Trading Greenbacks for Green Behavior: Oregon and the City of Portland's Environmental Incentives

Abstract

Both the State of Oregon and its largest city, Portland, believe environmental stewardship is a top priority. Through fiscal and other economic instruments, they have undertaken a cooperative effort to environmentally redevelop the state. This article examines the environmental initiatives implemented by Oregon and Portland and considers their impact. In determining whether these efforts are effective, a number of measures are considered. The cost of the initiatives is weighed against environmental improvements, economic impacts and equity considerations. The article first describes financial and other incentives offered by Portland and Oregon to it residents in exchange for "green" behavior. Because fiscal instruments have been implemented at different levels of government, the article discusses how issues that are under shared jurisdiction have been addressed. Based on available studies and other information, the article then considers whether or not these incentives have been successful and to what extent. Most studies do not address how fiscal instruments designed for environmental objectives impact different segments of society. This article considers issues of equity in analyzing the impact of both environmental degradation and its remediation through fiscal instruments. Finally, the analysis concludes with several observations regarding existing and future use of economic instruments for environmental reform.

Keywords: environment, financial incentives, tax policy, economics, states

JEL Classification: K32, K34, K22