dream that the City can perfectly meld an urban forest with the concrete jungle, but behind Portland’s green curtain is an unaccountable government wasting taxpayer dollars on what amount to environmental “indulgences.”

William Newell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. He is a graduate of Willamette University.

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It’s Time for Renewable Energy to Stand on Its Own Legs

The Energy Trust of Oregon (ETO) is a non-profit organization that carries out energy efficiency activities on behalf of PGE, Pacific Power, NW Natural Gas, and Cascade Natural Gas. ETO also subsidizes the above-market cost of small, renewable energy projects. For 2014, ETO proposes to spend $178.9 million while taking in revenues of $163 million. Revenues are derived from monthly surcharges on the bills of utility ratepayers. The state legislature authorized the imposition of these surcharges (ranging from 3% to roughly 6%, depending on the utility and the year) in legislation adopted in 1999.

ETO’s budget is available for public review and comment (www.energytrust.org) through the end of November 27, 2013 and will be approved by the ETO board in December. Cascade President John A. Charles, Jr. filed the following comments with with Margie Harris, Executive Director of the Energy Trust of Oregon, on November 27:

Dear Margie,

I have listened to your budget presentation twice and also attended the most recent Renewable Energy Advisory Committee (REAC) meeting. Based on those observations I have one suggestion for the 2014 budget/action plan:

Consider shifting the emphasis for renewable energy subsidies away from intermittent sources. Since 2003, ETO has supported the development of 5,217 renewable energy projects of 20 MW or less. Almost all of these projects―99.6%―have been solar and wind, the two most expensive categories. Yet, because these technologies fail to produce any electricity most of the time, wind and solar projects have only accounted for 40.5% of the power generated by all ETO projects.

Not only has the ETO renewable program had high costs with low power output, most of the alleged social benefits of these sources don’t exist because the random failure of wind and solar means that the system operator for the regional grid has to maintain ever-growing amounts of spinning reserve. These back-up sources have adverse environmental effects that are not accounted for by the recipients of ETO subsidies. In essence, wind/solar project owners internalize the benefits of ETO subsidies while externalizing the costs of grid reliability.

In your 2014 draft budget, you propose to spend $9.9 million on solar projects to get 0.9 aMW of power, at a levelized cost of 10.4 cents/kwh. This is roughly triple the cost of your other renewable projects. I don’t think this is a good deal for ratepayers, and it’s not a good deal for the grid.

The “final frontier” for ETO should be to invest in renewable projects that produce reliable, dispatchable electricity. The regional grid craves stability; wind and solar create volatility. This is a fundamental system conflict, and ETO should strive to be part of the solution by terminating future subsidies for intermittent sources.

At the last REAC meeting, someone on your staff noted that solar projects are proceeding even without the Business Energy Tax Credit (BETC) [repealed by the Oregon legislature in 2012] due to declining solar costs of some 40% over the past 4 years. This should not be surprising if you understand the term “co-dependent.” In technological development as well as human interaction, when we stop rescuing people from their own failures, they tend to become self-reliant a lot faster. I’d suggest that after subsidizing 5,000 solar projects, it’s time for ETO to declare victory and move on, allowing this industry to stand on its own legs.

Sincerely,

John A. Charles, Jr.

Cascade Policy Institute

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

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The Portland Streetcar: Time to Reset the Vision

If some Portlanders are confused about why we have a 19th century trolley operating in a 21st century city, they are not alone. City leaders are confused as well.

According to the Streetcar Concept Plan adopted by the Portland City Council in 2009, there are three primary policy goals related to streetcar expansion: (1) help the city achieve its peak oil and sustainability strategies; (2) provide an organizing structure and catalyst for the city’s future growth along streetcar corridors; and (3) integrate streetcar corridors into the city’s existing neighborhoods.

Oddly, providing transit service is not an explicit priority, even though that’s the primary reason people ride. Instead we have a mishmash of peak oil mania―now a quaint artifact due to the shale oil and gas booms, coupled with advanced technology―and vague references to real estate development. Given that this plan was estimated to cost $750 million and the city is broke, perhaps we should rethink the objectives.

First, the fundamental purpose of any transit program is to move people. On this criterion, the trolley is a weak performer. It’s slow, it doesn’t go many places, and each car only has 30 seats. It has high costs and low capacity, when what we need is the exact opposite.

If a secondary purpose of the streetcar is to encourage development, there are much better ways to do so. Subsidizing the streetcar means that most property owners will never benefit, because the system is tiny―seven route-miles after two decades of planning. If the city were simply to streamline the permitting process and lower System Development Charges, we would incentivize far more development in all sectors of the city compared to laying another mile of track.

Advocates claim that streetcar lines are “permanent” and provide stability for nearby development, but thousands of miles of streetcar tracks in the United States were paved over when they became obsolete 80 years ago. More recently, the streetcar tracks in South Waterfront along Moody Avenue have been torn up three separate times since 2011 to accommodate light rail. Nothing is really permanent; and when change is needed, it’s a lot easier moving a bus line than it is ripping up streetcar tracks.

A Better Way

We should insist that the streetcar be treated as a transit expenditure and evaluated on those terms. If we do this, it’s clear that rubber-tired vehicles traveling on the existing road network make much more sense.

Of the bus options I’ve examined, the best one is the Metro Rapid in Los Angeles. This system relies on distinctive, low-floor CNG buses with red stripes providing fast, reliable transit service. It operates in general purpose traffic lanes and achieves relatively high speeds by having stops spaced 0.75 miles apart, on average.

Also, the Metro Rapid buses have the technical capacity to shorten a red light or extend a green light at intersections to improve travel time.

A summary of the key characteristics of this system compared with the Portland Streetcar is shown below:

LA Metro Rapid Bus

Portland Streetcar

Year opened

2000

2001

Annual boardings

72 million

4.1 million

System length

400 miles

7 miles

Capital cost/mile

$0.35 million

$29 million

Peak frequency of service

Every 3-10 minutes

Every 14-19 minutes

Average speed

14-30 MPH

7-12 MPH

The Portland Streetcar is 83 times more expensive to build than the Rapid Bus alternative. Is it 83 times better? No. In fact, it is not superior by a single metric. The Rapid Bus is cheaper, twice as fast, and has much greater coverage throughout the city. It’s an actual transit system, not a Disneyland ride.

We should stop further expansion of the streetcar and shift public resources to low-cost, higher-speed bus transit.

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

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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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Earth Day Exposes the Ironies of the Left’s Trendy Environmentalism

By Todd Myers
On April 22, in cities across America, some environmental activists will celebrate Earth Day, claiming only increased government control can protect the environment. Those celebrations will expose a couple ironies.

First, many activists will arrive in a Toyota Prius, which has become the symbol of environmental consciousness. Ironically, however, the Prius is not a triumph of political planning but of the free market. In the 1990s, while California was requiring “zero-emission” vehicles, leaders at Toyota and Honda saw an opportunity to sell cars to people who want to spend less on gasoline, drive a car that emits less carbon dioxide, or both. Thus was born the hybrid vehicle. Even though it did not meet California’s regulation, it sold well, causing Golden State politicians to change the law.

Jumping on the bandwagon, politicians began to give preferences to hybrids. Politicians did not lead, but followed the innovation of the free market. Most Prius drivers, however, don’t know that history; and some will spend Earth Day opposing the free-market policies that created the car they are so proud of.

Many activists on the left will also spend Earth Day complaining that people who see the benefits of the free market don’t care about the environment. A look at the national political map, however, tells a different story.

Across the country, the parts of the nation that most consistently support free-market candidates are those surrounded by stunning natural beauty. The most vocal environmental activists —who are quick to lecture others about caring for nature—tend to live in cities, where nature has been thoroughly controlled, constrained, and paved.

How, we should ask, can environmental activists get away with this? How can they continue to advocate top-down policies that don’t help the environment? How can those who live where nature has been subjugated lecture those who live in it and with it every day?

Environmentalism has become trendy and a way to show you are a good person, rather than actually helping the environment. Environmental activists and politicians choose government-mandated approaches not because they help the environment, but because the policies make them feel good about themselves and make them look good to others. The strategy is as simple as the fourth-grade playground: Build up your own environmental credentials by tearing others down and calling names.

Rather than pointing out these ironies, however, free-market conservatives often fall into the trap of arguing there are no risks to the environment, fitting perfectly into the stereotype imposed on them by the left. Some conservatives fear that by admitting they care about the environment, they must then endorse a range of leftwing policies they oppose.

In fact, a strong concern for the environment is part of believing in personal responsibility and the free market. Conservatives believe people have freedom, but must take responsibility for the impact they cause. If you commit a crime, you don’t get to blame society. A reason conservatives live near nature is that we love to hike, hunt, fish, and marvel at the awe-inspiring natural beauty with which our nation is so blessed.

Finally, the free market is the greatest system for allocating scarce resources and doing more with less, both of which are at the heart of a true environmental ethic. Rather than forcing behavior change, conservatives promote technological solutions that respect the freedom of individuals while reducing environmental impact. Rather than falling for the latest trendy environmental policy, conservatives demand that the government measure success or failure.

Better yet, we promote the creative competition that discovers options that we never imagined. As politicians spend billions on rail and buses that carry few people, the market is creating driverless, fuel-efficient cars that will more efficiently take people exactly where they want to go.

For energy efficiency, clean air, clean water, and smart resource use, the free market combines prosperity and innovation to successfully protect natural resources. April 22 may be a one-day event for some; but for those who embrace the free market and its push to do more with less, every day is Earth Day.

Todd Myers is director of the Center for the Environment at Washington Policy Center and a guest contributor at Cascade Policy Institute. He is the author of the book Eco-Fads: How the Rise of Trendy Environmentalism Is Harming the Environment and is designated a Wall Street Journal Expert panelist for energy and the environment.

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Wind Energy Can’t Stand Alone

A new Cascade Policy Institute–Reason Foundation study finds that wind energy is not suited to be the lone or primary source of a grid’s total electricity, due to its variable nature. If used to produce more than 10-20 percent of a system’s electricity, wind power increases operating costs because it requires expensive storage facilities or continuously available carbon dioxide-emitting backup power generation facilities.

 

In the Pacific Northwest, the backup to wind power has been provided by the Columbia River hydro system. However, hydroelectricity has even less carbon dioxide associated with it than does wind power. Displacing hydropower from the grid in favor of wind is actually a step backwards from the standpoint of reducing greenhouse gas emissions.

 

Two factors drive Oregon’s policy preference for wind power: subsidies to producers and Senate Bill 838’s Renewable Portfolio Standards. The Renewable Portfolio Standards force large utilities to procure 25% of their total power from politically designated “green power” sources by 2025. Both policies amount to a multi-billion-dollar tax on ratepayers, with net negative benefits for environmental quality.

 

As this study shows, policies favoring wind power are a mistake from both an environmental and an economic standpoint. Oregon legislators should repeal SB 838 and all wind power incentives in 2013.

