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|Articles - June 2014|
|Thursday, May 29, 2014|
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LESSON 2: It’s hard to get incentives right.
“I’m not typically an advocate of the government telling us what to do,” says Roger Lee, executive director of Economic Development for Central Oregon. A regional economic development agency, Bend-based EDCO uses its knowledge of tax incentives, real estate opportunities and business fundamentals to support business growth in Central Oregon. It has named renewable-energy development as one of seven industry sectors it is targeting. Excess regulation can drive out businesses, Lee says, whereas the right incentives can more effectively change behavior. “I’m a fan of the carrot, not the stick.”
But he warns that it’s hard to get industry-targeted incentives right. Lee points to the controversial Business Energy Tax Credit program, which gave away millions of dollars in green-business-focused tax subsidies but yielded little measurable result. In fact, a 2010 Oregonian investigation revealed several abuses of the BETC program: Walmart netted an $11 million profit by trading energy tax credits without making green investments; an ethanol plant got $12 million in tax subsidies, then declared bankruptcy and shut down; a Boardman business got $3.4 million to support tire recycling — even though it did not recycle tires. “BETC is a good example of an experiment that could have set us back, in terms of economic development policy,” Lee says.
Yet the Northwest Food Processors Association, a Portland-based trade group that advocates for food manufacturers in Oregon, Washington and Idaho, would like to see the return of BETC-like credits. “Many of our members used the Business Energy Tax Credit to make environmental improvements,” says Pam Barrow, director of energy and sustainability at the group. “It got out of hand, but legislative reforms were far too cumbersome. A program like BETC can help companies overcome barriers to making environmental improvements. Businesses already need to be in compliance with regulations, but with the right incentives, many companies will go beyond ‘compliance.’”
Charles Wilhoite, who has examined the finances and business choices of companies across the U.S. as managing director of Portland-based Willamette Management Associates, says his views on incentives are colored by his experiences on the Portland Development Commission and the board of the Nature Conservancy — although he did express surprise at being contacted for a story on “green business.” Subsidizing and actively recruiting environmentally focused businesses comes with political risks, he says. Not every startup will succeed, and when a taxpayer-backed solar business goes bust, skeptics are quick to cry foul. But Wilhoite believes these politically risky incentives can pay off over time. “Whether it’s battery innovations, renewables, electric cars, wind and solar businesses, we have seen opportunities and we are trying to encourage growth across the state,” he says. “To motivate businesses to drop anchor in the region, or to expand here, there have to be incentives.”
Deckert at the Oregon Business Association says he agrees in principle that incentives can play a crucial role in supporting risky yet vital business investments. But he also believes that green incentives should not come at the expense of other economic-development efforts. “We have other clusters. Advanced manufacturing is taking off in the state. We have huge workforce needs. We are building the next ships, airplanes, exporting products, and we can’t find qualified workers in the state of Oregon. That’s a big deal, and we need to make sure we don’t lose sight of that when we focus on green-business incentives.”
In short: there’s consensus that incentives can be an effective way to boost green investments and encourage environmental decision making — but little agreement on which incentives work best.
Friday, March 27, 2015
BY LINDA BAKER
My daughter turned 18 last week, and for her birthday I got her a Car2Go membership. Not to label myself a disruptor or anything, but it felt like a groundbreaking moment. The two of us, mother and child, were participating in a new teen rite of passage: Instead of handing over the car keys, I handed over a car-sharing card — with the caveat that she not use the gift as her own personal car service.
Monday, April 13, 2015
BY GRANT KIRBY | OP-ED CONTRIBUTOR
The mega-shift from technology-driven to data-driven organizations raises questions about Oregon’s workforce preparedness.
Friday, April 24, 2015
BY CHRIS HIGGINS
As digital security breaches skyrocket, a cybersleuth everyman takes center stage.
Friday, March 20, 2015
BY OB STAFF
Join us to celebrate and network with Oregon’s best green workplaces!
Monday, April 27, 2015
BY JACOB PALMER AND EILEEN GARVIN
A power lunch at Solstice Wood Fire Cafe & Bar.
Monday, April 27, 2015
BY AMY MILSHTEIN
Companies can benefit when they use software to meet staffing requirements and address employees' family and life commitments.
Friday, March 27, 2015
BY JOE CORTRIGHT
The CRC is a cautionary tale about how we plan for, finance and invest in transportation infrastructure.
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