Portland and Emissions Reductions: Much gain, little pain

Climate Forests Investments Jan 1, 2001
Oakley Brooks

Portland, Oregon was the first city in the United States to adopt a greenhouse gas reduction plan in 1993. Now, the city claims to have achieved an overall emissions reduction. In other words, while the rest of the country has been discussing the costs and benefits of cutting greenhouse gas emissions to 1990 levels, Portland has all but done it. The Ecosystem Marketplace reports from the US metropolis that has decided to stop talking and start walking. In 1997, Eric Sten, then a year into his first term as a city commissioner in Portland, Oregon, visited Japan to discuss his city's efforts to combat global warming. Portland–the first US city to adopt a greenhouse gas reduction program–had been working on the issue since 1993 and local governments around the world were interested in what the city had done. At a Japanese forum, a member of the audience rose and asked Sten how city officials had convinced Portland citizens to care about cutting fossil fuels. Sten's response was surprisingly candid, "I'm not sure the public does care." Eight years later, in June of this year, Portland announced that it had succeeded in cutting greenhouse gas emissions levels to within 1% of 1990 levels, on the way to a targeted 10% reduction below 1990 levels by 2010. Sten, still a Portland commissioner, insists that the reductions came not because Portland converted all of its citizens into global warming believers but because the city made investments that had tangible environmental and quality of life benefits, in addition to reducing greenhouse gasses. "We made progress on this issue by doing things that make Portland a good place to live," Sten says, "Not because of things that are specific to global warming." Sten's observation is provocative in light of recent debates concerning the best approach to global warming. When it comes to cutting greenhouse gases, politicians at the federal level have been arguing over the choice between a healthy environment and a healthy economy. But cities such as Portland are showing that they can cut greenhouse gas emissions without bringing communities and local economies to a grinding halt. "I knew there were efforts going on but to have that kind of significant reduction was remarkable," says Dennis Wilde, a Portland-based developer. "What's really remarkable is there's been no pain. People didn't put on hair shirts and go live in caves."

Slowly but surely

As Portland officials count it, overall greenhouse gas emissions have dropped to 0.7% above 1990 levels. Transportation-related emissions essentially have been flat, combined emissions in homes, offices and industry have decreased slightly, and waste gases–largely extrapolated from methane gas escaping from rotting landfill waste–have decreased significantly. For more than three decades, continued investments in public transit have given Portlanders one of the best transit systems in the country. Meanwhile, statewide energy efficiency programs aimed at stabilizing prices have also conserved energy. On top of transportation and energy efficiency, Michael Armstrong, Portland's lead analyst on global warming, says that the state's land use program has provided a solid foundation for greenhouse gas reductions over the last 15 years. "We wouldn't be here without land use," Armstrong says. Oregon's 30-year-old land use system was formed in the early 1970s, after Oregonians watched California-style growth creep onto the state's farmland, forests and wild coastline. The system confines most development to urban centers. There's little question that compact development has been effective in limiting auto use and related emissions. A recent study by the Seattle-based think tank Northwest Environment Watch found that the 45% of Portlanders living in compact inner-city neighborhoods use 25% of the gas of typical suburbanites. Portlanders' low driving rate can be attributed to widespread transit use. Downtown Portland, in particular, is served well by the local transit agency, Trimet. And there are corresponding greenhouse gas benefits–75% of Trimet's 290,000 daily trips are by "choice" riders who leave a car at home. Energy efficiency efforts were aided by two key policy decisions: around 1990, Oregon's utilities commission began requiring investor-owned power companies to include energy efficiency spending in new resource plans; at the same time, the state also dramatically raised building code requirements for things such as roof and wall insulation. Utilities began pumping more money into streamlining industrial processes and weatherizing homes because reducing energy demand through efficiency projects often proved cheaper than building new capacity. Portland General Electric, one of two electric utilities that serve Portland, bought roughly 150 average megawatts worth of efficiency in the 1990s, the equivalent of a gas turbine power plant. "We'd never touched the commercial or industrial markets until [the new policy]," says Carol Brown head of PGE's efficiency services. "On a regional basis, it just became more important." At the same time, building code upgrades dropped energy bills an average of 40% in new homes.

