Western states unveil far-reaching plan to cut GHG emissions
- Published Wednesday, September 24, 2008, by San Francisco Chronicle
States, provinces have plan to cut emissions
By David R. Baker
Chronicle Staff Writer
A coalition of Western states and Canadian provinces unveiled a
far-reaching plan on Tuesday that would ratchet back greenhouse gas
emissions from a broad expanse of North America and could serve as
a model for future federal action.
The plan, by the Western Climate Initiative, would limit emissions
across four provinces and seven states, including California and the
entire West Coast. In order to do so, the agreement would create
what's known as a cap-and-trade system.
Starting in 2012, the system would cap emissions from a wide range of
industries, from electricity generation to transportation. A market
would then be created in which companies within those industries
would buy and sell the right to release carbon dioxide, methane and
other gases that contribute to global warming. Companies having a
hard time cutting their emissions would trade with others that had
met their emission targets.
The initiative started in 2007 in response to growing concern about
rising temperatures around the world. California began talking with
four other states about coordinating their efforts to fight climate
change, and those talks eventually spanned the Canadian border. Each
of the initiative's member states and provinces will have to approve
its own legislation to enact the plan.
Those states and provinces represent 20 percent of the U.S. economy
and 70 percent of Canada's. But backers left no doubt Tuesday that
they want the system to expand, perhaps to include all of the two
"This is an important road map for what will be the most
comprehensive climate program in North America," said California Gov.
Arnold Schwarzenegger. "We're sending a strong message to our federal
governments that states and provinces are moving forward in the
absence of federal action, and we're setting the stage for national
programs that are just as aggressive."
President Bush has staunchly opposed setting any hard limits on
greenhouse gases. But both the Republican and Democratic presidential
candidates, Sen. John McCain and Sen. Barack Obama, support creating
a cap-and-trade system.
Meanwhile, 24 states nationwide are actively pursuing such trading
systems, although not all together.
Six Midwestern states are considering their own carbon market. And
10 Northeastern states are close to launching the country's first
cap-and-trade system to fight global warming, working together as
the Regional Greenhouse Gas Initiative. On Thursday, the group will
auction off "allowances" -- essentially, permits to release carbon
dioxide. Companies then will be able to buy and sell those allowances
Link to the West
The Northeast carbon market will include only one industry --
electricity generation. But backers hope eventually to connect that
system to the one proposed in the West.
"New York stands ready to link our system with the Western Climate
Initiative to create a cap-and-trade program that will protect our
environment, safeguard our citizens and create a strong, clean-energy
economy," said New York Gov. David Paterson.
Not everyone is convinced that cap-and-trade systems will achieve
those lofty goals. They fear that consumer prices will rise as
companies pass along the costs of buying greenhouse gas allowances.
"By levying an effective tax on carbon, a regional cap-and-trade
program would dramatically increase costs to consumers in the West
of virtually everything we buy, from energy to food to housing to
clothing," said Britt Weygandt, executive director of the Western
Business Roundtable. "Given current consumer anger over gasoline
prices, I think that proposals like this will get a pretty cool
reception at the household level."
Under the Western Climate Initiative proposal, each of the
participating states and provinces would have to pass its own
legislation to create the greenhouse gas trading system.
The plan gives each some wiggle room, letting participants choose
their own ways to enact policies so long as they fit the broader
The plan will dovetail with California's landmark global warming
law -- AB32 -- which calls for cutting the state's greenhouse gas
emissions back to 1990 levels by the year 2020. The California Air
Resources Board, the state agency drafting ways to implement AB32,
also helped create the Western Climate Initiative plan.
The regional plan would cover greenhouse gases emitted by power
plants, factories and other businesses, starting in 2012. Three years
later, it would expand to include emissions from transportation
States would decide for themselves how many of their allowances to
auction and how many to grant for free, so long as at least 10
percent were auctioned. Environmental groups say that giving away
allowances for free allows large emitters to profit without doing
anything to clean up their act.
The plan also allows "offsets," in which companies that are having
trouble cutting their greenhouse gas emissions pay for projects that
fight global warming. But the plan limits their use, saying they can
not account for more than half of the program's emission cuts.
The WCI-member states are Arizona, California, Montana, New Mexico,
Oregon, Utah and Washington. The member provinces are British
Columbia, Manitoba, Ontario and Quebec.
The regional plan
To read the full proposal from the Western Climate Initiative, go to:
What is cap and trade?
A cap-and-trade system sets hard limits on greenhouse gas emissions.
It allows companies over the limits to buy emission rights from those
under the limits. Limits decrease over time, forcing companies to
further cut their emissions or buy more rights.
E-mail David R. Baker at dbaker@...