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Weekend Reading 2/26/16

Kristin

Funny-shaped districts aren’t the problem with American voting. Electing one representative per district (funny-shaped or otherwise) is the problem. We can solve it with multi-member districts that ensure minority views get represented and it doesn’t matter who draws then district lines. Yes, yes, and more yes.

The Brennan Center’s Democracy agenda: Voting rights, money in politics, and redistricting. (Lots to read—all of it good stuff.)

Wondering how much climate pollution you emit when you drive, bus, or fly? This great infographic shows you that carpooling in a regular gas car is more climate-efficient than driving alone in a Tesla.

Transit-oriented development (TOD), developing dense housing near rail stations, might create most of its benefits from the density, not the rail.

Could the high-stakes brinkmanship around nominating Scalia’s replacement on the Supreme Court bring both parties to the table to create sensible term limits for justices? One can always hope.

Maybe right and left disagree about whether we need more equality of outcomes, but can’t we all agree that we need more equality of opportunity in America?

Tarika

If you’re looking for something good to listen to, I highly recommend a recent episode of This American Life called My Damn Mind, which tells how a young student experiencing a mental health crisis drove himself to the hospital for help and wound up being shot in the chest by armed security guards in his hospital room. The episode was a collaboration with the New York Times; the paper investigated the rise of armed but improperly trained security in hospitals.

The coal industry continues to resist protecting miners from excessive dust inhalation despite the ongoing death toll. Although many think of black lung disease as antiquated or even eradicated, the reality is that the disease killed more than 10,000 miners between 1995 and 2004.  A joint study by NPR and the Center for Public Integrity found that black lung cases doubled between 2002 and 2012, and the number of people diagnosed with the worst stages of black lung quadrupled. By 2014, black lung cases had risen to levels not seen since the early 1970s. Why? Some coal companies are mining thin seams of coal and in the process they grind up a lot of the surrounding rock: quartz. Quartz contains silica, and breathing in small silica particles can lead to silicosis and lung cancer. Miners in some geologic regions are breathing in large amounts of silicates in addition to coal dust, and it’s causing more severe lung deterioration. The exposure to silicates could be lessened if coal companies would slow the speed of drilling equipment, but they choose not to do so even though coal production rates are triple what they were in the 1970s. In addition, coal companies self-report whether they are complying with federal rules and there is “widespread gaming of the system,” according to NPR and the Center for Public Integrity. The Mine Safety and Health Administration passed a new rule in 2014 to limit miners’ exposure to coal dust and silicates, the first time coal dust limits had been lowered in 45 years.  The new rules aim to cut sampling loopholes and reduce coal dust exposure limits by 25 percent. The agency wanted to cut exposure limits by half, but the rule received strong opposition from the coal industry, which labeled it costly and unnecessary. Speaking of costs, the federal government has helped the coal industry pay $45 billion in benefits related to black lung since 1970.

Keiko

Adding on to Tarika’s podcast recommendation, which I highly suggest as well, here’s a must-watch seven minute video about gun violence in the United States. Vox explains how America doesn’t have more crime than other countries, “it’s that crime in the US is much more lethal.” The number of gun deaths from 2000 to 2013 exceed the number of Americans killed by AIDS, illegal drug overdoses, the Iraq and Afghanistan wars, and terrorism combined. The bottom line—more guns = more deaths; currently there are 300 million guns in the US and counting.

More videos! Start off your weekend right by watching 106-year-old Virginia McLaurin dance with the Obamas. She’s got some serious moves.

Dan

I once asked sustainability guru Paul Hawkin what he thought of The Long Emergency, James Howard Kunstler’s ruthlessly sobering prediction of what running out of oil would look like in North America. Hawken couldn’t hide his disdain for what he felt was the underlying premise of the book, namely, that “people are punks” (and not in the cool, Sex Pistols sense of the word).  What he meant is that Kunstler’s doomsday scenarios rested on the assumption that human nature will fail in the face of our imminent transformational crises.

In 2010, Kunstler told me over a drink that the project of the American suburbs is the greatest misallocation of resources in the history of the world. Fair enough. But he also went on about how within five years, the airline industry would fall apart and only elites would fly. Kunstler’s larger-than-life cynical persona—succinctly captured by the name of his blog, Clusterf*** Nation—is not for everyone. Yet there is no denying that his 1993 Geography of Nowhere is an all time classic in the city builder canon.

And wait, what? Kunstler also writes novels? Yes, and I was as skeptical as anyone, but there it was, a copy of World Made By Hand staring back at me from the used bookstore shelf. Once upon a time I fancied the idea of being a novelist and devoured writer’s writing (David Foster Wallace, etc.) but I’ve since lost patience for virtuosity, and can’t get through a novel unless it grabs my heart in some way. And Kunstler’s book did.

World Made By Hand tells the story of a Long Emergency-era summer in a small town in upstate New York. Sure, it’s a bit rough around the edges, but Kunstler created characters I could care about and a plot with seductive arcs. Not to mention that for anyone who has noticed all the ways in which western culture has dangerously overextended itself, there’s something irresistible about a downfall scenario brought to life in prose.

