Carbon Pricing
The “carbon” in carbon pricing comes from the gas carbon dioxide. Carbon dioxide is one of several pollutants that make up greenhouse gas emissions. Greenhouse gas emissions from vehicles are one of the biggest contributors to climate change, which has negative impacts across Oregon.
Carbon pricing aims to reduce emissions from transportation through regulating the prices on vehicle fuels.
Regulations can influence fuel prices. Fuel prices can vary based on how much greenhouse gas emissions those fuels emit when they are used. Fuels that emit less greenhouse gas emissions become more affordable, while fuels that emit more emissions become more expensive.
Governments can apply carbon pricing through regulations in different ways. In Oregon, the Department of Environmental Quality runs the Climate Protection Program, which sets declining limits on emissions for fossil fuel providers.
Oregon DEQ also runs the Clean Fuels Program, which sets decreasing limits for lifecycle emissions from transportation fuels use statewide. The program has a marketplace for high-emission fuel providers to buy credits from low-emission fuel providers. This lowers the cost of low-emission fuel options.
Both programs incentivize replacing higher-emission fossil fuels with lower-emission fuels like biofuels, renewable natural gas, and electricity. These market-based regulations have varying impacts on fuel prices, which also encourages less driving.
Additionally, funding generated from the Climate Protection Program can be reinvested in travel options that produce less greenhouse gas emissions — like public transit, biking, walking and rolling — but other non-transportation carbon reducing investments also compete for those funds. Learn more about how the Climate Protection Program generates and distributes funding.
Carbon pricing: emissions reduction vision
By 2050, a successful carbon pricing program or regulations will ensure fossil fuel prices/fees will be higher while prices/fees for low-emission fuels will be cheaper.
Oregon will use funding generated from carbon pricing or regulations to provide more lower-emission transportation options.
How Oregon is doing
State government has made progress in carbon pricing and regulations. The Oregon Department of Environmental Quality is leading the effort with their Climate Protection Program and Clean Fuels Program extension; both were adopted in the last few years, and position Oregon as a national leader in carbon pricing.
Both programs aim to accelerate Oregon’s transition to lower-emission fuels by imposing costs based on a fuel’s greenhouse gas emissions. DEQ publishes annual reports on how the Clean Fuels Program influences fuel costs and reduces greenhouse gas emissions.
How Oregon can improve
State government needs to build on the strong progress of the Clean Fuels Program and the Climate Protection Program. They’ll need to support Oregonians who are more vulnerable to rising energy costs, like people and businesses who have no other option than to drive an older, less fuel efficient car.
State government can also work with industry partners to keep down the costs of lower-emission fuels by making them accessible for transit, delivery and long haul trucks across the state.