Oregon’s manufacturing industry is both energy intensive and trade exposed. No single sector of Oregon’s economy would be harmed more by cap and trade than manufacturers. While many manufacturers would fall below the initial 25,000 metric to cap currently being considered by lawmakers, the cap itself is not the only significant threat to manufacturers. The increased energy costs, especially natural gas costs, that would come as a result of the program could force some businesses to abandon Oregon altogether.
Lawmakers have floated the idea of an “allowance” schedule as a way for business like manufacturing to have time to prepare to be regulated under cap and trade, but such a set up provides no protection for manufacturers in the long term. Without a full exemption for the industry, allowances simply provide most manufacturers with a timeline for closure or relocation.
Most manufacturers have already embraced the greenest, most energy-efficient forms of production. For many businesses, the technology to bring emissions under the cap or adapt to higher energy costs simply does not yet exist. Taxing manufacturers that are already doing all they can to control emissions will simply reduce the amount of capital on hand to make the energy-efficiency improvements they are already making and will continue to make in the future.