And no, this isn’t a story of punks—think more Little House on the Prairie than Mad Max. Nor does Kunstler oversell the charms of the simple life. In short, it’s a smaller but harder world that brings out the human in people for better or for worse.

A Good Way to Make Housing Scarcer and More Expensive

If you want to kill off a small-scale housing type, require “design review”—an official process for which developers must submit their building plans for review and public comment. That’s the main lesson of the five years of lowrise development in Cascadia’s largest city, Seattle, since it overhauled its regulations concerning multifamily neighborhoods in 2011.

That overhaul was intended by its proponents as tonic for better designed townhouses and rowhouses, and in many ways it succeeded. But it also precipitated a critical failure by suppressing the number—and raising the price—of new dwellings available for sale. More generally, Seattle’s 2011 multifamily regulation is a case study of the unintended consequences of innocuous-seeming housing rules.

Seattle’s lowrise profile

Seattle’s lowrise zones constitute 10 percent of the city’s land that is zoned for housing. Although the capacity for new housing in lowrise zones is small compared to the city’s higher-density zones, lowrise housing fills an important niche known as the “missing middle,” made up of duplexes, triplexes, rowhouses, and small apartment buildings: “missing,” because many growing cities such as Seattle offer little of it, and “middle,” because the square footage of housing per acre exceeds that in a single-family neighborhood but falls short of that in typical apartment zones. Missing middle housing offers an affordable entry to home ownership for young families and can also be a good fit for older people downsizing.

Ballard fourpack , by Dan Bertolet, used with permission.

Townhouse four-pack in Seattle’s Ballard neighborhood by Dan Bertolet (Used with permission.)

From the late 1980s until 2011, townhouse development ruled Seattle’s lowrise realms. The most common configuration, four duplex units looming over a shared driveway, became unaffectionately known as the “four-pack.” Widespread dissatisfaction with the four-pack and the desire for a greater variety of lowrise housing types catalyzed Seattle’s 2011 multifamily code update. Construction statistics since 2011 for lowrise housing show that more than half of lowrise dwellings built for sale during the period were clusters of single-family homes. Rowhouses made up 30 percent and townhouses just 15 percent of new, for-sale dwellings.

For-sale Lowrise Housing Built Since 2011
Project Type Number of Projects % of Total Design Review Req?
Single-family Cluster 393 52% No
Rowhouse 229 30% No
Townhouse 117 15% Yes
Garden Courtyard 9 1.2% Yes
Terrace Courtyard 11 1.4% Yes

These figures reflect a sea change after the 2011 updates to the lowrise code: builders largely abandoned four-packs and most other kinds of townhouses in favor of single-family clusters and rowhouses. Most four-packs were ugly, it’s true, but the city threw out the baby with the bath water. Townhouses often yield more housing than any other type of lowrise housing that is available for sale rather than rental. More units typically means more money for developers, so you’d expect them to keep building townhouses. The main reason they stopped? The 2011 code says that townhouses must undergo what’s called “Streamlined Design Review,” an extended project review period during which neighbors are invited to submit written comments and city planning staff assess compliance with approved design guidelines.

The devil is in the Design Review

To the casual observer, design review probably seems like no big deal—after all, it’s just a requirement to pause briefly for design appraisal before breaking ground. But for builders, time is everything, and Streamlined Design Review can add several months to a typical townhouse project, along with a big serving of uncertainty over potential design changes that may be demanded. The housing market is impossible to predict more than 18 months out. In response, builders and their investors routinely opt for faster and more predictable timelines, even if doing so reduces their potential returns.

Instead of townhouses, builders opted for something that’s almost the same but remains exempt from design review. Over the same five years, construction of single-family (SF) clusters leapt from negligible to the head of the lowrise field. SF clusters are like four-packs, but you substitute small freestanding houses for the common-wall units in a townhouse development. Of all the lowrise types, SF clusters yield the fewest—and most expensive—homes per acre. Although each SF house commands a higher price than would a common-wall unit on the same site, SF clusters’ reduced number of units yields diminished profits for developers.

Single Family Cluster Project, by Windermere Real Estate, used with permission.

Single-family cluster project by Hao Dang, Windermere Real Estate (Used with permission.)

On the positive side, the 2011 code changes jumpstarted rowhouses. In a rowhouse, each home owns the land from the street face to the back of the lot—that is, unlike townhouses, they cannot be arranged with one building behind another, a constraint that limits the lot configurations that are feasible. The 2011 code loosened setback, depth, and width requirements that had previously rendered the rowhouse building type essentially impossible. But the new regulations did not impose design review on rowhouses.

EastlakeRowhouses, by b9 Architects, used with permission.

Eastlake Rowhouses, b9 Architects by William Wright Photography (Used with permission.)

