Going Green – What Is The Best Policy?

Severe weather, devastating forest fires and compelling scientific data are all compelling reasons to believe that the growing industrialization of our planet is causing global warming, which in turn is creating climate change. The majority of Oregonians believe global warming must be swiftly addressed by our state and federal government.

Action yes, but what is the most effective course of action? Countries, states, and cities around the world have pursued three different programs to reduce greenhouse gases with varying degrees of success.

1. Cap-And-Trade – Policies allow a government agency to sell or allocate a limited number of permits to discharge specific quantities of a greenhouse gases for a finite period of time. In theory, this program will provide the private sector the flexibility to reduce emissions while stimulating technological innovation and economic growth.

In practice, cap-and-trade policies are complex and difficult to manage by understaffed government agencies. The complexities of these types of programs usually takes time for the private sector to evaluate and sometimes exploit. In Australia this type of program allowed utilities to re-open coal-fueled power plants, which resulted in increased greenhouse gas emissions. In Oregon, this type of system resulted in fraudulent practices by both the public and private sector.

2. Carbon Tax – Policies allow a government agency to levy a tax on the carbon content of fuels, such as coal, oil and natural gas. The negative financial impact of a carbon tax may be addressed by using tax revenues to favor low-income groups. In theory a carbon tax will reduce CO2 emissions and will have minimal impact on the economy.

In practice, the price increase on carbon content fuels, results in a swift reduction in fossil fuel consumption. Carbon tax policies around the world produce significant price increases to the private sector, which are in turn passed on to the consumers. The riots in Paris, France are a result of a poorly planned carbon tax, which would have created a financial burden on low-income groups.

3. Renewable Energy Incentives – Policies provide financial incentives to the private sector to use renewable energy. In theory, the policies will result in the private sector developing new renewable energy projects, which will replace fossil fueled power plants without any significant increases in the cost of electricity.

In practice, renewable energy incentives have resulted in the development of new renewable energy projects and the closure of fossil fuel power plants. The U.S. Energy Policy Act of 2005 created tax credits for renewable energy projects, which resulted in a dramatic building program of wind farms and solar parks across America.

In 2005, coal fueled power plants provided over 51% of America’s electricity. In 2018, coal fueled power plants provide 29% of America’s electricity. Why? Economics, pure and simple. Renewable energy can now generate electricity for significantly less money than any form of fossil fuel.

In conclusion, I am a proponent for renewable energy tax incentives because these types of programs result in the expeditious move from fossil fuels to renewable energy without negatively impacting low-income groups. Renewable energy incentives can also be used to encourage consumers to improve the energy efficiency of their homes, which will conserve energy and to encourage consumers to move from internal combustion engine vehicles to electric vehicles.

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