 

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

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Wind Power Can’t Cost-Effectively Be a Large Grid’s Main Source of Electricity

PORTLAND, Oregon—Because of its variable nature, wind energy is not suited to be the lone or primary source of a grid’s total electricity, according to a new Cascade Policy Institute–Reason Foundation study. If used to produce more than 10-20 percent of a system’s electricity, wind power increases operating costs, due to the need for expensive storage facilities or continuously available CO2-emitting backup power generation facilities.

 

In the Pacific Northwest, the backup mostly has been provided by the Columbia River hydro system. However, since hydroelectricity has even less CO2 associated with it than wind power does, displacing hydropower from the electricity grid in favor of wind is actually a step backwards―if reducing greenhouse gas emissions is a policy objective, as it has been for Oregon legislators.

 

The new Cascade Policy Institute–Reason Foundation report uses a full year’s worth of hour-by-hour power grid data from PJM Interconnection, which manages the electrical grid in part of the Eastern United States, to simulate how wind would have supplied the necessary power to customers in 2009. The models show wind power would have failed to supply all the electricity PJM customers needed over 50 percent of the time.

 

Thus, if wind were to produce a large percentage of a grid’s electricity, it would be necessary to build expensive energy storage facilities, or to reserve power generation facilities to supply power, when there is insufficient wind to meet energy demands at any given time and to prevent brownouts and blackouts.

 

“Consumers will have to pay twice for power, since they will be supporting two duplicate generation systems,” said Cascade Policy Institute President and CEO John A. Charles, Jr.

 

The study shows that as more reserve power is needed, the environmental benefits of wind power decrease due to the C02 emissions from those facilities, which rely on fossil fuels and must operate even when not being used, in order to ensure reliability of the electrical grid.

 

In the future, the hydro system will be over-committed due to salmon mitigation requirements; thus, natural gas will have to be the backup for unreliable wind. Since gas-powered generators must be kept running 24 hours per day even if no electricity is required (the so-called “spinning reserve” mode), this practice will dramatically increase total energy consumption and greenhouse gas emissions for the region.

 

The study concludes that, given the costs involved, the practical upper limit for wind power’s contribution to the electricity grid is 10% of the total energy mix. This would result in a 9% reduction in CO2 emissions.

 

The current mania for wind power in Oregon is being driven by two factors: (1) subsidies to producers; and (2) SB 838 Renewable Portfolio Standards, forcing large utilities to procure 25% of their total power from politically designated “green power” sources by 2025. Both policies amount to a multi-billion tax on ratepayers, with net negative benefits for environmental quality.

 

“Very high wind penetrations are not achievable,” said William Korchinski, author of the Cascade Policy Institute–Reason Foundation study. “As wind’s share increases, system reliability will be adversely affected disproportionately—unless adequate reserve power is available. That power reserve is expensive and lowers any possible environmental benefits.”

 

“As this study shows, policies favoring wind power are a mistake,” Charles concluded. “Oregon policy makers should repeal SB 838 and all wind power incentives in 2013.”

 

Full Study Online

 

“The Limits of Wind Power” is available online here.

 

About Reason Foundation

 

Reason Foundation is a nonprofit think tank dedicated to advancing free minds and free markets. Reason Foundation produces respected public policy research on a variety of issues and publishes the critically acclaimed Reason magazine and its website www.reason.com. For more information, please visit www.reason.org.

 

About Cascade Policy Institute

 

Founded in 1991, Cascade Policy Institute is Oregon’s premier policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity.

To that end, the Institute publishes policy studies, provides public speakers, organizes community forums, and sponsors educational programs. For more information, visit www.cascadepolicy.org.

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The Unsustainability of Green Buildings

By Victoria Leca

Portland politicians and civic leaders have tried to “brand” the city as a world leader in “sustainable development” for the past decade. Now that Portland has so many buildings built to so-called “green standards,” it’s appropriate to take a look back at the track record.

One of the first eco-buildings built in Portland with help from the local government was Viridian Place in Lake Oswego. It is a three-story office building with 15,000 square feet, built by Blazer Development and CES Northwest. Construction on the building began in 1999, and the building opened two years later. The cost was $2 million or $130 per square foot. It has maximum exposure to sunlight, low-flow water fixtures to cut use by 20 percent, and efficiency measures to reduce energy consumption by 40 percent. It was the region’s first LEED project, and people all over the world came to look at it and tried to replicate the model. However, the problem with replication is that the project was not financially viable without government subsidies.

The developers went to the Oregon Office of Energy, which offers low-interest, fixed-rate, long-term loans for projects that save or produce energy. The low-cost energy loans serve as incentives to encourage businesses and governments to incorporate energy efficiencies into their projects and “get more for their money.” The money is geared towards only the energy saving parts of the project; but the loan committee can recommend financing for the entire project, if it qualifies as a demonstration project.

In the case of Viridian Place, the entire project qualified as a “demonstration” project since it was one of the first eco-buildings in Portland. In order for a project to be placed into this category, the project has to act as a model for subsequent projects, be visible to the general public, and be as energy efficient as possible. Viridian Place fell under all three categories. Thus, the Office of Energy Loan Program offered the developers of Viridian Place a $1.8 million loan for 15 years at a fixed rate of 7.11 percent. Commercial lenders at the time were charging nine percent interest rates for comparable loans.

“The Office of Energy loan made this facility possible,” said Tom Kelly in “Growing a Green Building,” a case study published by the Oregon Office of Energy. Kelly, a co-partner in the construction of Viridian Place, said he could not have started the project without the resources the Office of Energy provided. “They made it work. I wouldn’t have done it without them, because it would not have made economic sense,” he said. “We were on the edge of financial viability, and those programs helped make conservation make sense.”

One reason the building was financially infeasible was that the developers chose to install expensive solar panels that had a payback period of more than 40 years. From the developers’ perspective, it was worth the cost because they “wanted something to show our commitment. Without those solar panels there is nothing to say this is a sustainable building by looking at it.”

However, there is one way to offset the unwillingness of the customer to pay for a symbolic, but high-cost product: tax credits and low-interest loans from the government. At the time of Viridian Place’s construction, the Oregon Office of Energy offered Business Energy Tax Credits (BETC) to encourage investments in energy conservation, recycling, renewable energy resources, and less-polluting transportation fuels. Any Oregon business could qualify, and the tax credit was 35 percent of the project cost. Viridian Place received $21,136 in tax credits. The BETC program expired in July 2012, but provisions were added to a new Tax Credit Extension Bill which still allocate public money either to energy conservation projects or to renewable energy developments.

When developers apply for government help, they don’t think of how sustainable the project’s business model is or what their customers really want. When a project has such an unsustainable business model, it shouldn’t be touted as a ground-breaking, energy-saving project. In order for a project to be sustainable, it also must be financially sound.

Currently, another sustainable building faces the same financial dilemma. The now-stalled Oregon Sustainability Center needs to be massively subsidized with state funds and government tenants in order to be built. No private investor is willing to pay the high price of building an eco-building with a projected price tag of $62 million. The early lessons of Viridian Place seem to have been lost on Portland politicians.

Victoria Leca is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. She is a student at Portland State University.

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Banning Plastic Grocery Bags: Environmental Savior or Wasteful Eco-Fad?

By Todd Myers

From Bellingham, Seattle, and Issaquah, Washington to Portland, Oregon and parts of California (most recently, Pasadena, as of July 1), cities are joining the latest environmental trend―banning plastic grocery bags. Concerned about the amount of plastic that reaches our oceans and its impact on wildlife, communities have decided that banning the bags is a simple and environmentally responsible approach.

But is it? What does the science say?

Banning the bags actually may be a net negative for the environment, yielding little environmental benefit while increasing carbon emissions and other impacts.

Advocates of the ban cite the bags’ effect on marine life and mammals. Unfortunately, their claims are often false or misleading. For example, the Shoreline city council was told “the ecological impacts of this plastic include over a million sea-birds and 100,000 marine mammals killed by either plastic ingestions or entanglement.” In fact, this assertion has nothing to do with plastic bags.

NOAA corrected the claim, saying, “We are so far unable to find a scientific reference for this figure.” The only study NOAA can find does not deal with plastic bags or even marine debris, but “active fishing gear bycatch”―in other words, fishing nets that are used at sea, not discarded plastic bags.

A Greenpeace biologist quoted in the Times of London agreed, saying, “It’s very unlikely that many animals are killed by plastic bags. The evidence shows just the opposite. We are not going to solve the problem of waste by focusing on plastic bags.”

Others claim plastic bags have created a “Pacific Garbage Patch,” twice the size of Texas. This is simply false. Oregon State University reports that the actual amount is less than one percent the size of Texas. Oceanography professor Angel White sent out a release last year saying: “There is no doubt that the amount of plastic in the world’s oceans is troubling, but this kind of exaggeration undermines the credibility of scientists.”

In addition, the Wood’s Hole Oceanographic Institute found the amount of plastic in the Atlantic Ocean hasn’t increased since the 1980s.

This doesn’t mean plastic bags have no impact. When determining the environmental costs and benefits, however, we need to be honest about the science. Indeed, there are environmental risks from banning plastic grocery bags.

The most significant risk is the increase in energy use. Plastic bags are the most energy-efficient form of grocery bag. The U.K. Environment Agency compared energy use for plastic, paper, and reusable bags. It found the “global warming potential” of plastic grocery bags is one-fourth that of paper bags and 1/173rd that of a reusable cotton bag. In other words, consumers would have to use a cotton bag 173 times, or once a week for more than three years, before it matched the energy savings of plastic bags.

Ironically, many of the cities leading the charge against plastic bags are signatories to the U.S. Conference of Mayors Climate Protection Agreement. Yet, few of these cities even attempt to assess the climate impact of switching from the least energy-intensive grocery bag to those requiring far more energy to produce.

It also should be noted that the benefit of banning plastic bags is mitigated by the fact that half of the bags are reused for other purposes, like garbage or picking up after pets. Grocery shoppers will still have to buy other bags, likely plastic, for those purposes. Those who worry about trash reaching landfills are doing little by banning plastic bags.

In the end, communities need to sincerely weigh these various environmental costs. Unfortunately, few public officials do any analysis because the political symbolism of banning the bags is powerful. It is often easier to ignore the science that indicates such bans actually may harm the environment than to make an honest effort to weigh these difficult issues.

Put simply, plastic bag bans have become more about the latest environmental fad than about environmental benefits. State and local politicians should stop trying to enact into law whatever the latest politically correct ecological trend happens to be. Instead, they should leave customers free to make environmental and conservation judgments for themselves.

Todd Myers is the environmental director at Washington Policy Center. He has more than a decade of experience in environmental policy and is the author of the book Eco-Fads: How the Rise of Trendy Environmentalism Is Harming the Environment. He is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.