Despite the inherent limitations of positioning all units in a row at the sidewalk regardless of site topography and configuration, the exemption from design review still pushed rowhouse construction to twice the pace of townhouse construction over the past five years. That’s good news, because rowhouses can often yield as many new for-sale dwellings as townhouses, but they create a more appealing pedestrian environment with their street-facing entries and stoops, as opposed to the alienating, cavernous paved “auto-court” at the center of a typical four-pack. One downside, however, is that at the back of rowhouses, driveways and garages often take over area that would ideally be greenspace.

Indeed, the need to accommodate parking is the Achilles heel of all of the lowrise types. About half of Seattle’s residential blocks have alleys. For sites without alleys, the typical design solution dedicates significant interior site area to an auto-court, which has been the chief complaint against townhouses.

In contrast, for sites adjacent to an alley, parking can be conveniently located along it, leaving more space for people in a central “pedestrian court.” A little more than half of the 117 townhouse projects built since 2011 have pedestrian courts. Some builders have attempted to maximize these courtyards by consolidating units to create larger common open spaces—informally categorized as “Garden Courtyards” in the table above.

Another innovative approach to overcoming the challenge of parking is known as a “Terrace Courtyard.” This new design—unique to Seattle—covers the central driveways and parking area with a courtyard lid, transforming the center of the site from an automobile zone to useful open space for the residents. The Terrace Courtyard was made possible by the added design flexibility that came with the 2011 code update, and was recently recognized by the Puget Sound Regional Council with a Vision 2040 award. (Full disclosure: one of us, David Neiman, has designed most of the Terrace Courtyard townhouses in Seattle.)

Although townhouses with pedestrian courts address the major quarrels most people have with four-packs, their rarity is the collateral damage of the blanket Streamlined Design Review requirement for all townhouse projects. Garden Courtyards and Terrace Courtyards are particularly unfortunate casualties, since these projects involve additional custom design effort, yet they still get dinged with design review—punishment for innovation.

Three Takeaways, Two Solutions, One Cautionary Tale

Five years’ data make clear three things: First, Seattle’s 2011 multifamily code update boosted rowhouses but decimated townhouses. Second, requiring design review quashed the auto-court four-pack but spawned something worse in its place—the auto-court single-family cluster offers the unappealing site layout of what it replaced plus less housing and higher prices. Third, design review obliterated not only its auto-court, four-pack target but all forms of townhouses, including ones that would otherwise be expanding Seattle’s housing stock without propagating ugliness.

Seattle’s low-rise story is a cautionary tale of the sensitive relationship between housing affordability and regulations.
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The solution to this triumvirate of unintended consequences has two prongs. The first is simple: stop requiring design review for townhouses. Assuming that without the design review mandate developers would have built mostly townhouses rather than SF clusters, as they did before 2011, Seattle would currently have as many as 400 additional homes available for ownership, if it had never imposed design review on townhouses.

The second prong of the solution is to create incentives for courtyard townhouse designs. The city could, for example, allow extra floor area per lot to builders who choose Garden or Terrace Courtyard designs and provide shared open spaces equal to 15 percent of the lot area in their townhouse projects. Some may quibble that encouraging a parking structure runs counter to other Cascadian goals and that a better solution is to eliminate off-street parking requirements. We favor eliminating parking requirements. But even if parking is not required, most builders of ownership housing will still provide it, because buyers want it.

Seattle’s low-rise story is a cautionary tale of the sensitive relationship between housing affordability and regulations. The idea of design review (especially if “streamlined”!) sounds reasonable. Who would have suspected that it could swing the whole lowrise housing stock toward SF clusters and rowhouses?

And the same principles apply to larger housing projects that are subject to Seattle’s full-blown design review process. There is no getting around the fact that while design review may improve the appearance and integration of new buildings, the added delay and uncertainty inevitably lead to less housing and higher prices.

Seattle’s 2015 Housing Affordability and Livability Agenda (HALA) report recognized the connections between design review and affordability, and it recommended reforms to “improve predictability and consistency.” In response, the City of Seattle recently embarked on a project to “revamp and refresh” its Design Review Program.

Of course, design review is but one hurdle in the regulatory gauntlet for housing that developers must run. But all the hurdles add up, and municipal planners are known for having trouble finding the eraser end of their pencils. To be clear, tackling affordability doesn’t mean abandoning all regulations. But it does call for far more diligence in assessing the tradeoffs.

Want to learn more about Seattle's HALA plan? Click here.

Event: Pacific Northwest Pledge of Resistance

This Saturday, hundreds of Seattle area residents will gather to formally voice their opposition to a raft of oil, coal, and gas exports out of our Cascadian region. They will also learn more about opportunities to get involved in the work of what has been dubbed the Thin Green Line. Eric de Place will keynote the event, hosted by 350 Seattle.

What: Pacific Northwest Pledge of Resistance: Teach-In

Where: Seattle City Hall, 600 4th Ave, Seattle, WA 98104 (map)

When: Saturday, February 27th, 1:45 – 3:00 PM

Who:

  • Eric de Place, Sightline policy director, event keynote speaker
  • Mike O’Brien, Seattle City Councilmember
  • Sarra Tekola, Women of Color Speak Out, Got Green?
  • Patrick Mazza, Delta 5 Member

RSVP: This event is free and open to the public.

