Oregon governor orders emissions cap after ETS bill fails again

After an ETS bill again failed to pass the Oregon legislature, Governor Kate Brown issued an executive order directing state regulators to develop a program setting a declining cap on the emissions sources that would have been covered by the proposed legislation.

Executive Order 20-04, signed on 10 March 2020, directs the state Environmental Quality Commission (EQC) and Department of Environmental Quality (DEQ) to establish a sector-specific “Cap and Reduce Program” for large stationary sources of emissions, transportation fuels, and other fossil fuels, including natural gas. This would follow the sectoral coverage of Senate Bill 1530 (SB-1530), which would apply to the industry, power, and transport sectors. That bill, which originally appeared as LC-19 before the start of the 2020 legislative session, failed to pass during the legislative session after Republican lawmakers refused to form a quorum. An inability to reach a quorum also contributed to the failure of House Bill 2020 (HB-2020) in 2019.  

SB-1530 resembled HB-2020 but with changes that would reduce the number of industrial emitters covered by the system and gradually phase in transport fuels, starting with urban areas.  

The executive order provides little detail on the potential design of the program. It would require a cap and emissions reductions for the covered sources that is consistent with the targets set out in previous legislation (45% below 1990 levels by 2035 and 80% by 2050), but it makes no reference to trading or whether the program would more resemble a baseline-and-credit system than an ETS. DEQ is required to submit a preliminary report by 15 May 2020 outlining a timeline for rulemaking and options on program design, with a final report by 30 June 2020. Like SB-1530, the program under the executive order would start in 2022.

The executive order also mandates stricter fuel and energy-efficiency standards.

State legislatures in the US often meet only once a year for a set number of weeks, but governors often have the authority to call a special session. Brown has not confirmed whether she will call a special session of the legislature this year or whether Democrats would attempt to pass an ETS bill during a special session.