 

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Costs of Utility Mandate Ultimately Borne by Consumers

By Eric Revell

With the passage of Senate Bill 838 by the Oregon legislature in 2007, most electric utilities in Oregon are required to provide certain levels of electricity from so-called renewable resources. The mandate is 15% of electricity from renewable sources by 2015, rising to a target of 25% in 2025.

In the event that a utility is unable to meet the renewable energy mandate with their own resources, they can purchase renewable energy certificates (RECs). RECs are not an actual source of electricity; they are simply trade-able certificates representing the “environmental amenities” of power generated from politically correct sources, such as windmills and biomass facilities. They can be sold by the power generator to a retail utility company in need as a stand-alone certificate, or they can be bundled with the electricity actually produced. Unused RECs can be banked and sold to achieve compliance with green energy requirements at a later date.

While there is nothing wrong with consumers purchasing a fake commodity like a REC of their own volition, the state legislature should not make utilities purchase them simply to comply with expensive green power mandates. The additional costs incurred from REC purchases are passed on to all consumers through higher rates, an encumbrance that will increase as the renewable energy benchmarks continue to rise.

Eric Revell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Lower the Capital Gains Tax, Ignite Oregon’s Recovery

By Eric Revell

As the state of Oregon struggles to ignite an economic recovery, barriers to economic growth must be removed. Oregon’s overall tax burden is among the highest in the country, both in terms of the 9.9% personal income rate, but also more importantly when it comes to attracting investment, in capital gains, which are also taxed at a 9.9% rate. A commonly held misperception about the capital gains tax is that it only affects the rich. In truth, the chilling effect it has on investment has a much broader reach.

For businesses to make sound choices regarding new projects and hiring that lead to growth, they require a tax code that doesn’t discourage private individuals from risking their assets in the marketplace. When people view a given state as hostile to investment, they simply relocate to a friendlier environment, taking jobs and tax revenue with them.

Such an onerous business climate has become the norm in Oregon, which is vying with Massachusetts for the highest capital gains rate in America. Washington, our neighbor to the north, has no state tax on capital gains, so its investors are only subject to the federal capital gains tax―which is currently 15%―a far more palatable total tax burden than what Oregonians face.

For Oregon to spur the economic growth necessary to put its fiscal house in order, its lawmakers would do well to significantly reduce―if not eliminate―the capital gains tax in the Beaver State.

Eric Revell is a research associate at Cascade Policy Institute, Oregon’s free market public policy think tank.

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Rural Freedom Project- Juniper Entrepreneur

Gerard Joseph Lebreque talks with Cascade Policy Institute about his struggles with regulations on juniper and his life in rural Oregon.

His work can be found at: http://www.creationsbyjoseph.com/

 

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SunShot Makes Solar Energy a Long Shot

President Obama’s Fiscal Year 2013 budget includes $310 million for an ongoing energy research program called SunShot. The goal of the program is to use taxpayer subsidies to reduce the total installed cost of solar energy by 75% by the end of this decade, making it cost-competitive with other sources.

This is an admirable goal, but linking it to ongoing subsidies virtually guarantees that it won’t be met. There is no reason for private companies to develop inexpensive technology when politicians keep giving away money each year for research.

We’ve already seen this approach fail in Oregon. In 1999, the state legislature passed a law requiring that most consumers pay a three percent surcharge on their monthly electric bills to subsidize “market transformation” for renewable energy. Legislators and lobbyists agreed that the tax – which came to be known as the “Public Purpose Charge” – would go away after ten years, at which time green power was expected to be cost-competitive with coal and natural gas.

The ten-year anniversary of the Public Purpose tax will arrive on March 1, and solar energy is still wildly uncompetitive with other sources. And not surprisingly, politicians have reneged on the promise to end the tax; it was quietly extended five years ago to 2026 by the legislature, with no public discussion. This will cost consumers billions of dollars.

Politicians never seem to learn: Subsidizing failure simply begets more failure.

 

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Subsidized Car Sharing: The Next Frontier in Wasteful Spending

Nine months ago I happily testified (twice) on behalf of a legislative bill that would allow the creation of a privately operated car sharing program in Oregon. I liked the idea of using cars more efficiently, and I loved the fact that the price of rentals would be determined entirely by the market.

A model for this program exists in San Francisco; and as one of the legislative proponents described it, private vehicles there rent for about $9 per hour. But a Tesla electric vehicle frequently rents for $50 an hour, just because some people think it’s fun to drive.

I wouldn’t pay that much, but I’m glad the law allows someone else to.

Unfortunately, a good idea has been ruined by subsidies. Recently, the federal government awarded a $1.7 million grant (requiring $431,250 in local match money) to the City of Portland to promote car sharing and to measure the results. The regional government, Metro, will vote on Thursday to accept the grant.

Car sharing is a great idea, but tax sharing is not. Metro Councilors should reject the federal money and allow the “invisible hand” of the market to work exactly as the legislature intended.

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Turn out the Lights

Now that the Dear Leader of the Democratic People’s Republic of Korea (aka North Korea) has left this earth, it is up to the Great Successor (aka the Dear Leader’s youngest, inexperienced son) to carry on his legacy.

Rumor has it that the Great Successor’s first command was that all lights in the hermit kingdom be extinguished every evening at sunset for the indefinite future in honor of his dead father.

Don’t believe it? Check out the satellite photos that show South Korea ablaze with progress-shining lights while the North is almost totally dark. But, you say, these photos are years old? Yes, and that just confirms how brilliant the boy leader is. He commanded darkness in honor of his father years before this demigod was no more.

One theory is that the North is not really dark at night; it is just that they can only afford 25-watt bulbs, which are too dim to be seen from space. If this is true, the U.S. Congress might take note. Rather than argue over effectively banning incandescent light bulbs here, it might instead simply mandate no bulbs over 25 watts. Same result, and we get to look dark from space, too. How’s that for saving the planet while punishing the one percent who could afford those wasteful 100 watters? The Dear Leader would be proud of us.

In any case, everyone at Cascade Policy Institute wishes you a Happy, hopefully bright New Year.

Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization. He is also, occasionally, its Satirist-in-residence.

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Oregon Innovates During “The Year of School Choice”

The Wall Street Journal recently called 2011 “The Year of School Choice.” According to the July editorial:

“No fewer than 13 states have enacted school choice legislation in 2011, and 28 states have legislation pending….Louisiana enhanced its state income tax break for private school tuition; Ohio tripled the number of students eligible for school vouchers; and North Carolina passed a law letting parents of students with special needs claim a tax credit for expenses related to private school tuition and other educational services.”

It should be added that here in Oregon, our legislature passed a bill to allow open enrollment among public school districts. Starting in 2012, parents may enroll their children in another district as long as the receiving district is accepting transfers. This arrangement can promote increased enrollment in schools with empty seats while offering additional opportunities to out-of-district children.

A second bill eased enrollment restrictions for online schools. A third allows public universities and colleges to sponsor charter schools. All three bills have been signed into law by Governor John Kitzhaber.

It’s becoming increasingly evident that allowing families more freedom in educating their kids is the way of the future. In a pioneer state, Oregonians should be proud of the ways we are innovating to give students more diverse choices in education.

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Basic American Rights Series – Property Rights

Americans for Prosperity and the I Spy on Salem Radio Show will be co-hosting the first Basic American Rights Series on Thursday, Sept. 22, from 5:30 to 9:00pm at the Portland Airport Shilo Inn. It will also be broadcast live around the state to: Shilo Inns in Seaside, Springfield, and Klamath Falls; the China Gorge Restaurant in Hood River; and the Salem Public Library.

This first in the series will focus on property rights, which are fundamental to the American Dream, and will draw attention to how our property rights are being eroded—by legislation, regulation, and even through the more extreme elements of environmentalism.

The town-hall style event will feature three very informative property rights experts, who will each address a different problem area and what can be done to prevent the loss of one of our most essential American rights. There will also be Q&A afterward.

Tom DeWeese, a national speaker on property rights and the UN’s Agenda 21, will discuss private property rights, local implementation of Agenda 21, and how cloaking restrictions in “sustainability” impacts our rights.

Karen Budd-Falen, a land-rights attorney from Wyoming, will discuss how the Endangered Species Act has been misused and methods environmental extremists use to fund themselves at taxpayer expense—such as Debt-for-Nature swaps. Finally, Jim Huffman will bring the evening around to Oregon and will speak about our private property rights, why they’re so important, and why our Founding Fathers fought for them.

The cost is $10 to cover expenses. Due to limited seating, guests are encouraged to pre-register by going to americansforprosperity.org/Oregon or ispyonsalem.com. There will be a social hour/mixer from 5:30 to 6:30 and the main event will begin at 6:30. For more information, contact karla@ispyonsalem.com.

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Power to the People!

By Nick Sibilla

The Oregon Department of Energy (DOE) has unveiled a bold new plan to create green jobs: investing in human energy. With retrofitted bikes and elliptical machines, people can turn their workouts into renewable energy. Thirty minutes of exercise generate 50 watt hours of human energy, enough to charge a laptop for one whole hour.

Among other sources of green power, Oregon is also a pioneer in human energy. The University of Oregon has spent $22,000 on 20 human energy machines, while in March 2009, Oregon State University had the largest human power plant in the world. Those are some sweaty Beavers.

Inspired by these universities, the DOE will pay all 185,000 unemployed Oregonians to generate human energy. If each jobless Oregonian exercised eight hours a day, five days a week, we could produce 18.5MW[i] of clean power each year. That’s enough electricity to power 2,700 homes! All this is possible, for only $3.3 billion.[ii] Now that’s a bargain.

Since anyone with legs can bike or run, these are the ultimate “green collar” jobs. No skills required. Plus, by investing in human energy, even more jobs will be created: Machines break down—mechanic jobs. Athletes need food and water—concession jobs. Bikers need music to listen to—Steve Jobs!

As you can imagine, all this exercise will be great for our health. In fact, we could eliminate childhood obesity altogether by mandating that kids provide human energy. After all, our children are getting fat and corrupted by violent video games. Our children need to learn a sense of civic duty. What better way to teach them how the government works than by forcing them to do something that goes absolutely nowhere?

More jobs, more clean energy and lower health care costs—it’s a triple win!

Now, I know some free trade capitalists will hate this, but we need to make sure that only Oregonians can have these jobs. We can’t let the unwashed masses from Idaho or Seattle steal our human energy. We need to seal off the border. That’s the only way we can keep our energy local. Plus, think of all the jobs that would be created: construction workers, guards, moat diggers, you name it. Soon, we would have too many jobs—can you say negative unemployment?

But fiscally conservative nattering nabobs of negativity will say it’s insane to pay people to ride bikes to power Oregon. They say clean energy subsidies are completely unnecessary. After a Portland streetcar that costs $50 million per mile and a billion-dollar wind farm, they would have you believe Oregon can’t afford any more gimmicks.