Learn more and RSVP

Weekend Reading 2/19/16

Eric

KUOW’s Liz Jones has a wonderful new piece out, “I Keep Telling My Mom I’m Gay – And She Keeps Forgetting.” It’s a poignant story by any measure, but I suppose particularly so for me because both Liz and her subject, Ben Nakamura, are old friends of mine.

What type of exercise is best for the brain? New research on rats suggest that the answer is long distance running and similar activities.

On February 27, I’ll be at Seattle’s city hall talking with activists (and many others) about “the pledge of resistance” to oppose fossil fuel development in the Northwest. I’ll be keynoting the event, but I’ll be joined by some leading lights in the movement, including Seattle City Councilmember Mike O’Brien and Delta 5 defendant Patrick Mazza.

Keiko

In the words of Zoolander, City Observatory is so hot right now. Everything about it—from the visually appealing website design, to the on-point and concise articles—makes me swoon. On the site this week is an article about how a decline in gas prices = more driving = more deaths, and another article comparing new cars to high-priced apartments: they’re both sold to higher income households allowing “used” homes and cars to become affordable after they’ve depreciated. In sum, building high end housing doesn’t make housing less affordable.

Event: Tacoma’s Proposed Methanol Plant

Following coal exports and oil trains, fracked fuel and petrochemicals are an unexamined third wave in Northwest fossil fuel projects. Notable among the Northwest projects is a controversial proposal to build the world’s largest methanol plant in Tacoma.

Next Thursday, Eric de Place will join Robert Mack of Tacoma Public Utilities and Dan Kirchner of Northwest Gas Association to speak about the potential water and power impacts of the proposed methanol production plant. This presentation will focus on providing scientific answers to questions raised by the community. These are not public hearings, and there will be no live audience participation, but you can send in questions by emailing Ryan Cruz.

  • What: Exploring the Science Underlying the Proposed Methanol Production Plant
  • When: Thursday, February 25, 6:00 – 7:30 PM
  • Where: University of Washington Tacoma, Carwein Auditorium (map)
  • Tickets: The event is free and open to the public. Registration is closed. Please add your name to the wait list. (There will also be a video available here after the event.)

Want to learn more? Check out our three-minute introduction to methanol here.

New Report: Fracked Fuel and Petrochemical Proposals in the Northwest

Sightline is publishing a new report today: Fracked Fuel and Petrochemical Proposals in the Northwest. It provides the first regionwide inventory of a new class of projects under consideration. Although these proposals encompass an array of fuels and technologies, they share core features: they are possible in large part because of new oil and gas extraction techniques, especially fracking, and they either burn carbon-based fossil fuels or use them for manufacturing plastics and related products.

Although coal export and oil-by-rail have grown intensely controversial, analysts and the media have for the most part overlooked or left unexplored this further category of projects: fracked fuel and petrochemical schemes that would transform the Northwest into a major international shipping hub for fossil fuels and their byproducts. Eight proposals in Oregon and Washington would build new refineries, pipelines, and port facilities to export as much as 16.7 million metric tons of liquefied natural gas (LNG), 27.4 million barrels of propane-like gases, 14.5 million tons of methanol, and 5.5 million barrels of xylene each year.

Original Sightline Institute graphic, available under our free use policy.

Original Sightline Institute graphic, available under our free use policy.

Stretching from Coos Bay, Oregon, in the south to Washington’s Puget Sound in the north, the proposed fracked fuel and petrochemical projects pose a range of significant stresses to regional resources. They would consume large quantities of fresh water, create potentially serious safety risks to local communities, release various forms of toxic contaminants into the Northwest’s air and water, and increase the region’s carbon pollution load.

View the full report here and the related press release here.

 

Original Sightline Institute graphic, available under our free use policy.

Original Sightline Institute graphic, available under our free use policy.

 

Why Vancouver Trounces the Rest of Cascadia in Building ADUs

Editor’s note: This article is Sightline’s very first from our new senior researcher, Dan Bertolet. We’re thrilled to have him on board to help both continue and expand our work pursuing smart solutions to our region’s big questions on housing and urban growth. Read his full bio here, and follow him on Twitter at @danbertolet.

Cascadia’s three largest cities have all sworn themselves devotees of the accessory dwelling unit (ADU)—also known as the in-law apartment or backyard cottage. But only one of the three has actually built any more than a smattering of them. In Vancouver, BC, fully one-third of single-family houses have legal ADUs; in Portland and Seattle, scarcely one percent of houses sport a permitted secondary dwelling. This yawning gap reveals a big opportunity for addressing future housing needs in growing cities.

ADU infographic final with text and logo not permitted

The current state of Cascadia’s ADUs

ADUs are relatively modest apartments or cottages integrated into single-family properties, and they come in two flavors: physically attached to the main house (AADU), or detached in a structure separate from the single-family house on the same lot (DADU). Most fall in the moderate affordability range—$1,200 to $1,800 per month for a one-bedroom unit in Seattle—and offer a housing option in single-family neighborhoods for residents who cannot afford a single-family house.

