City of Portland Clean Air, Healthy Climate Proposal Frequently Asked Questions
What is the goal of this program?
The goal is to reduce pollution in Portland to improve the health of our residents and reduce the risks to our economy from climate change and the high costs of pollution. Entities covered by this proposal will have the option to reduce pollution on site and pay less, or pay the fees that will enable the City of Portland to scale up programs to reduce climate and air pollution directly.
These goals will be achieved through communitywide investments in projects and programs that reduce greenhouse gas emissions from homes, apartments, commercial buildings, and the transportation sector. The revenue will also be invested in increasing community resilience to the impacts of climate change and support community engagement and capacity building for community organizations to engage with the City in developing climate actions. In addition, the revenue from the Clean Air Protection Fee will be used to improve the health and wellbeing of Portlanders most at risk from exposure to air pollution and addressing environmental justice.
Companies can reduce their fees by reducing emissions from their facilities. This can be achieved thorough any number of means, including transitioning to renewable energy, industrial process and energy efficiency investments, changing materials to non-toxic sources and/or air pollution controls.
How much money will this raise and what will it support?
The proposal is intended to raise approximately $11 million per year as dedicated and ongoing funding for Portland to take more aggressive steps to reduce greenhouse gas emissions and the most harmful impacts of air pollution. The goal is to achieve both the City’s 2030 greenhouse gas reduction goals and beyond, as well as the State’s health-based air pollution benchmarks within Portland. The revenue will fund projects and programs to achieve Portland’s plans for Climate Action. The revenue will support the City’s work to improve the health and wellbeing of Portlanders most at risk from the impacts of climate change and air pollution. Outcomes from the investment of these funds include:
Reduced greenhouse gas emissions from transportation, buildings, and energy systems and improved livability and quality of life for all Portlanders, especially Black, Indigenous, and communities of color.
Increased community health and resilience.
Reduced air pollution and improvement in public health, especially for Black, Indigenous, and communities of color, and low-income residents, who are often the most vulnerable to air pollution impacts.
Community organizations supported to engage with the City of Portland on climate and air quality action in a sustained and ongoing way.
How off track is Portland from meeting its carbon reduction and air quality targets? How will this program help?
Portland’s Climate Emergency Declaration set a goal to reduce local carbon emissions by at least 50% below 1990 levels by 2030. Emissions are currently 19% below 1990 levels. The direction established in the Climate Emergency Declaration called for “greater action, resources, and collaboration that prioritizes frontline communities to restore a safe climate.” To achieve the adopted target, the City of Portland needs to step up and accelerate the actions to reduce emissions across sectors in ways that prioritize benefits for frontline communities.
In addition, while the City has been addressing air quality through programs like the Clean Air Construction Program and Smart City PDX, there has never been dedicated funding or staff resources to support comprehensive air quality work. Portlanders breathe the dirtiest air in the state and face the highest risk of pollution-related cancer. For Portland to take steps to protect health and reduce air pollution to achieve the State’s adopted health-based air pollution benchmarks, the City needs dedicated and ongoing resources.
How is this different from the Portland Clean Energy Fund (PCEF)?
Yes, the voters approved the Portland Clean Energy Community Benefits Fund in 2018. However, those dollars are not available to the City of Portland to implement the various City of Portland policies, and programs required to achieve our greenhouse gas reduction goals or improve air quality. PCEF dollars are explicitly for community organizations to advance projects that meet community priorities and support Portland’s transition to a clean energy future. Notably, the companies required to pay for their pollution emissions are different than the companies that pay the Clean Energy Surcharge.
The revenue generated by this policy proposal will complement and support the goals of the PCEF program, by allowing the City to implement the City’s share of work outlined in multiple policies adopted by Portland City Council, including the 2015 Climate Action Plan, the 100% Renewable Energy Resolution (2017), and the Climate Emergency Declaration (2020).
What will be the impact of this program on covered entities?
The proposed fees will be collected beginning in spring 2022, which should provide enough time for businesses to plan and prepare for this cost of doing business. Furthermore, approximately half (49%) of the companies impacted (40 companies) would pay $25,000 or less a year. This proposal is not a carbon tax, but a fee on pollution levels. The fee is not set at a level meant to internalize the social costs of carbon imposed on the community (which is closer to $117/per ton or more). The healthy climate fee is proposed at $25/per ton.
The City recognizes that this proposal adds cost for covered entities. Most business leaders agree that we are facing a climate crisis and in June 2020, the City Council passed a climate emergency declaration that called for faster and bolder actions to address this crisis and that action in the next 10 years is critical for our future. And that the longer we wait, the more costly it will be to act on climate. Additionally, investing in the transition to a clean economy will create good paying jobs and strengthens our local economy. Many of those jobs are in the construction and manufacturing services sectors.