But the DOE’s plan has two sources of funding. The first would be to raise taxes on the rich. Recently, Robert Reich proposed a 70% marginal tax rate. But that’s too low. Instead, that rate should be 100% of revenue. Why? 100% is bigger than 70%. Obviously. Better yet, make the rich give 110%. They can afford it. (And what’s this business calling taxes “marginal?” Too many hard-working, middle-class Americans have to pay taxes. Taxes aren’t marginal: They’re mainstream.)

Second, this plan would sell “human energy certificates” (HEX). Buying HEX would allow people to finance human energy without actually exercising. People who buy HEX receive the benefits of human energy, like sweat, a sexier body and an unflappable sense of moral superiority, all at low, low prices!

We must invest in human energy to save our economy and our planet. After all, people are the ultimate renewable resource.


Nick Sibilla is a research associate at Cascade Policy Institute, Oregon’s premier free market think tank. When he’s not being über-manly, he dabbles in political satire.

[i]100 watt hours per hour X 40 hour workweek = 4,000 watt hours (4 kWh per week)

4,000 X 50 weeks = 200,0000 watt hours per year (200 kWh per year, per person)

200 kWh X 185,000 unemployed Oregonians in May 2011 = 37,000,000 kWh (37,000 MWh)

37,000MWh = convert to MW (divide by the number of hours biked each year [2,000h (40h X 50 weeks)]

37,000MWh/2,000h = 18.5 MW QED!

[ii]$8.50 X 2,000 man-hours per year = $17,000 annual wage X 185,000 unemployed= $3.145 billion

$1100 per machine X 185,000 unemployed = $203.5 million

Total cost = around $3.35 billion

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Germany’s Energy Mistake of Nuclear Proportions

By Gordon J. Fulks, Ph.D.

“Quem deus vult perdere, dementat prius ― Whom the gods would destroy, they first make insane.”

Germany’s precipitous decision to shut down eight nuclear power plants last March and the remainder by 2022 is curious coming from a German chancellor with a doctorate in physics. Under pressure from Greens who exploit scientific illiteracy and promote fears they find useful, Chancellor Angela Merkel has become a pure politician. Nuclear power evokes many fears in Germany. As in the English-speaking world, irrational perceptions about technical matters from nuclear energy to alternate energy to global warming transcend all reason.

The German political situation started to melt down after the most powerful earthquake and tsunami in modern times struck Japan in March: More than 24,000 people lost their lives, and the Japanese nuclear power installation at Fukushima made ominous headlines for weeks. With reports of radiation leaking from three reactors and large evacuations of the local population, European Energy Commissioner Gunther Oettinger of Germany declared the nuclear incident to be an “apocalypse.” Three reactors out of 11 in the Fukushima area were destroyed, resulting in large economic losses and a long, complex cleanup. But the widespread devastation elsewhere was the real tragedy.

Of the huge death toll, not a single death was attributed to nuclear radiation. Two workers at Fukushima died from drowning and one from a heart attack. Although two other workers received non-life-threatening radiation burns from standing in highly radioactive water, no one died from radiation sickness. The large amount of dangerous iodine-131 initially released has largely decayed away.

Long-term effects attributable to radiation exposure should be minimal, even among those workers who received the largest doses as long as established procedures to limit total exposure were followed. In the far worse Soviet Chernobyl accident in 1986, where the reactor burned and workers were unprotected, 57 died from direct effects and 500 in the local population from telltale thyroid cancer. But the vast majority of the population escaped unharmed.

The rational response to major industrial accidents is to carefully understand what went wrong and make improvements to existing procedures and infrastructure to minimize the chance of a recurrence. Because Germany uses far better reactor designs than the Soviets had and experiences few giant earthquakes and tsunamis like those in Japan, these disasters are not particularly pertinent to them. Moving toward more wind and solar power was the politically expedient decision for Merkel, but it has huge practical and environmental drawbacks. Because windmills and solar arrays produce very erratic electricity, backup from new turbine power plants burning natural gas is necessary. Leaving conventional steam plants running as “spinning reserve” is hugely wasteful.

That raises the inconvenient question: Why not just build advanced and highly efficient gas turbines and forget about expensive alternate energy? Wind and solar installations typically fail in 20 years, just as they have paid back the energy and cost of their construction. In other words, they produce little net energy, making them very inefficient. Their erratic nature also means that they reduce the reliability of the grid.

Germans are likely to get the additional natural gas they will need from their present supplier, Russia. Why? Because Germany also has a phobia about the shale-gas revolution that is sweeping the rest of the world. Germany has meager gas reserves, but friendly neighbors like France and Poland now have huge reserves.

If Germans want to avoid shipping the remainder of their industry to China and shivering in the dark when the sun is not shining and the wind is not blowing, they will have to choose between viable sources of electricity: nuclear, natural gas and coal. The smart move for Merkel would be to get full value out of Germany’s existing nuclear power plants during their design life and then consider environmentally friendly gas turbine replacements.

Although nuclear power has many advantages and new reactor designs coming from places like Oregon State University show great promise, natural gas appears to be the most competitive solution for advanced industrialized societies needing clean, reliable power in coming decades. Is Germany still capable of making rational decisions? Very recent news suggests that they may restart one nuclear reactor to avoid power shortages this winter. They are also talking about using millions of euros from a fund for promoting alternate energy to encourage new coal and natural gas power plants. These are steps back from the abyss.


Gordon J. Fulks holds a doctorate in physics from the University of Chicago, Laboratory for Astrophysics and Space Research. He is an Academic Advisor at Cascade Policy Institute in Portland and lives in Corbett.

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John Charles responds to attacks made by Metro Councilor Rex Burkholder and Metro Councilor Carlotta Collette

At the July 14, 2011 JPACT meeting, accusations were made about John Charles and the Cascade Policy Institute. The response from John is below.


Metro Councilor Rex Burkholder
Metro Councilor Carlotta Collette

600 NE Grand Avenue
Portland, OR 97232

 

Dear Councilors Burkholder and Collette,

I am responding to the personal attacks that the two of you made at the July 14, 2011 JPACT meeting. Although there were many inappropriate comments made by numerous committee members, in the interest of brevity I will focus my concerns on just a subset of remarks made by the two of you.

 

Councilor Burkholder, you started it with your uninformed opinion about the so-called Drive Less/Save More (DL/SM) campaign, a topic that was not even on the formal agenda. After Randy Tucker’s legislative report, you stated:

 

“My understanding is that it was brought up by John Charles of Cascade Policy Institute.  And the stories I’ve heard is that they’ve received a significant boost in funding from the Koch brothers, a wealthy set of people who are funding climate denial kind of actions and anti-transit and anti-urban redevelopment issues, and so they have significant numbers of staff people who are out there fanning the flames and providing misinformation…”

 

In that entire paragraph there is only one factually correct statement: the issue was brought up by me. However, you seem to have no knowledge of the context, or what I actually said.

 

I brought up the DL/SM program in a legislative Ways and Means Subcommittee hearing on the ODOT budget. Although most of ODOT’s budget is characterized by restricted funds, I pointed out two discretionary programs: the 6-year-old DL/SM program, and the 17-year-old Transportation-Growth Management Grant Program. I suggested that regardless of how much merit they might have once had, in the case of DL/SM, “probably everything that can be said about driving less and saving more has already been said.”

 

I encouraged the subcommittee to euthanize both programs and re-allocate the roughly $8.5 million to other more productive endeavors, such as actually improving our road system.

 

My testimony ignited an avalanche of criticism of the DL/SM program from both sides of the aisle. Almost every legislator on the committee joined in, expressing outrage that we were spending valuable tax dollars on silly marketing campaigns. Eventually the issue became the topic of a front-page story by the Oregonian about the role of former State Senator Paul Phillips in fighting for the program, because so much of the money is funneled to his lobbying firm.  As Mr. Tucker informed you, the program eventually took a cut of roughly $500,000, which is minor by legislative standards.

 

From this brief legislative exchange, Councilor Burkholder now concludes that Cascade Policy Institute is receiving significant funding from the Koch brothers, which is threatening Metro’s transportation vision. There is no truth to this claim. We do not receive one penny from the Koch brothers, nor have we ever in the seven years that I have been CEO.

 

Our only link to the philanthropy of these gentlemen is that we have two college interns this summer who are “Koch Fellows”, courtesy of the Institute for Humane Studies (IHS) in Washington, D.C.  The two of them are paid directly by IHS for an eight-week internship at Cascade, where they research and write on various topics, and in return, we provide them with training and experience. One of them has recently published a paper on Medicaid; the other is researching Renewable Energy Credits.

 

Your statement that I am personally “fanning the flames and providing misinformation” is a serious charge. To remind you, I have worked on transportation policy for over 20 years. I’ve served on numerous public advisory committees, have published hundreds of essays, and testified in front of dozens of governing boards. Please provide me, in specific detail, examples of where I have knowingly given “misinformation” to anyone. If you can’t do that within 10 business days, I’ll be expecting a public apology.

 

And if you are unwilling to provide an apology, then we will soon be having a legal conversation about the meaning of the term “defamation.”

 

Councilor Collette:  after Councilor Burkholder got done with his attack, you piled on by saying, “for those who don’t know the Koch family is a major oil industry family, so we know where at least that portion of the opposition is coming from – a real pro-automobile, oil-industry group.”

 

You perpetuated the falsehood that Cascade receives major funding from an outside source tied to the fossil-fuel industry, which in your mind explains everything about CPI testimony – my testimony – that you disagree with. I will be expecting a public apology from you as well.

 

I suggest that both of you carefully listen to the entire audio recording of the JPACT meeting. After your early comments, the meeting quickly turned into a marathon whining session about mean Republicans in Congress, climate “deniers”, and all the other alleged enemies of the vaunted Metro 2040 plan. You set the tone for, and encouraged, this unprofessional behavior.

 

I will note in closing that we received a letter dated June 14 from Metro Council President Tom Hughes extolling the virtues of bringing a “diversity of voices and experience to Metro.” He then goes on to invite us to participate in the Opt In campaign.

 

It is certainly true that Metro suffers from a lack of diversity, but that problem will not be solved by internet polling or offering small bribes to groups to receive “free surveys” of their memberships. The problem will only be solved when the Metro Council recognizes how severe the group-think mentality has become, and includes contrarian voices in meaningful conversations at the decision-making level.

 

I look forward to receiving your respective apologies, and to your joint commitment to raising the quality of public discourse at Metro by showing respect to the people with whom you disagree.

 

Sincerely,

 

John A. Charles, Jr.

President & CEO

 

 

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Renewable Energy Credits: The Ultimate Greenwash

By Nick Sibilla

News Corporation claims it’s greener than Starbucks.