Known as “granny flats” for a reason, ADUs work well for multigenerational families. And they are particularly well-suited for young children, because they tend to be relatively large (at least for a rental), provide direct access to outdoor yards, and are often located in neighborhoods well served with schools and parks.

The table below shows the current ADU and single-family home stats for Vancouver, Seattle, and Portland. Vancouver has a staggering lead in AADUs, with more than 21 times as many in-law apartments (called “secondary suites” in Canada) as Seattle and almost 44 times as many as Portland. The city also holds an ample lead in DADUs (“laneway houses,” in Vancouver’s parlance).

Vancouver

Seattle

Portland
AADUs

25,300

 1,184

580
DADUs

1,350

 212

720
Single-family Houses

75,000

 134,000

153,000

What’s holding back Cascadia’s ADUs

Myriad regulatory barriers currently litter the law books of Cascadian cities, clogging the ADU pipeline. Vancouver’s success in building more than 26,000 ADUs has been all about undoing those restrictions. Starting in the late 1980s, the city legalized thousands of existing, but illegal, ADUs. Over time, it eliminated the most counterproductive barriers. Vancouver, unlike many Cascadian cities:

  • does not require an off-street parking spot for each ADU,
  • does not require the owner to live on site,
  • allows single-family lots to host both an AADU and a DADU,
  • awards additional occupancy limits for each dwelling on a property, and
  • provides great latitude to property owners in terms of size, height, and placement of each ADU.

Vancouver demonstrates a substantial housing opportunity for other cities. Matching Vancouver’s ADU track record would mean 47,000 ADUs in Seattle and 54,000 ADUs in Portland. Unfortunately, recent rates of construction in these cities would not yield that much for several hundred years. To seize the ADU opportunity and match Vancouver, Portland and Seattle will also have to match Vancouver’s welcoming set of ordinances.

Seattle is poised for progress on ADU code improvements intended to unleash production through the recently introduced Housing Affordability and Livability Agenda (HALA). HALA calls for more ADUs and prescribes most of the regulatory improvements listed above. HALA also recommends establishing a “clemency program” to legalize undocumented ADUs, which amount to perhaps two or three times the permitted inventory. (The City of Seattle makes no attempt to count unpermitted ADUs).

Next to Vancouver, Portland is the most ADU-friendly city in Cascadia, mainly because the Rose City requires neither parking nor owner occupancy for ADUs. However, Portland only allows one ADU per property, imposes a low site occupancy limit (no more than 6 unrelated people), and requires 2-story DADUs to match the design of the main house. Compared to Seattle, in recent years Portland’s rate of DADU production has been relatively robust, thanks to the elimination of an $11,000 development fee and the parking requirements in 2010. (Though a recent procedural change in property tax appraisal methods may re-chill the market.)

Like what you're reading? More on in-law units and backyard cottages here.

Portland ADU, by Rainbow Valley Construction, used with permission.

Portland ADU by Rainbow Valley Construction (Used with permission.)

Where ADUs could take us

Vancouverites built most of the city’s 25,000 AADUs over several decades starting in the 1970s—often in defiance of prohibitive regulations in place during much of that period. DADUs are newer to the city (the program launched in 2009), but production has been steadily rising, with a record 531 units permitted in 2015.

Combined, the production rates observed in Vancouver for the two ADU types translate to something on the order of 1,000 homes per year. By comparison, Seattle has a goal of producing 20,000 affordable units over ten years, or 2,000 per year. The fact that both Seattle and Portland have roughly twice as many single-family houses as Vancouver to work with would suggest that both cities have the potential to surpass Vancouver’s ADU pace. And that’s enough new housing to take a serious bite out of the mushrooming unmet demand for moderately priced, family-friendly housing in these cities.

The reason Vancouver is currently so far ahead on ADUs stems from the presence of two synergistic ingredients: low regulatory barriers and a strong real estate market. Together, these help owners justify the cost of building ADUs. Seattle has been lagging because while it has the market, it also has the barriers. And Portland has been lagging because while most of the major barriers are gone, it has had a weaker real estate market until recently.

Given Portland’s strengthening market, an ongoing increase in ADU production can be expected, without any major code changes. In Seattle’s case, however, ramping up ADUs hinges on fixing the code. Fortunately the City of Seattle already has a plan, and the solution is straightforward: implement HALA’s recommendations.

 

Notes and methods: Vancouver data were obtained through a private communication (12/15/15) with staff at Planning and Development Services, who derived the AADU count from Census 2011: Statistics Canada. The DADU count is based on data collected by the City and includes only those with finalized permits as of 12/31/2015. 

The data source for the Seattle ADU inventory is here and includes ADUs with permits finalized between 1/1/95 and 10/2/15. The data source for the Seattle single-family house inventory is here. 

The total count of ADUs in Portland is based on a private communication (11/02/15) with staff from the Oregon Department of Environmental Quality. The estimated split of that total between AADUs and DADUs was derived by applying the percentages observed in this 2013 survey. The data source for the Portland single-family house inventory is here.

