Oregon considers creating third statewide carbon market

By Anne C. Mulkern | 06/12/2025 06:25 AM EDT

Groups are split over using market revenue for highway widening. Some say it would undercut climate efforts by increasing carbon emissions.

Oregon Gov. Tina Kotek (D) could see state lawmakers replace her carbon reduction program.

Oregon Gov. Tina Kotek (D) could see state lawmakers replace her carbon reduction program in 2026 with a new carbon market that would have expanded reach. AP/Jenny Kane

A bipartisan group of Oregon lawmakers is considering offering legislation to start the nation’s third statewide carbon market, but clashes over how to spend program revenues could create roadblocks.

The group briefly considered trying to launch a market this year but scrapped the idea amid disputes over whether market revenues should fund major highway projects. The group also had limited time, with Oregon’s 2025 legislative session expected to end June 29.

Carbon markets set limits on greenhouse gas emissions and force businesses with emissions over a certain level to buy pollution allowances. States can use sales of the allowances as revenue for projects.

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In the recent talks, Oregon Republicans supported using market revenues for projects that include freeway widening. A coalition of climate, health and disadvantaged community advocates said larger highways would increase driving and planet-warming emissions.

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