That’s one of many surprising insights gleaned from the first-ever global Corporate Renewable Energy Index (CREX). According to CREX, published by Bloomberg New Energy Finance and Vestas Wind Systems, News Corporation (the parent company of FOX News and The Wall Street Journal) procures 67% of its electricity from renewable energy (RE). That makes News Corp. the 8th highest corporate consumer of renewable energy. Meanwhile, Starbucks ranks below at 14th, with 58% of its energy purchased from green sources. Despite the current recession, among those surveyed, corporate purchases of RE increased by more than 50% over the past year.

Yet many of the corporations on CREX did not actually buy renewable energy. Instead, they purchased a fabricated commodity, known as renewable energy credits (RECs), or “green tags.” A REC represents the alleged “environmental amenities” associated with certain forms of electrical power production such as wind or solar. For those in the trade, one REC is created every time one megawatt-hour (MWh) of renewable energy is generated. (For comparison, the average American household uses just under one MWh every month.)

In other words, two distinct commodities are associated with renewable energy: the electric output itself and the intangible environmental benefits. RECs represent the latter and are sold separately from the power generated by a “green” facility. But by purchasing RECs, corporations can still claim they are using green power. In fact, according to CREX, RECs accounted for over 70% of all corporate green power purchases in 2010.

However, buying RECs is troubling for two reasons. First, the price of RECs is far too low to induce investment in clean energy. As CREX notes, the average price is a little under $1 per REC. But according to exposés published by Bloomberg News and BusinessWeek, the actual cost of generating one new MWh of green power can range anywhere from $40 to over $90 per MWh. In fact, in a study published by the National Renewable Energy Laboratory, the cost of solar power can reach as high as $680 per MWh.

Second, RECs are often a marketing gimmick for corporations to prove they care about the environment. For example, back in 2008, Nike was the 24th-largest corporate buyer of RECs. But that same year, it emitted 1.6 million tons of carbon, one of its highest years in the past decade. One year later, Nike slashed its RECs purchases by almost 70%. Now Newsweek ranks Nike as the 10th Greenest Company in America, as determined by over 700 different metrics. Yet Nike is conspicuously absent on CREX. Meanwhile, News Corp. plummets from #8 on CREX to 107th on Newsweek’s list. Clearly, going green takes much more effort than buying RECs.

Furthermore, for those concerned about global warming, RECs do not reduce total carbon emissions. According to the EPA:

If you are buying renewable electricity or RECs, you are reducing your indirect emissions…An organization buying green power can claim to be reducing its carbon footprint, but cannot claim to be reducing its total emissions to the atmosphere. (Emphasis added.)

Not using fossil fuels may be admirable. But by providing negligible investment for renewable energy, RECs are little more than a waste of other people’s money. As a fabricated commodity, RECs are the ultimate greenwash.


Nick Sibilla is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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“The Boondoggle of Boondoggles”

By Nick Sibilla

Oregon is a pioneer in green power. But we’re also a pioneer in wasting other people’s money. Right now, Oregon is home to one of the largest energy boondoggles in the nation: Shepherds Flat wind farm.

Currently under construction in Gilliam and Morrow counties, Shepherds Flat soon will have the largest wind farm in the world. Since wind power is expensive, Shepherds Flat has received over $1.2 billion in federal, state and local subsidies. Apologists say these subsidies will create jobs. But according to The Oregonian, this wind farm will create only 35 permanent jobs. In other words, each job created will cost American taxpayers over $34 million.

Meanwhile, Caithness Energy, the developer of Shepherds Flat, will bear only 10% of the cost. But Caithness will earn a 30% return on investment. In addition, this wind farm will not even power Oregon. All of the subsidized output will go to Southern California Edison, which provides electricity to places like Orange County. This project is nothing more than a triad of corporate welfare, government subsidies and exorbitantly expensive jobs. So is it any wonder residents in Shepherds Flat are calling this project the “boondoggle of boondoggles?”


Nick Sibilla is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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EcoFlats: One More Unsustainable Green Icon for Portland

By Christopher Robinson

So-called “sustainable development” is a longtime political interest in the city of Portland. Although the term itself is never defined, the concept implies the use of “green” design and technologies in order to reduce energy consumption, water use, solid waste and automobile travel. The loftiest goal is “net zero,” whereby all electricity and water needs are met from on-site generation and no outside sources are necessary.

One such “sustainable” project is the EcoFlats apartment building located on North Williams Avenue in Portland’s Boise neighborhood. Recently, the development received a good deal of media coverage due to its implementation of green technologies and an “affordable” price tag. EcoFlats has no interior hallways, no air conditioning, a large roof top solar array and the goal of net-zero energy usage. On the surface it would seem an excellent model for future affordable, sustainable development; but an extensive back-story to EcoFlats’ financing and planning reveal otherwise.

First, EcoFlats’ location is no coincidence. Although promoted as a bicycle commuter friendly location (North Williams Avenue is considered a major “bicycle thoroughfare”), it is within the Portland Development Commission’s (PDC) “Interstate Corridor Urban Renewal Area.” This means businesses and developers can receive subsidies from PDC. EcoFlats sits on land previously occupied by a small equipment repair shop, which was considered underutilized space. In order to aid redevelopment, PDC provided the developer with a $740,000 commercial loan representing roughly 23% of the total project cost. Loans approved by PDC are intended to close financial gaps and may have reduced interest rates if applicants meet certain requirements, such as using sustainable technology.

In addition to the incentives from PDC, the developer also applied for Oregon’s business energy tax credit. The program covers up to 50% of costs towards the purchase of certain technologies. These include high-efficiency combined heat and power projects, such as the $200,000 solar array on top of the building.

The estimated costs are misleading. Tenants pay the energy costs for their residence, so the tax credit only benefits the developer. Proponents argue that energy costs will be lower because the building produces its own energy, cancelling out the cost of solar panels. However, the solar panels are subsidized by taxpayer money. All Oregonians, including the tenants, are footing the bill.

Furthermore, the developer of EcoFlats was not required to build any off-street parking for the building, a significant subsidy that allowed for more revenue-generating units. The developer received a parking exemption because North Williams Avenue is considered a “transit street” because it has a TriMet bus route. However, the majority of tenants likely will own an automobile, meaning the surrounding neighborhood will have to bear the burden of increased on-street parking.

Finally, EcoFlats is part of Energy Trust of Oregon’s “Net Zero” pilot program. The Energy Trust is a non-profit organization funded through a three percent, state-mandated surcharge on customers of the state’s largest energy suppliers, including PGE, PacificCorp and NW Natural. The Energy Trust works to promote reduced energy use by providing incentives from the money they collect. Projects enrolled in their “Net Zero” pilot are eligible to receive up to $575,000 in various incentives. The goal is to achieve net-zero energy consumption through careful planning and implementation of new technology. Again, however, the benefits are concentrated in developments such as EcoFlats, while the cost is spread across all who pay the three percent energy surcharge.

In total, EcoFlats has $1,415,000 in potential and realized subsidies, representing roughly 44% of the total project cost. Yet, even with these subsidies, the rents are very high for the local market. Portland Housing Bureau designates the Boise neighborhood as a low-moderate income community. Rent for 600- and 750-square-foot apartments at EcoFlats are $1,000 and $1,500 a month, respectively. This means it does not meet the requirements of low-moderate income families for affordable housing, which should represent less than 30% of gross annual income. Current Boise neighborhood residents are effectively priced out of the development.

There are clear winners and losers here. The 18 residential units and two commercial spaces are filled, which is good for the developer. The City of Portland wins, because they now collect almost double the property taxes on the land. The Energy Trust wins, because they can claim more energy savings, though whether or not the building ever achieves its net-zero energy goal will depend on the usage of the tenants. It will require a conscious effort in order to do so, and actual performance is likely to lag the estimated performance.

Oregon taxpayers and all who pay the Energy Trust surcharge are the big losers. They are required to make up the difference in costs for “sustainable development” but receive none of the touted benefits. EcoFlats is only one in a long list of heavily subsidized projects which have increased in number in recent years. Eventually, people will realize that “sustainability” in Portland is not about helping the environment, but rather about creating an image that only benefits a select few.


Christopher Robinson is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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The Ultimate Greenwash

By Nick Sibilla

Fox News is greener than Starbucks.

Surprised? You should be. According to the newly published Corporate Renewable Energy Index, News Corporation, the parent company of Fox News, is actually the 8th highest corporate consumer of green power. Starbucks, on the other hand, is only 14th. How is this possible? Welcome to the topsy-turvy world of renewable energy credits.

These credits—also known as RECs—are created every time one megawatt-hour (MWh) of renewable energy is generated. RECs are sold separately from green power and represent the intangible, environmental benefits of renewable energy. But by purchasing RECs, corporations can still claim they are financing clean energy. In fact, in 2010, over 70% of all corporate RE purchases was through RECs.

Yet RECs are a waste of money for two major reasons. First, the average price of a REC is around $1 per MWh. But according to BusinessWeek, the actual cost of clean energy can range anywhere from $40 to over $90 per MWh!

Second, RECs do nothing to combat climate change. The EPA even admits that buying RECs does not lower greenhouses gas emissions! These credits are the ultimate greenwash.

Investors and environmentalists should be skeptical any time a corporation claims to be going green. In short, RECs are a complete wreck.


Nick Sibilla is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Karla talks Attack of the 50ft Environmentalist on I Spy on Salem

On the June 4, 2011 episode of I Spy on Salem, Karla joins the show to examine Oregon’s lack of timber harvesting.  You can listen to her appearance on the right.  Below is the information from the show:

Listen to Karla Kay Edwards, Rural Policy and Land Use for Cascade Policy Institute, and Rex Storm, Forest Policy Manager for Associated Oregon Loggers discuss (what we titled our show) The Attack of the 50-foot Environmentalist. Find out what’s really going on with environmental groups, the industry it’s become, and if logging can be revived.

I Spy on Salem is aired from 11:00 to noon on KYKN 1430 in Salem.  If you’re outside of the Salem listening area you can listen live at www.kykn.com.  Busy Saturday, not a problem because after the show is aired we upload it to our webpagewww.ispyonsalem.com so you can listen at your convenience.

 

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Stop Self-Service Electric Car Charging

A specter is haunting Oregon. One of two states that prohibit self-serve gasoline, Oregon is now caving in to the electric vehicle lobby by allowing owners to plug their cars into commercial charging stations all by themselves. They can even plug into personal charging stations and their own wall plugs at home. All this activity is taking place away from the protective eyes of our friendly, helpful state safety regulators.

 

Don’t these rogue individualist electric car owners know that they’re likely to electrocute themselves? What training do they have to safely charge anything? None. What about the innocent children and inquisitive neighbors who might be leaning against their cars when the power surges and turns their sleek metal machines into death traps? Don’t they know that it rains in Oregon, and rain and electricity don’t mix well at all?

 

NO. Not in Oregon. Oregon is for dreamers, not electric charging schemers. This travesty must not stand.