 

Why Oregon Needs the Healthy Climate Act

Author’s note: Originally, the pie charts in this article included industrial electricity and natural gas use under the industrial sector. I have since updated the emissions and estimated allowance value pie charts to instead categorize emissions (and resulting allowance value) from industrial use of electricity and natural gas under the electricity and natural gas sectors. 

In the short 2016 legislative session, Oregon lawmakers have a chance to pass the Healthy Climate Act, a bill that would enforce the climate pollution reduction goals Oregon legislators passed nearly a decade ago. By enforcing limits on pollution and “cashing in our carbon,” as we like to think of it, Oregon can seize the opportunity to transition off outdated fuels, build a thriving clean energy economy, and generate broadly shared prosperity and local jobs while protecting our families and safeguarding our climate.

A little background

Why does Oregon need to limit greenhouse gas pollution?

Pollution imposes major costs on Oregonians, from hospital expenses that lung diseases like asthma foist on families and the healthcare system to the losses in life and property that drought and wildfire inflict on farmers and communities. Burning fossil fuels spews pollutants that form a heat-trapping blanket in our atmosphere, warming the planet. A modest rise in global temperatures could lead to a 54 percent increase in area burned by wildfire in Western states by 2050. The pollution also seeps into our oceans, causing acidification—a sort of “osteoporosis of the sea”—that is already harming Oregon’s shellfish industry. If we don’t act now, climate pollution will cost Oregonians billions of dollars in healthcare outlays, vanished salmon and seafood, and recreation industry losses.

Where does Oregon’s greenhouse gas pollution come from?

Cars and trucks churn out the biggest chunk of Oregon’s climate pollution, followed by electricity and natural gas utilities and industrial facilities. Together, those sectors account for about 85 percent of Oregon’s emissions—around 52 million metric tons of carbon dioxide equivalent (MMT CO2e), out of a statewide total of 61 MMT.

Original Sightline Institute graphic, available under our free use policy.

Original Sightline Institute graphic, available under our free use policy.

So, what would the Healthy Climate Act do?

The Healthy Climate Act would put an enforceable cap on carbon pollution from the approximately 70 largest polluters in the transportation, electricity, natural gas, and industrial sectors. The state would enforce the cap by issuing a limited number of allowances—one allowance per ton of emissions allowed under the cap. Then, the state would cash in for us! Specifically, it would invest in our families and communities by funding road maintenance, electricity bill assistance for low-income households and small business, and climate-smart projects like efficiency and solar in the most disadvantaged and economically distressed communities. More detail on that in a bit.

1. It would enforce a cap and collect some dough.

Periodically, large businesses will have to verify to the state that they hold enough allowances to match their emissions. Each year, as the cap tightens, the state issues fewer allowances.

Most regulated businesses—fuel refiners, power plants, utilities, and large industrial facilities—will buy their allowances in a state-run auction. To prevent emissions and jobs from “leaking” out of Oregon, the state will give some allowances for free to factories that could be undercut by out-of-state competitors that still pollute for free (these entities are known as “energy-intensive, trade-exposed,” or “EITE,” for those who love jargon). Rather than continuing to emit the same amount and pay for the same amount of allowances each year, businesses will seek the lowest-cost ways of reducing pollution from their operations.

The hard cap requires slow and steady emissions reductions: 20 percent below 1990 levels by 2025, 45 percent by 2035, and 75 percent by 2050. The declining cap walks pollution down the stairs, gradually ushering the economy away from fossil fuels and towards clean energy.

2. It would incentivize clean energy investments and infrastructure in Oregon.

Without pollution limits, Oregon ratepayer dollars might flow to propping up old coal plants. A price on pollution would instead make new solar and wind facilities, energy efficiency investments, improved grid management, demand response, and electric vehicles more enticing to utility planners.

Similarly, without pollution limits and with low prices at the pump, Oregon cities, counties, and businesses might continue to support infrastructure for gas-powered cars. As the supply of allowances slowly decreases, though, the price of each allowance will rise, and Oregonians will invest in efficiency, clean energy, and climate-friendly transportation options.

In addition to diverting existing investments, an Oregon pollution price will also attract new investments from private, clean-tech, venture capitalists who see the state as a welcoming place. California has the strongest pollution price in the United States, and in 2014, it attracted the majority of all US clean-tech venture capital—$5.7 billion (up from $2 billion in 2005, the year before the California legislature passed the state’s climate action law, AB 32).

3. It would spend that carbon cash on a climate-smart future.

Fuel refineries, power plants, and factories would all pay for an allowance for every ton they emit. Assuming the auction price for allowances in 2020—the first year of the Oregon program—is $18 (a bit higher than the current Western Climate Initiative auction price of $13 per ton), Oregon’s 51 million allowances would be worth around $900 million in 2020.

The Department of Environmental Quality (DEQ) still needs to do more analysis to calculate exact numbers. For example, DEQ must identify how much assistance industrial facilities need to prevent them from moving out of state, but the bill assigns the allowance value roughly as follows:

Original Sightline Institute graphic, available under our free use policy.

