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Oregon is set to become the second state to take on climate change with an economy-wide cap-and-trade system. But critics say the model that it's based on, California's, has not worked very well. Here's Cassandra Profita of Oregon Public Broadcasting and NPR's energy and environment team.
CASSANDRA PROFITA, BYLINE: Like California, Oregon's plan would set a cap on greenhouse gas emissions that would come down over time. It would also create a market for companies to buy and trade a limited number of pollution permits. The bill's so contentious, both industry and environmental groups are running ads against it.
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UNIDENTIFIED PERSON #1: Cap-and-trade will drive up energy costs for family farms, more expensive electricity, gas, diesel.
UNIDENTIFIED PERSON #2: Market-based mechanisms like cap-and-trade don't work because they were designed by oil, gas and dirty energy companies.
UNIDENTIFIED PERSON #3: Lawmakers have spent years debating how to design a cap-and-trade system that balances the risks of hurting the economy with the benefits of reducing emissions.
KARIN POWER: You know, that is the problem with trying to fight climate change.
PROFITA: Oregon Representative Karin Power is a co-author of the bill. She says higher prices for fossil fuels under cap-and-trade will help steer the economy toward cleaner energy. The bill would invest money from selling pollution permits into energy conservation and renewables, like solar and wind.
POWER: Science has told us we have a very short window to really start to transition the way that we have generated energy writ large.
PROFITA: Oregon has the benefit of learning from California, but that's where things get complicated.
SEVERIN BORENSTEIN: I definitely think Oregon should be doing something different than California has done.
PROFITA: Severin Borenstein is an energy market expert at the University of California, Berkeley. He says back before the 2008 recession, California set its emissions cap too high, thinking the economy would grow faster than it did. That's created a problem where there's more than enough pollution permits to go around, so it's cheap and easy for companies to stay under the cap without reducing emissions.
BORENSTEIN: Right now, if you ask what is the current cap-and-trade market doing to reduce carbon emissions, I think the answer is not very much.
PROFITA: Another cap-and-trade critic is Khanh Pham with the Oregon environmental justice group OPAL. She says emissions from some oil refineries have increased under California's program.
KHANH PHAM: It's really pay-to-pollute, and we need to stop polluters from polluting. It's had a disproportionate impact on low-income communities and communities of color.
PROFITA: Pham also points to new research that finds California may have counted up to 80 million tons of carbon dioxide reductions that didn't actually happen. Oregon Governor Kate Brown says state regulators plan to have tighter controls to prevent those kinds of miscalculations.
KATE BROWN: We're really working on creating a unique approach to Oregon that will prevent gaming of the system.
PROFITA: Oregon's bill is 10 times longer and far more detailed than what California passed in 2006, and it set some pollution permits aside as a cushion so the state can shift course if needed. Brown says it could be the national model.
BROWN: Oregon is a small state. And if we can do it, that means states like Minnesota and Connecticut and Kansas can do this, and do this in a way that will ensure their economies thrive and make sure that we're reducing greenhouse gas emissions.
PROFITA: That is, some say, if Oregon's cap-and-trade plan works better than California's. For NPR News, I'm Cassandra Profita in Portland. Transcript provided by NPR, Copyright NPR.