 

The Electric Vehicle Safety/Plug Jockey Jobs Act has just been introduced in Salem to require all commercial charging stations to be manned (or womaned) by state certified plug jockeys who must earn the state minimum wage.

 

The legislation further requires that if you want to charge your electric car at home, you must make an appointment at least 48 hours in advance with a state certified plug jockey who will arrive at your home within a specified four-hour window to plug in and charge your vehicle. He/she must stay at your home until the car is fully charged (which will average four to eighteen hours). Offering milk and cookies to the plug jockey is encouraged, but shall remain voluntary during a trial period. Once the car is fully charged, your plug jockey will unplug the vehicle and leave your home. You will be billed for his/her time to the nearest minute. To ensure tax compliance, these charging bills cannot be paid in cash to the plug jockey. Payments may be mailed to the State Department of Anachronistic Regulations, or may be deposited in special Plug Jockey Drop Boxes strategically placed throughout the state.

 

Oregonians know that they’ll set themselves on fire if they pump their own gasoline, and they know that low-skilled minimum wage workers will lose their jobs and form roving bands of disgruntled youth if we were ever to repeal our self-service gas ban. They now must recognize similar dangers associated with allowing the elite electric car owners among us to charge their own vehicles. We must stop this madness before it spreads to the general gasoline-car-owning population.

 

Call your state legislator now. Demand that they protect us against ourselves and create some unneeded jobs by voting for the Electric Vehicle Safety/Plug Jockey Jobs Act. Remember, it’s for the children.


In addition to being a founder and Senior Policy Analyst, Steve Buckstein occasionally serves as Cascade Policy Institute’s Satirist-in-residence.

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Rural Oregon Is Tired of Being Ignored

A statistic commonly used to highlight the economic hardship Oregonians bear is that Oregonians on average earn 91 cents to every dollar of average earned income nationwide. But that story is even more dramatic for rural Oregonians, who earn a mere 75 cents on the dollar when compared to personal income nationally. Yet, the Oregon legislature has done nothing significant to begin to change this dire situation, despite the fact that bills have been introduced that could help rural economies.

 

The few economic stimulus bills that have worked their way through the system are quite limited and will benefit urban areas far more than rural areas. Bills that could have an immediate and direct benefit to rural areas have been essentially ignored, like bills to allow more water withdrawal from the Columbia River, better management of our state forests, or a pilot project to privatize some management functions of our state parks. Instead of moving these important ideas forward, we have seen the persistent movement of ideas which continue to handicap already depressed economies, like increasing marine reserves or establishing additional unnecessary government imposed natural resource protection programs.

 

Rural Oregon is tired of either being completely ignored by the legislature or told that eco-tourism is the beacon of hope and we should be thrilled with the seasonal minimum wage jobs that have replaced living wage jobs once provided by a thriving renewable natural resource industry.

 

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The high price of “green” power

The following excerpt is provided by The Executive Club:

6:00 pm •  Wed, May 4th  •  Airport Shilo
The high price of “green” power


Todd Wynn, Vice President of Cascade Policy Institute, will be on hand for the May meeting to, well, illuminate the dramatic increases in Oregonians’ utility bills because of the pop-culture foolishness that passes for wisdom in Salem.

Since January 1,  Pacific Power electric rates have increased by 14.5% and PGE rates by 4.2%.  These increases were due largely to restrictive energy policies adopted in Salem under the state’s politically trendy  “Renewable Portfolio Standard.”   Cascade has just released a report showing that this energy mandate, passed in 2007, is already laying additional financial burdens on Oregonians and will certainly do much more damage over the next 15 years!

Be at the Shilo meeting to fully understand the plight facing you and other Oregon ratepayers.  More to the point, learn what you can do to fight back against this state’s latest politically correct, foolish, threat to the entire Oregon economy.

Meeting Bonus!
(something else to make make your blood boil).
Many who benefit from the clear and sparkling water provided by the Bull Run watershed (most of you) may be surprised to hear that not all is well in the Portland Water World.  That is why we will also a have a quick update from Scott Fernandez, the man who is confronting Portland City Commissioner Randy Leonard over Leonard’s  determination to push a needless modification of the pristine water system.

This is a fascinating story.  If Leonard prevails, water bills from that system will be rising 85% over the next 5 years!  Fernandez, a trained microbiologist, in a short, concise presentation, will tell us why Leonard’s plans are so very costly and so unnecessary!

 

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The ABCs of Environmental Hysteria: Activists, Bisphenol-A and Children

Spreading like wildfire, more attempts have been made to ban Bisphenol-A (BPA) at the state level in 2011 than in any previous year. More than 50 bills have been introduced in legislatures across the country to ban a chemical that commonly lines beverage and food containers. The Oregon Senate recently passed Senate Bill 695, which would make illegal the sale, distribution or manufacturing of a child’s beverage container made or lined with BPA. The bill, now headed to the Oregon House, is a perfect example of baseless environmental hysteria leading to illogical and destructive regulations.

 

Year after year, despite overwhelming scientific evidence to the contrary, environmental lobbyists and activists descend upon the state capitol to convince legislators that “evil” corporations insist on using a chemical they claim is unsafe. With the emotional argument of “saving children from cancer” as their mainstay, these activists are pressuring Salem politicians to ban BPA altogether.

A number of important lessons can be gleaned from their efforts:

First, people tend to overestimate risk and to exaggerate the benefits of risk-reducing laws. Proponents of banning BPA insist that government should use the “precautionary principle.” This means that if a possibility of causing harm to the public exists, despite lack of a scientific consensus, then politicians have a “social responsibility” to protect the public by passing laws to prevent possible harm. The precautionary principle allows politicians to justify discretionary decisions based solely on public fear. In the case of BPA, politicians may choose to ban the product entirely, even if the scientific community continues to exonerate this chemical of the claims made against it.

In BPA’s defense, we know a lot about it. In wide use for over fifty years, the chemical has been  extensively studied. The science has revealed that consumer exposure to BPA is far below levels of concern, even for infants and children. BPA is actually quite useful in protecting consumers against food contamination. In other words, banning BPA could create significant new risks. Products or other chemicals that would be introduced to perform the same functions may be more expensive, not work as well, and produce new safety problems that have yet to be studied. Thus, switching to a less tested and potentially less safe alternative is risky for children and infants. In this case, adherence to the precautionary principle actually should preclude the use of the precautionary principle by those concerned about public health!

Second, the consumer market is already adjusting to meet the demands of chemical hypochondriacs. Numerous manufacturers produce BPA-free beverage containers, and major retailers such as Walmart are asking for alternatives to meet consumer demand. BPA-free manufacturers openly advertise their products as BPA-free. When a consumer desire becomes mainstream, regardless of whether it is scientifically justified, a free market will meet that demand. This should make one wonder why politicians in Salem think they need legislation to address BPA worries.

Finally, BPA is just today’s target in a never-ending war by environmentalists to eliminate from the environment anything humanly manufactured. This attitude can be summed up with one word: chemophobia – the unreasonable conviction that all chemicals are bad and that all things loosely defined as “natural” are good. Fear makes it difficult for anyone – let alone politicians – to take a rational look at the issue, especially when ban proponents are pulling the “Do you hate children?” card.

Although reason and objectivity eventually should win a debate, they often don’t. That is yet another reason why it is so important to limit government interference. As more state politicians pressured by hard-charging environmentalists and misguided parents move to ban BPA, pressure will build on those who hold out. Unjustified bans become the rationale for more bans. Sadly, it won’t stop with BPA, as special interests always will strive to use government to control fellow citizens and to limit their choices.

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Al Gore, Newt Gingrich, and the Unintended Consequences of Ethanol Policy

By Eric Lowe

Successive presidential administrations over the past 50 years have vowed to aggressively pursue energy independence, attempting to decrease the amount of oil imported from the Middle East. The federal government has latched onto corn ethanol as the silver bullet solution to domestic fuel production disparities. Yet again, public policy creates a set of unintended consequences that ought to be fully considered if Oregon and the nation as a whole are going to continue to transfer demand and taxpayer dollars to this fledgling industry.

 

As it currently stands, regulation requires a certain volume of ethanol to be blended into domestic fuel supplies annually, and a percentage ratio of this ethanol-to-petroleum blend is “permitted” in gasoline refining by the EPA. Additionally, the subsidies, grants and tax loopholes for the ethanol industry are numerous. According to Rice University’s Baker Institute for Public Policy,[1] in 2008, roughly $4 billion in taxpayer dollars were spent to subsidize replacement of about 2 percent of the U.S. gasoline supply. Up to 15% of gasoline now can be replaced with ethanol (E15 blends), and taxpayers subsidize half of all related costs for ethanol.[2]

 

Starting with the 2005 Energy Policy Act, 12.95 billion gallons of renewable fuel must be used in 2010, increasing to 36 billion gallons per year by 2022.[3] The EPA recently raised the amount of ethanol permitted in the blending of fuel to 15%, effectively mandating that many refiners produce at this level to meet legislative requirements. U.S. ethanol enjoys a roughly half-dollar per gallon import tax, making domestically produced ethanol artificially competitive over cheaper, more energy-dense Brazilian sugarcane ethanol. In addition, domestic producers receive a whopping 45-cent per gallon tax credit, a handout even certain refiners within the industry have said they don’t need.[4]

 

Many have begun realizing that ethanol policies may be causing more problems than they solve. Studies show that vehicles built in or before 2007 and all non-road engines aren’t designed to operate on the E15 ethanol (15% ethanol) currently being pushed by the EPA. These higher blend fuels increase emissions of particulate air pollution, ground-level ozone (which is harmful to humans) and other toxic air pollutants.[5] These emissions can mitigate or entirely eliminate the public health arguments for ethanol.

 

Ethanol policies on the state and federal levels also don’t account for cost. According to the U.S. Department of Energy research, E10 has a 3.6% fuel economy loss compared to traditional gasoline, E15 has a 5% loss, and E20 has a 7.7% loss.[6] Furthermore, older vehicles and all non-road engines (ATVs, leaf blowers, tractors, generators, etc.) are put at risk by these policies. These generally do not have oxygen sensors, so with more oxygen-rich fuel they burn “lean,” or hotter than normal, contributing to significant wear and tear and early degradation. For the average family, having these expensive machines break down far faster than they otherwise would is an expense they can hardly afford. This means that the roughly 247 million “legacy” vehicles and 400 million non-vehicle gasoline engines are negatively impacted by these policies.

 

The mandates, regulations, grants, tariffs and tax credits surrounding the ethanol industry are, unsurprisingly, of a political origin, and not necessarily pertaining to sound environmental or economic policy. Even Al Gore admits as much in a recent public reversal of his support for what he then referred to as “gasohol.”[7]

 

“One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for President,” he said. This isn’t the first time a presidential candidate has supported something purely to gain favor from a specific constituency.

 

Al Gore also admits a common problem with government programs, particularly the ethanol industry, when he said, “It’s hard once such a program is put in place to deal with the lobbies that keep it going.”