Original Sightline Institute graphic, available under our free use policy.

  • More than $400 million in revenue from allowances auctioned to the transportation sector will be deposited into the Climate Investments subaccount in the State Highway Trust Fund, to be invested in projects that help reduce climate emissions (local road maintenance can cut pollution). At least 20 percent of this money must be used for projects that are geographically located in disadvantaged communities and an additional 20 percent for projects that benefit those communities.
  • Around $60 million in revenue from auctioned allowances will be deposited in the Oregon Climate Investments Fund to be invested in projects that contribute to the reduction of greenhouse gas pollution and the transition to a clean-energy economy. At least 40 percent of the money must be invested in projects that are geographically located in disadvantaged communities, and at least 40 percent must be invested in projects geographically located in economically distressed areas, particularly for job training.
  • Around $10 million in revenue from auctioned allowances will be deposited in a Just Transition Fund to provide job training and other benefits to workers who are adversely affected by climate change or climate policies.
  • Assuming utilities receive 90 percent of their allowances, around $380 million worth of allowances will be given to electricity and natural gas utilities, with the requirement that the utilities sell the allowances back into the state auction and use the revenue to help their customers—especially low-income households and small businesses—through bill assistance and climate credits. Climate credits would be like a tiny dividend—a flat amount that each household would receive on its bill a few times a year. Because low-income households tend to spend less on energy than higher-income households, but they would both get the same climate credit, the credit is progressive.
  • Assuming industrial facilities need, on average, 35 percent of their allowances for free to ensure they remain competitive with out-of-state competitors that are not paying a pollution price, around $20 million worth of allowances might be given to Oregon industries that are both energy-intensive and trade-exposed.
  • Around $10 million from auctioned allowances will be used to create a reserve of allowances to prevent price volatility and to provide funds to encourage voluntary investments in renewable energy.

Okay, but how much will this cost Oregon?

By holding polluters accountable, Oregon would not spend any more money than it does now; it would just spend the money on investments—low-cost clean energy, job training, assistance for low-income families and communities, road maintenance—that are more valuable and more productive than fossil fuels. Nothing against 20th-century fossil fuels (they got our civilization to where it is today, and we are grateful), but it’s the 21st century, and there are better options.

Oregonians will continue to pay for energy one way or the other, but the Beaver State has a choice about where its energy dollars should go. The money Oregonians currently spend on out-of-state fossil fuels could instead go toward clean energy, more local jobs, and improved public health. At last count, Oregonians already spend twice as much of their hard-earned money on fossil fuels as they do on K-12 education.

In short, consider the options. Oregonians can:

  1. Continue to pay directly for out-of-state fossil fuels and also pay indirectly for the hospital bills, firefighters, lost fishing jobs, and lost snowpack that pollution causes, or
  2. Exchange slightly higher prices for polluting fuels like oil and coal for local investments that are better for Oregon’s families and communities. We hold the biggest polluters accountable, we keep more energy dollars in the state, and we transition to abundant, local, clean resources that create more local jobs, fund better maintained roads, and deliver higher quality of life.

Oregon buys most of its coal and oil from out of state. Boardman, the only in-state coal plant, is shutting down in 2020, and Oregon has no oil refineries. So every time an Oregonian buys a gallon of gas, an out-of-state oil company profits.

Meanwhile, each dollar invested in clean energy creates two to seven times as many jobs as spending that dollar on fossil fuels, and what’s more, Oregon reaps a double-benefit from transitioning to more efficient buildings powered by solar delivered over a smart grid because clean energy jobs are more likely to be local. By shifting to low-cost cleaner resources, Oregon keeps more hard-earned dollars at home creating local jobs.

Original Sightline Institute graphic, available under our free use policy.

Original Sightline Institute graphic, available under our free use policy.

Portland State University’s modeling shows that charging a price for pollution and re-investing the revenue in Oregon will create jobs and increase wages across the state. So making fossil fuel prices honestly reflect their full costs won’t damage the economy; it will be good for Oregon.

Is this really a good idea? Who says?

Ten American states and three Canadian provinces have already been holding polluters accountable with similar pricing systems for years, and two more provinces will soon join them. Pollution pricing programs have helped states and provinces not only de-board from the fossil fuel rollercoaster, but also attract clean energy investments, create local jobs and benefits, and grow their economies. For example, the nine northeast “RGGI” states spent most of their allowance revenue on energy efficiency, creating 16,000 jobs in the program’s first few years.

In 2015, 39 countries and 23 cities, states, and provinces were already using pricing mechanisms to limit greenhouse gas pollution. And by the end of 2016, nearly one-quarter of all climate pollution in the world will have a price tag attached. That’s a club we want to join. The Oregon Healthy Climate Act helps us get there.

Original Sightline Institute graphic, available under our free use policy.

Original Sightline Institute graphic, available under our free use policy.

