This article originally ran on Forbes.com on February 5, 2026. All rights reserved.
Along with its West Coast neighbors, California and Washington, Oregon has moved hard left politically in the several years since the turn of the century. Now Oregon Governor Tina Kotek is seeking to implement the Oregon Climate Protection Program (CPP), whose goal is to cut 90% of carbon emissions statewide by 2050.
The CPP got its start in 2021 but was initially delayed by litigation brought by oil and gas interests. After that challenge was cleared up, in early 2025 the Oregon Environmental Quality Commission, which oversees the Oregon Department of Environmental Quality (DEQ), approved the new program. This included mandated targets for reducing greenhouse gas pollution at a 50% reduction in greenhouse gas pollution by the year 2035 and a 90% reduction by 2050. (Source).
The CPP is quite extensive. Oregon also will regulate the emissions of companies that are natural gas users. These companies have three years to collect data and devise plans for meeting these targets, as they must comply with the CPP by the year 2028.
The impact for Oregon residents at the pump will be substantial. Already the state gasoline tax is $0.52/gallon. Oregon legislators are proposing increasing that charge by another 20 cents per gallon over the next few years. In addition, in 2025, the DEQ set the price for "Community Climate Investments" (CCI) under its CPP at approximately $129-$132 per metric ton of carbon dioxide, among the highest in North America.
The first benchmark that Oregon’s regulated entities must meet is a 50% carbon reduction by 2035. One way to do this will be a cap-and-trade program, which after a few aborted attempts is now getting off the ground. According to the DEQ, “the program establishes a declining cap, or limit, on greenhouse gas emissions from fossil fuels used throughout Oregon, including diesel, gasoline, and natural gas.” (Source).
As with many such schemes, the Oregon cap-and-trade program mixes environmental justice and other social justice concepts with greenhouse gas reduction, either making the program more equitable or limiting its effectiveness by mixing its message, depending on one’s point of view. The DEQ claims the program “enhances public welfare, particularly for environmental justice communities, including communities of color, tribal, low-income, and rural communities.” It also “prioritizes equity by promoting benefits and reducing burdens for environmental justice communities most impacted by pollution and with less access to cleaner energy alternatives.”
Unfortunately for Oregon, the program is kicking in at exactly the moment that the State is struggling to find new business investment and to hold onto traditional Oregon businesses. Coffee maker Dutch Bros., an iconic Oregon creation started by two brothers in rural Grants Pass, Oregon, in 1992, announced last year that it was relocating its headquarters to Arizona. Tektronics, the legendary technology company that once was the State’s largest employer, is relocating to Raleigh, North Carolina. Oregon still has staple businesses like Nike and Columbia Sportswear, but should either of those two leave as well, it would be a crushing blow to the State’s business psyche.
Clearly, the Kotek Administration is hoping that the environmental gains predicted, or hoped, to come will offset the economic hardships, but this is a risky move for a state that dropped in CNBC’s annual “Best States for Business” list from 21st in 2023 to 39th in 2025. (Source).
AAA has calculated Oregon’s average gas price at $3.458/gallon, among the ten highest in the nation. In the face of that, the DEQ placed into its CPP rules a requirement that the State work with the Oregon Public Utilities Commission to ensure that natural gas companies do not pass on all the cost of decarbonization to their customers. (Source). This means that the State wants utilities to absorb the costs. The likely result of this is, to save money, utilities will engage in less maintenance and fewer infrastructure upgrades, neither of which is good for the people of Oregon in the long term.
Even the State’s flagship University, the University of Oregon, is facing massive budget deficits, projected at $25-30M. Despite the Ducks’ success on the football field, the University as a whole has proposed eliminating entire departments and fields of study, both infuriating professors and driving a wedge between the University’s well-funded athletic department and the perennially underfunded humanities and other programs. (Source).
Oregon’s business interests are also concerned. Over the last few months many groups have met with Kotek Administration officials to argue their case, but at this time the Governor remains committed to the program.
As with California, this seems an unusual time for Oregon to begin layering in increasing costs on consumers and businesses, which always are impacted by energy prices. Governor Kotek believes that the environmental benefits resulting from this plan will vindicate its costs. If she is not correct, there may be a lot fewer Oregonians left to pick up the pieces once the economic impacts ripple through.