What entities are covered by this proposal?
The proposed Clean Air and Healthy Climate fees recognize that the largest pollution emitters in Portland should shoulder some of the societal costs to reduce carbon and air pollution that harms so many Portlanders. The covered entities in this proposal are the largest emitters of site-based emissions located within Portland city limits who currently register with the Oregon Department of Environmental Quality for their greenhouse gas emissions and/or have an air contaminant discharge permit. For 2019, this is a total of 81 facilities:
The proposal narrowly targets those entities that have the greatest environmental and health impact on our city. This proposal does not cover small businesses, such as restaurants or mom-and-pop operations. Entities can reduce the cost impact by reducing their pollution levels since the cost is commensurate with pollution levels.
Which entities are impacted the most by this proposal? What is the average fee that covered entities will have to pay?
The covered entities, based on 2019 publicly available data, are shown on this map.
The following table shows the average annual fee based on the type of Oregon Department of Environmental Quality permits held by covered entities:
Given COVID-19, is this the right time to pass a new fee on entities that provide healthcare?
Given the global pandemic and the important role the health care industry is playing, the four hospitals covered by this proposal will have one additional year to comply. These hospitals will be required to pay by April 2023.
Shouldn’t public agencies, like Portland Bureau of Environmental Services, the Port of Portland, or local universities be exempt?
Public agencies contribute to climate change and are as responsible for reducing their own emissions as private sector entities. As public agencies, we have an obligation and responsibility to support reaching Portland’s climate and air quality goals. The City believes it is not appropriate to require some polluters to pay, but exempt others. All large emitters should take responsibility and be expected to pay their fair share based on their level of pollution and encouraged to pollute less.
Is it fair for these covered entities pay both a State permit fee and a City of Portland fee?
Yes, because the purpose of the costs to covered entities are entirely different. The DEQ permit fees are based on cost recovery for DEQ to implement their air quality permit programs, not to fund broader climate action and air quality improvements locally — or statewide.
The purpose of this program is to reduce pollution that is generated and emitted in Portland. The covered entities are in the City of Portland and therefore have a responsibility to contribute to the investments required to reduce their local carbon emissions, improve air quality, and protect public health. Today, those costs are being externalized and borne by Portland residents. This program will ensure that the largest emitters take some responsibility for those impacts.
How does this interact with the Cap and Reduce climate program being implemented by the State of Oregon?
This is not duplicative of the State Cap and Reduce program but is complementary and will work in tandem. The City of Portland strongly supports the State’s efforts to develop a Cap and Reduce program to cut emissions. At the same time, it is critical that Portland can meet local reduction goals and address localized pollution problems.
What do businesses get out of this?
This is not a fee-for-service program. Instead it is a program that requires entities that emit harmful pollution — which has a direct cost and impact on public health, the local economy, and the quality of life in the Portland area — to reduce the negative impacts on the community. It enables the covered entities to step up, do their part, and take some responsibility to protect our environment, human health, and the local economy, improving the livability of our community which is important to the business community because it helps them attract and retain talent. The pollution reduction programs will also help Portland accelerate its transition to a clean economy and create good-paying jobs.
Is there a risk that these businesses may relocate away from Portland as a result of these proposed fees?
No, given that 49% of the covered entities would pay $25,000 or less a year, and 63% of the covered entities would pay less than $100,000 a year. These large emitters will have an incentive to reduce their pollution levels and pay less, which is a win-win for Portland. The proposed fees are not set at a level that would warrant major capital investments associated with moving an industrial facility or large hospital or educational campus.
Why is the City introducing this program now?
We are facing a climate crisis and are falling behind in meeting our reduction targets, and the public health impacts of exposure to air pollution is even more significant with COVID-19. The longer we wait, the more costly action will be, and the more risks posed to public health. In June 2020, the City of Portland adopted a Climate Emergency Declaration calling for “greater action, resources, and collaboration... to restore a safe climate.”
This proposal provides the resources to match the accelerated action required by the Climate Emergency Declaration to achieve greater than a 50% reduction in emissions in the next 9 years and to reach net zero by 2050 or sooner. Any delay in implementing this proposal postpones the action the City must take to scale up climate action in the face of climate change. As Portland City Council unanimously deemed human-caused climate change as an emergency, the City needs to resource this work with the same level of urgency.
Are any Minority or Women-owned firms covered?
No, none of the entities are minority- or women-owned firms.