 

Interestingly enough, at a recent Renewable Fuels Association conference (in, of course, Iowa), Newt Gingrich called upon the government to mandate all vehicles sold be flex-fuel models.[8] Mr. Gingrich explained that “the big-city attacks” on ethanol subsidies are really attempts to deny prosperity to rural America. Not only were his remarks politically tinged and partisan, they lacked any sound basis.

 

While it is hard to believe Al Gore is wiser on the topic of government intervention than Newt Gingrich, in the case of corn ethanol, he is. Politicians ought to account for the unintended consequences of public policies that affect every American. It is well overdue to reverse the subsidies, taxes and mandates on the state and national levels that force ethanol upon consumers and artificially prop up the industry for reasons of political favoritism.


[1] http://www.bakerinstitute.org/publications/EF-pub-PolicyReport43-121809.pdf

[2] Ibid.

[3] http://www.afdc.energy.gov/afdc/ethanol/incentives_laws_federal.html

[4] http://switchboard.nrdc.org/blogs/slyutse/top_us_oil_refiner_says_corn_e.html

[5] http://www.ewg.org/biofuels/report/Ethanol-Health-Risks-and-Engine-Damage

[6] Ibid.

[7] http://online.wsj.com/article/SB10001424052748703572404575634753486416076.html

[8] http://online.wsj.com/article/SB10001424052748704698004576104682930044012.html

 

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Oops! Renewable Energy Costs Oregon Billions

In 2007, Oregon legislators decided they would force Oregonians to purchase renewable energy whether or not they wanted it or could afford it. Legislators proclaimed this would help the Oregon economy and make our energy system more affordable and reliable. They were wrong.

 

Last year, one in 30 Oregonians had their electricity cut off due to inability to pay, and enrollment in the low-income energy assistance program has increased significantly. On January 1, 2011, electricity rates increased significantly for Oregon households: Pacific Power rates increased by 14.5% and PGE rates by 4.2%. PGE also added a “Renewable Resource Adjustment” to ratepayers’ bills in January 2010. Currently, this rate is set at 0.22 cents per kWh, or approximately $2.13 extra per month, for an average household. Rate increases such as these will be the norm over the next fifteen years as utilities work to comply with restrictive energy policies on the state and the federal levels.

 

But legislators proclaimed that the 2007 renewable energy mandate would help “accelerate the transition to a more reliable and more affordable energy system.” What went wrong?

 

Unfortunately, renewable energy costs more than traditional energy sources and is often less reliable. Although generating energy from wind turbines and solar panels is essentially free, the costs of construction, maintenance and integrating inconsistent energy into the grid are prohibitively expensive. Thus, adding more renewable energy will increase costs and cause substantial economic hardships for Oregonians and Oregon businesses.

 

A Cascade Policy Institute report, The Economic Impact of Oregon’s Renewable Portfolio Standard, exposes the cost of renewable mandates on the Oregon economy. Over the period of 2015-2025, the average Oregonian household will pay an additional $1,706 in higher electricity costs. The average commercial business will spend an extra $9,641 and the average industrial business an extra $80,115. Over the same period, the mandate will cost Oregonians an additional $6.811 billion over conventional power, within a range of $4.009 billion and $9.310 billion.

 

Higher costs will lead to loss of jobs as well. By 2025 the Oregon economy will lose an average of 17,530 jobs, within a range of 10,025 jobs under the low-cost scenario and 24,630 jobs under the high-cost scenario.

 

Legislators may be able to justify higher electricity costs if environmental benefits, in terms of reduced emissions, outweigh the costs. However, it is unclear that the use of renewable energy resources, especially wind and solar, actually reduces emissions. Due to their intermittency, wind and solar require significant backup power sources that are cycled up and down to accommodate the variability in the production of wind and solar power. As a result, a recent study found that wind power actually increases pollution and greenhouse gas emissions.

 

Also, businesses and industries with high electricity usage likely will move their production, and emissions, out of Oregon to locations with lower electricity prices. Therefore, increasing renewable energy in the state will not reduce global emissions, but rather send jobs and capital investment outside the state.

 

In the end, renewable energy can and should expand according to voluntary purchases that reflect true demand. Government should not be mandating that citizens purchase a product they may not value or cannot afford.

 

It is time to face the truth. Legislators thought that by forcing Oregonians to purchase renewable energy they could make electricity more affordable and reliable. They were wrong. As a first step, legislators should repeal the renewable energy mandate and other restrictive energy policies before electricity costs spiral out of control. In addition, future energy policies need to be subject to a rigorous analysis of economic costs and environmental benefits.

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Todd talks Renewable Energy Portfolios on Jason Lewis

Listen to Todd Wynn talk about renewable energy portfolios on the Jason Lewis show (click play to the right).

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Oregon Catalyst features Cascade’s newest report on the cost of renewable energy

http://oregoncatalyst.com/8204-darker-side-green-tens-thousands-lost-jobs-oregonians-pay-electric-bills.html

Oregon Transformation makes a blog post on Oregon Catalyst describing the impacts of restrictive energy policies on the Oregon economy.

These results came from our recently released economic analysis showing that renewable mandates imposed by the Oregon legislature in 2007 will have a significant and negative impact on our economy and standard of living.

 

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Oregon Catalyst blog features Cascade’s renewable energy economic impact report

http://oregoncatalyst.com/8204-darker-side-green-tens-thousands-lost-jobs-oregonians-pay-electric-bills.html

Oregon Transformation makes a blog post on Oregon Catalyst describing the impacts of restrictive energy policies on the Oregon economy.

These results came from our recently released economic analysis showing that renewable mandates imposed by the Oregon legislature in 2007 will have significant and negative impacts on our economy and standard of living.

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Renewable Energy: Leaving Oregonians out in the Cold

In 2010, approximately one in 30 Oregonians had their electricity cut off due to inability to pay. Enrollment in the low-income assistance program has increased significantly in the past few years. Part of this was undoubtedly due to the recession, but mandating the addition of more renewable energy to the grid has and will continue to increase electricity rates. Ever-increasing rates will leave even more Oregonians unable to pay their bills.

In 2007, Oregon legislators passed Senate Bill 838 which established a state Renewable Portfolio Standard (RPS), effectively forcing utility customers to purchase renewable energy. A recent economic analysis by Cascade Policy Institute reveals this bill has significant negative consequences which are just beginning to come to light.

(more…)

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New Study: Forcing Oregonians to Purchase Renewable Energy Proves Costly

Cascade Policy Institute has released a new study showing that the Oregon legislature’s renewable energy mandates passed in 2007 will be costly to citizens and will threaten standards of living and economic recovery.

The Oregon legislature has officially convened, and legislators are hard at work crafting or reforming energy policy. With an economy in recession, budget shortfalls and a recent and significant increase in electricity rates, legislators have much to address with regard to how we generate electricity in this state.

Renewable energy mandates and other restrictive energy policies are just beginning to cause financial burdens to Oregonians and, according to Cascade’s report, over the next 15 years much more damage will be done.

The report, The Economic Impact of Oregon’s Renewable Portfolio Standard, prepared by economists at the Beacon Hill Institute at Suffolk University in Boston, found that mandates forcing renewable energy on ratepayers will increase electricity rates significantly. Between 2015 and 2025, the average Oregon household will pay an additional $1,706 in higher electricity costs. The average commercial business will spend an extra $9,641, and the average industrial business an extra $80,115.
(more…)

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Todd Wynn testifies before the Oregon Senate on the proposed plastic bag ban

Todd Wynn presents the Oregon Senate with information from Cascade Policy Institute and the Beacon Hill Institute on the financial and job related impacts of the plastic bag ban.

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Todd Wynn on Bill Post Hour 1 (VIDEO)

Click here for Part 2

Todd Wynn fills in for Bill Post on Feb 7th, 2011. Guests from this first hour include:

Christina Martin – Cascade Policy Institute – discusses education, school choice, and the upcoming legislative session.

Gus Gates – Surfrider Foundation – discusses the plastic bag ban in Oregon.

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Todd debates the bag ban on Populations TV

Todd and Gus Gates of the Surfrider Foundation debate the plastic bag ban on Populations TV.

A special thanks to Jim Winkle and Populations TV

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The Proper Role of Government: Banning Bags and Setting Prices?

Todd WynnCascade Commentary

The Proper Role of Government: Banning Bags and Setting Prices?
by Todd Wynn
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One of the most controversial debates in Oregon’s state capitol this year is banning single-use bags, Senate Bill 536. There is something more important to add to the debate than just the rhetoric from environmental activists, politicians, paper companies and grocery stores. The question of whether government has the right to ban a product and to force retailers to charge a government-created price is an important one to consider, and it has significant implications for government involvement in Oregonians’ lives.
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Oregon’s Bag Tax: The Economic Impacts on Oregonians and Retail Stores

FOR IMMEDIATE RELEASE, February 8, 2011
CONTACT: TODD WYNN
CASCADE POLICY INSTITUTE
TEL.: 503-242-0900
FAX: 503-242-3822
E-MAIL: TODD@CASCADEPOLICY.ORG

Oregon’s Bag Tax: The Economic Impacts on Oregonians and Retail Stores

Download the report here

A proposed retail bag ban in Oregon would have a significant negative economic impact according to a report released today by Cascade Policy Institute and Americans for Tax Reform.

One of the first bills likely to be voted on during this 2011 legislative session is the ban on single use bags in retail stores across Oregon. The Senate Committee on Environment and Natural Resources will hold a public hearing in Salem today at 3:00pm on the ban. If the legislature ultimately passes Senate Bill 536, it would be the first statewide bag ban in the United States.

If passed, retail stores will still be allowed to offer paper bags, but they must charge a minimum of 5 cents per bag. This minimum charge has the same effect as a new tax on consumers.

Cascade Policy Institute and Americans for Tax Reform (ATR) partnered with the Beacon Hill Institute in releasing a short report, Oregon’s Bag Tax: The Economic Impacts on Oregonians and Retail Stores, showing the financial burdens that would be imposed by the bag tax.

The report, prepared by economists at the Beacon Hill Institute at Suffolk University in Boston, found that the bag tax would have a significant negative impact on the state’s economy and on Oregonians.  All other things being equal, Oregonians will allocate a portion of their spending to the bag tax and, as a result, businesses will suffer a reduction in sales and profits. The reduction in sales would lead to a reduction in employment and investment.

“At a time when voters are concerned about jobs and the economy, sponsors of this regressive bag ban seek to destroy millions of dollars of disposable income and investment in Oregon,” said ATR President Grover Norquist. “This is yet another example of government’s penchant for collateral damage – in this case slamming job seekers and the working poor.”