Weekend Reading 2/12/16

Anna

Polls are wielding greater influence over American elections than ever.
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One appeal for voters (albeit different voters) that Donald Trump and Bernie Sanders seem to share is that they don’t (or claim not to) have pollsters. The idea is: You get what you get (or in Trump’s case, “No one tells me what to say”). The idea is that poll numbers aren’t going to sway their positions or change how they talk. It’s refreshing, especially considering Jill Lepore’s look in the New Yorker at both the prevalence and power of political polling—especially the horse-race style game of predicting winners and losers—and its deep flaws (plus, a fascinating history of political polling in the US). Get this: “From the late nineteen-nineties to 2012, twelve hundred polling organizations conducted nearly thirty-seven thousand polls by making more than three billion phone calls. Most Americans refused to speak to them. This skewed results.” Another big problem: Scholars of social science “have demonstrated again and again, a sizable number of people polled either know nothing about the matters those polls purport to measure or hold no opinion about them.”

And, today, while response rates fall (single digits are now typical), and failure of polls to reliably forecast outcomes is on the rise, polls are wielding greater influence over American elections than ever. (Polling numbers have determined, for example, who’s been invited to participate in certain GOP presidential debates.)

Lepore poses critical questions: Can public opinion really be measured? Is polling actually good for democracy or does it undermine it? Is polling an important check on political decisions, giving voice—and power—to regular people? Or does it shape opinion, taking power away? One answer comes from an insider: Gallup Poll’s former managing editor David Moore, said that “media polls give us distorted readings of the electoral climate, manufacture a false public consensus on policy issues, and in the process undermine American democracy.” On the flip side, another scholar insists that quality (academic) sample surveys are “rigorously egalitarian,” achieving “representativeness through science.”

The jury is still out (and code still to be written) deciding whether innovations in data-science could more accurately measure and report on public views in a way that improved the chances for democratic decision-making, or at least gave candidates and electeds real-time cues and accountability.

And…admittedly a little weird hot on the heels of all that about polling, but here’s one for you: Pew finds that a substantial majority of Americans—65 percent—say the economic system in this country “unfairly favors powerful interests.” Fewer than half as many (31 percent) say the system “is generally fair to most Americans.” Guess who is most likely to think it’s fair? The highest income Republicans.

The candidate on the Republican side who spent the most money on TV ads by far in Iowa, lagged in the polls and wound up with 3 percent of the vote. If TV ads—a giant share of campaign budgets—don’t work the way they used to, as some are beginning to speculate, I can’t help but wonder what that means for campaign spending and the influence of money in politics.

Finally, the author of the book I’ve been carrying around with me (and reading, very, very slowly—hey, I’m busy!) in hopes of summarizing the key takeaways for a Flashcard, has summarized his key takeaways. Yay! Here’s Per Espen Stoknes, psychologist and author of What We Think About (When We Try Not To Think About) Global Warming (via Grist), with Seven Smarter Ways to Talk About Climate Change.

Keiko

This is sickening and outrageous. A cop shot and killed 12-year-old Tamir Rice more than two years ago. Now the city of Cleveland wants his family to pay for the ambulance ride and medical services that he received before he died. Oh the immense injustice…

On a brighter note, how does Bernie Sanders celebrate his New Hampshire victory? He tore it up on the b-ball court, of course.

Peabody Energy’s Financial Death Spiral

At this point, we should be accustomed to hearing bad news from the coal industry. What else but bad news can you expect from a sector that’s seen nearly 50 bankruptcies since 2012?

But today’s announcements by Peabody Energy, the world’s largest private-sector coal company, really pushed bad news to new limits. Peabody revealed that it had maxed out its credit lines, just prior to disclosing a $2 billion accounting loss for 2015. This one-two punch sent Peabody’s shares reeling, with stock prices falling by nearly a third during the day’s trading to a new, all-time low.

Still, the worst is yet to come for Peabody.

As detailed in a new report, coauthored by the Institute for Energy Economics and Financial Analysis and Sightline Institute, Peabody’s financial survival strategies are backfiring. The company is selling mines and other assets at a loss—raising cash in the short term, while undermining its balance sheet and trimming future revenues. Meanwhile, Peabody’s attempts to restructure corporate debt are based on unrealistically optimistic assumptions about future coal prices. And even if successful, a debt exchange won’t have much benefit for the company’s long-term finances, but will jeopardize the company’s ability to fulfill its mine cleanup obligations.

The only path forward for the US #coal industry is to recognize that the demand for coal is shrinking.
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At best, the report concludes, Peabody’s financial maneuverings will keep unneeded coal mines open—contributing to the oversupply that has been sinking coal prices. At worst, they’ll push the company closer to insolvency, magnifying the risks that bankruptcy poses to workers and the environment.

At this point, the only path forward for the US coal industry is to recognize that the demand for coal is shrinking and that the key task facing Peabody is to figure out how to shrink gracefully. But Peabody’s financial maneuverings show that the company—and its entire industry—are still deep in denial, still flailing… and still gambling on a rebound.

Seems like King Coal is in dire need of some grief counseling, no?