The downside

Portland's greenhouse gas reductions were not, however, entirely pain-free. "It's OK to look at how our living patterns affect emissions," says Jack Orchard, a Portland land use attorney and keen observer of city politics. "But we've made some political decisions along the way that we have to face up to." Home prices in Portland, for instance, have been on a steady climb in recent years, with the median home price rising 12% in the last year and topping $200,000 for the first time. Many developers and real estate agents whose businesses might benefit from faster development blame Portland's urban growth boundary, which limits new land available at the city's fringes. Other developers, mainly those who have figured out how to navigate the land use system, note that Portland prices still don't approach those of Seattle and San Francisco, the nearest comparable markets, and that a constrained land supply guards against raw land speculation and huge market fluctuations. Whichever way you look at it, it is clear that Portland's battle against urban sprawl has made home-ownership more expensive for some. Some critics have also blasted the region's spending on light rail, including a line to Portland's western suburbs, which cost almost $1 billion–$250 million of which came from local coffers. "The city should stop spending money on a form of transit that people gave up on 50 years ago," says John Charles, president of the libertarian Cascade Policy Institute and former director of the Oregon Environmental Council. "For a lot less time and energy they could put out pretty good bus service." Likewise, the jury is still out on whether or not Oregon's recent 3% tax on energy bills, used to fund energy efficiency and renewable energy projects, is good policy. As part of energy deregulation in the late 1990s, the utilities commission established the tax and shifted efficiency projects from the utilities to a new nonprofit, the Energy Trust of Oregon, backed by a portion of the tax. The commission reasoned that stable funding for a nonprofit, rather than market driven spending would better drive efficiency efforts and renewable energy production. Eric Sten admits that the tax-funded trust may not represent the most efficient way to back renewables and efficiency. But, he says, in the absence of strong federal renewables programs, the Energy Trust is a good method for transforming the Oregon energy market. "You have to look at the 3% tax in the vacuum of federal policy," Sten adds. "Is it a good response to bad policy at the federal level? Probably."

The upside

Despite seeing the costs associated with the Portland's greenhouse gas plan, attorney Jack Orchard says that many of the related investments in things such as bike lanes, walking routes and tree planting strengthen the city economically. "Those kinds of things reduce the city to a human scale," he says. "From a business standpoint, that's been a positive." Sten argues that those smaller projects, combined with the transportation and land use systems, have encouraged inner-city investment. Those investments gave Portland thriving commercial districts and an enviable cultural scene that are attractive to young people moving into the city. The metropolitan area has grown by 400,000 people since 1990 and though the economy took a beating from the high-tech bust, it is now spawning new industries that owe their growth, in part, to global warming efforts. Portland's exploding "green building" industry provides a ready example. Spurred by state efforts to encourage energy efficiency, new construction in Portland and elsewhere has a significantly smaller climate imprint than it did in the past. The city now has nine high-performance, energy-efficient buildings certified by the US Green Building Council and another 47 awaiting certification–combined they give Portland the most green buildings of any city in the country. Dennis Wilde of Gerding/Edlen Development, a high performance building pioneer, is now involved in remaking an entire industrial section of South Portland into a green residential and office center. Wilde says the company will leverage the gamut of local incentives in order to make their project both more profitable and energy efficient. Key among the incentives is the state's Business Energy Tax Credit, which allows a building owner to write off 35% of spending on efficiency and renewable power purchases and on-site power generation. "That's been huge; it's one of the best programs in the country," says Wilde, who's now managing projects up and down the West Coast. "We use it with our build-to-suit customers and they'll make investments because we can pass that through to them." The green building boom extends into support industries. The Energy Trust estimates that its spending last year generated $7.8 million in new wages and the equivalent of 138 jobs. The trust's alliance of 400 statewide contractors installs everything from HVAC systems to solar panels. In September, Portland General Electric will spin off a separate consulting company, Green Building Services, which has been working recently with officials in Shanghai. "They have a lot of respect that we're from Portland and they know what work's been done here," Green Building Services' Jay Colson says of clients around the world. Lately, the competition in the United States is stiffening, Colson says. Already, Chicago has built a green technology center and city officials are pushing aggressive new building standards.

Portland now leads a pack

While Congress and the White House haggle over how to tackle global warming, cities and states are following Portland's lead and pressing ahead with their own plans to cut carbon emissions. Following international ratification of the Kyoto treaty, which asks signatories to cut emissions below 1990 levels by 2012, more than 170 cities nationwide have joined Seattle Mayor Greg Nickels in pledging to make similar cuts. The group includes 800-pound gorillas such as Chicago and New York and, collectively, it represents 36 million people. Governors on the West Coast and in the Northeast are also setting greenhouse gas reduction goals. Local plans don't take care of huge greenhouse gas emitters such as national defense operations and energy intensive industry outside local jurisdiction. But they hold legitimate clout. "Local government is important because cities are where a lot of the energy is consumed and governments can determined how intensely that energy is used," says Abby Young, director of strategic planning at ICLEI, an international nonprofit working to combat global warming. Besides, local governments, perhaps more than Washington, have an acute interest in stopping global warming. After all, they stand to bear the burden of warming's potential effects: changes in water cycles, increasing weather intensity, rising sea levels. In the words of Portland's Michael Armstrong, "The projections about the water situation," he explains, "are making us all stand up and pay attention." Oakley Brooks is a Portland-based writer and associate editor at Oregon Business. He can be reached at oakleyb@nulloregonbusiness.com First posted: August 16, 2005