For fiscal year 2012, the report finds:

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Intertwined: Fish Consumption and Water Quality Standards

The Oregon Department of Environmental Quality (DEQ) has scheduled a series of public workshops in February regarding raising the state’s water quality standards. DEQ proposes to make Oregon’s water quality standards among the toughest in the country. The reason? DEQ argues that the more fish you eat, the more you are exposed to the cumulative effects of toxins in water, and therefore the higher the standard should be for those toxins.

(more…)

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Plastic Bags: It’s Time to Get Beyond “Ban, Ban, Ban”

Todd WynnCascade Commentary

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by Todd Wynn

Ban styrofoam, ban Bisphenol-A, ban plastic bags, ban phosphate dishwashing detergents, ban coal. What else can we ban? That represents the typical mantra for environmental groups and activists these days. Their only method of effecting change is to use government force to take choice from citizens. (more…)

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Should We Be Worried, Very Worried?

By Gordon J. Fulks, Ph.D.

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From near record-high to near record-low temperatures last November in the Pacific Northwest, from relatively warm ocean conditions and “dead zones” to relatively cold ocean conditions and fabulous salmon runs off our Pacific Coast, from an unusually cold winter to an unusually hot summer in Russia, from near record-low Arctic sea ice to near record-high Antarctic sea ice, our climate displays wide variability. But an army of psychologists, journalists and even scientists make sure that the warm swings they deem alarming get the greatest attention. These propagandists know that the selling of Global Warming is all about perception, not reality. (more…)

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Renewable Energy Woes

Todd WynnQuickPoint!

Renewable Energy Woes

by Todd Wynn

Earlier in the decade, the City of Portland and the State of Oregon set goals for the government to reach 100% renewable energy by 2010. Both failed miserably. Portland reached only nine percent and the state only one or two percent. What was the reason for failure? According to state officials, the goal was unrealistic and too costly.

Although fiscal reality blocked the government’s goal, another goal will directly affect Oregon households. In 2007, the Oregon legislature imposed a Renewable Portfolio Standard. Major electric utilities are forced to provide 25% of their energy from renewable sources (excluding hydroelectricity) by 2025. This means all ratepayers are forced to pay for renewable energy whether they want or can afford it.

(more…)

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Renewable Energy Failure: Why Government Mandates Don’t Work and What They Will Do to Our Economy

By Torey Holderith and Todd Wynn

Download the full report

Here is an excerpt:

Renewable energy has long been hailed as the cure-all for Oregon’s economy. “Good policy, good for economic development, good for the environment,” the Oregon Department of Energy declared. Sounds too good to be true doesn’t it? That’s because it is. Good public policy enables long-term achievement while also enabling short-term success. The reality of the energy policies coming out of the State of Oregon and the City of Portland is that they do neither. (more…)

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City of Portland and State of Oregon Fail to Achieve 2010 Renewable Energy Goals

FOR IMMEDIATE RELEASE

Contact:

Todd Wynn
Vice-President
Cascade Policy Institute
503-242-0900
todd@cascadepolicy.org
www.cascadepolicy.org

City of Portland and State of Oregon Fail to Achieve 2010 Renewable Energy Goals

Download full report here.

Portland, OR, December 14, 2010 – In the last decade the City of Portland and the State of Oregon set goals for the government to reach 100% renewable energy use by 2010.

Nothing regarding the progress of reaching these goals has been released to date.

Why? Because both entities have failed miserably due to the goals being unrealistic from the start and the reality of fiscal responsibility finally setting in. (more…)

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Renewable Energy Via Freedom, Not Force

Todd Wynn

Renewable Energy Via Freedom, Not Force

By Todd Wynn

This article was published as a guest column on EarthTechling.com.

Many believe the free market and renewable energy are at odds. Renewable energy advocates proclaim fossil fuels will continue to dominate the energy landscape, even if consumers perceive them to be rife with environmental issues. This belief has driven political leaders to subsidize renewable energy development, mandate utilities to provide renewable energy options, and force citizens to purchase them. The free-market stance looks at the situation differently.

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Biomass: Boon or Boondoggle?

Karla Kay Edwards

Cascade Commentary

Biomass: Boon or Boondoggle?
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by Karla Kay Edwards

As Oregon communities struggle through this recession, they are looking for an economic “silver bullet” to help them survive and to become a foundation for future economic prosperity. Renewable energy has been thought to be one of those “silver bullets,” due to Oregon’s Renewable Portfolio mandate and the vast amount of government funds devoted to these energy technologies. With Oregon’s expansive forestlands, woody biomass, at first glance, seems to present an opportunity both to put more people to work in rural communities and to provide a renewable energy source.

(more…)

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Vote for Hines, Oregon!

Karla Kay Edwards

Vote For Hines Oregon!

By Karla Kay Edwards

The economies of rural Oregon communities have been struggling for years, but the resourcefulness and resiliency of those communities keep them moving forward.

One example of resourcefulness is the volunteer fire department of Hines, Oregon. They have two fire engines with a combined age of 62 years. They desperately need to retire the 1973 fire engine they endearingly refer to as “Barney,” but they are simply unable to raise the $250,000 to replace it. Between the Hines and Burns volunteer fire departments, they cover the entire 10,000+ square miles of Harney County, so needless to say, they need a reliable vehicle to actually cover such a vast area.

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Green Investment Failure

Rebecca Steele
QuickPoint!

[audio:QuickPoint7-14-10.mp3]

Click the play button to hear the audio commentary

by Rebecca Steele

Green Investment Failure

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Building “green” is all the rage in Portland. Eco-roofs and solar panels have become routine, and now the goal is for “net-zero” buildings that consume less energy or water than they produce.

However, while the idea is green, expect red. The City of Portland’s last attempt to promote net-zero construction ended in a subsidized spending spree.

In 2005, the Green Investment Fund was established as a competitive grant program, awarding money for five years to spur green building. Enormous government subsidies were required for most grantees. DaVinci Arts Middle School, the only project actually to achieve net-zero energy, was realized because of $500,000 in community-donated services. The June Key Delta House, a proposed net-zero community center, received over $400,000 in PDC grants and loans. The Blanchet House of Hospitality, also hoping for net-zero energy, is enabled by a PDC $2 million grant and land swap. Other subsidized Green Fund projects failed miserably. Construction never began on the million-dollar Shizen condominiums or the Kenton Living Building, both net-zero energy contenders.

(more…)

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Todd on Populations

Todd Wynn

Todd Wynn on Population’s

Check out Todd Wynn discussing the BP oil spill, energy policy, and climate change on Populations TV.

Special thanks to Populations. You can check out other interviews like this at http://www.populationsprogram.com/

 

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Shedding Light on Solar Subsidies

Andrew Hillard
QuickPoint!

[audio:QuickPoint6-23-10.mp3]

Click the play button to hear the audio commentary

By Andrew Hillard

Shedding Light on Solar Subsidies

If all goes as planned, July will be the start of a sunny future. Next month, Oregon Public Utilities will offer feed-in tariffs, or subsidies, for solar power. Under House Bill 3039, homeowners will be eligible to receive 55 to 65 cents for solar energy, compared to the usual cost of 10 cents per kilowatt-hour. The pilot project intends to boost jobs and clean technology by subsidizing 2,500 homes over 15 years.

However, legislative forecasts, like weather predictions, are often wrong; and in this instance, the sunshine will be short lived…

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Todd on Sustainability Today TV

Watch Todd Wynn discuss renewable energy, wind power, and other environmental topics on Sustainable Today TV.

Special thanks to Sustainable Today for the video!

 

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Cascade Report: Think Twice Why Wind Power Mandates Are Wrong for the Northwest

Todd Wynn

Cascade Report: Think Twice Why Wind Power Mandates Are Wrong for the Northwest

by Todd Wynn and Eric Lowe

New report by Todd Wynn and Eric Lowe highlights the problem with the legislature picking winners and losers in the energy market.

Download the Full Report

Watch an Interview with Todd Wynn about the perils of forcing wind energy on the grid.

Click through for full report

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Worried About Climate Change? Promote Free Markets!

Todd Wynn
Cascade Commentary

Worried About Climate Change? Promote Free Markets!

by Todd Wynn

Every day more and more Americans are growing skeptical of the climate change doomsday claims and plans to ration energy through cap-and-trade type proposals. Despite this, many environmentalists still claim that far-reaching government intervention is needed to achieve greater energy efficiency and lower greenhouse gas emissions to reduce the threat of global warming. Although there has been no statistically significant global warming since at least 1995, the same groups often claim economic growth and lack of comprehensive environmental regulations have created a society that wastes energy and pays no regard to greenhouse gas emissions. But what if less energy use and lower greenhouse gas emissions are a byproduct of limited government and economic freedom? What if environmentalists’ goals can be reached by freer markets and prosperity? Recent Cascade Policy Institute research shows that very phenomenon.

(more…)

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NEW REPORT – Economic Freedom: A No Regrets Strategy for Reducing Global Energy Consumption

Todd Wynn
Economic Freedom: A No Regrets Strategy for Reducing Global Energy Consumption

A new report from Todd Wynn of Cascade Policy Institute

Summary:

This empirical study exposes a relationship between greenhouse gas intensity, energy intensity and economic freedom. The level of a country’s economic freedom is a statistically significant and negative determinant of both energy intensity and greenhouse gas intensity. Countries with higher levels of economic freedom not only have more energy efficient and less carbon intensive economies, but over time these countries continue to decrease the amount of energy used and the amount of carbon dioxide emitted per unit of production. The merits of free markets and economic prosperity should not be overlooked as a potential method for reducing carbon emissions.

Download the Full Report

Todd talks about the report:

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The Climate Swindle

Todd Wynn
Cascade Commentary

By Todd Wynn

Download Full Commentary in PDF

Are you worried about your carbon footprint hurting the earth? Don’t worry. Now climate doomsayers can sleep easy at night. For a fee a carbon offset provider will gladly funnel your money into earth friendly projects aimed to reduce greenhouse gases, such as planting trees in Ecuador or supporting a wind farm in Texas. But are carbon offset providers really delivering what they claim? Studies of international carbon offset schemes have revealed examples of widespread fraud and abuse. And now, investigations into two of the most prominent carbon offset providers in the U.S. have revealed that neither of them actually offers real reductions in greenhouse gas (GHG) emissions.

(more…)

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The Climate Swindle

Todd Wynn
Summary: Carbon offsetting has spread quickly in the past few years, fueled by worries of human induced climate change. The newfound popularity of carbon offsets warrants a closer examination of their legitimacy. Studies of some carbon offset schemes have revealed examples of fraud and abuse. These examples caution against the use of offsets for regulatory compliance.

This report offers an in-depth look into one of the most prominent carbon offset marketers in the United States, the Bonneville Environmental Foundation (BEF). The audit casts serious doubt on whether carbon offsets will ever be a product that can be verifiable and additional. The problems that plague the carbon offset concept will most likely never be solved, meaning that the offset mechanism will always be questionable in delivering real verifiable reductions in greenhouse gases.

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