SACRAMENTO, California - The Western
Climate Initiative governments today announced the design of their new
regional market-based cap-and-trade program. The emissions trading
program is intended to reduce climate-changing greenhouse gas emissions
by 15 percent below 2005 levels by 2020.
The program recommendations met with support from environmental groups and criticism from the coal industry.
The WCI partners say the program is expected to encourage growth
in new green technologies, help build a strong clean energy economy,
and reduce dependence on foreign oil.
The cap-and-trade program is one element of a regional effort by the
governors and premiers of U.S. states and Canadian provinces to promote
environmental sustainability and economic growth by reducing greenhouse
The partner governments include seven U.S. states: Arizona,
California, Montana, New Mexico, Oregon, Quebec, Utah, and Washington;
and four Canadian provinces: British Columbia and Manitoba in the west,
and Ontario and Quebec in the east.
Together, the seven states and four provinces represent over 70
percent of the Canadian economy and 20 percent of the U.S. economy.
The carbon reduction strategy will cover nearly 90 percent of
the region's emissions, including those from electricity, industry,
transportation, and residential and commercial fuel use.
The cap-and-trade program will require emitters to cut their pollution
by setting a limit, or cap, on emissions and then allowing the market
to identify the
least costly ways to achieve the limit.
Through collaboration and consultation with stakeholders, the partner
governments decided to recommend reducing air pollutants, diversifying
energy sources, and advancing economic, environmental, and public
health objectives while avoiding localized or disproportionate
environmental or economic impacts.
The Western Climate Initiative partner governments have agreed
to begin reporting emissions in 2011 for emissions that occur in 2010.
The first phase of the cap-and-trade program will begin on January 1, 2012, with a three-year compliance period.
The second phase will begin in 2015, when the program is expanded to
include transportation fuels and residential, commercial and industrial
fuels not already covered in the first phase.
"This landmark action by a diverse coalition of Democratic and
Republican governors as well as Canadian premiers is a powerful signal
to the world that now is the time for dramatic action to stem global
warming," said Derek Walker, director of the California Climate
Initiative at Environmental Defense Fund. "This bold leadership will
strengthen California's economy and make the region a hub of clean
technology and green job growth."
Other environmentalists were pleased, but warned that many details
have yet to be worked out, including whether emissions allowances are
given to polluters for free, or whether they are auctioned off with the
revenues spent in the public interest.
The agreement unveiled today requires that, at least, 25 percent of the
allowances be auctioned by 2020 and encourages states to go further.
"The smartest, cheapest way to tackle global warming is to make
companies pay for every ton of pollution and use the revenue to ease
the transition to a clean energy economy," said Jeremiah Baumann, an
advocate for Environment Oregon.
"This will prevent windfall profits, save consumers money and
accelerate the transition to a clean energy economy," he said. "We look
forward to working with state officials to pursue that goal."
The American Coalition for Clean Coal Electricity, an industry
association, today expressed concern about the regional nature of the
Western Climate Initiative cap-and-trade program.
"By focusing on such programs, there is a strong chance the
state and/or regional mandates will conflict with future federal
mandates, in essence double taxing states where local mandates reside.
This would result in increased economic hardship for working families
and businesses in WCI states," said the coalition.
"There are better ways states and regions can continue
environmental progress and address climate change concerns without
harming the economy," the coalition stated.
"Such strategies include increasing energy efficiency programs
and funding advanced clean coal technology that can achieve real and
reductions in greenhouse gas emissions without putting western states'
economies at risk."
The coalition supports "the timely adoption of a mandatory federal program to reduce greenhouse gas emissions."
The coal coalition says that investments in technology are "the
only way to ensure that mandatory emissions reduction programs do not
come at the expense of reducing energy security or making residential
and business customers to pay unnecessarily higher costs for energy."
To read the Western Climate Initiative emissions trading recommendations, click here.