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Western states unveil far-reaching plan to cut GHG emissions

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  • 9/24 SF Chronicle
    Published Wednesday, September 24, 2008, by San Francisco Chronicle States, provinces have plan to cut emissions By David R. Baker Chronicle Staff Writer A
    Message 1 of 1 , Sep 25, 2008
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      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
      countries.

      "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
      among themselves.

      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.

      Individual plans

      The plan gives each some wiggle room, letting participants choose
      their own ways to enact policies so long as they fit the broader
      framework.

      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
      fuels.

      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:
      http://westernclimateinitiative.org

      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@...
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