The partner jurisdictions of the Western Climate Initiative (WCI) have released detailed plans for greenhouse gas (GHG) reduction programs scheduled to take effect in 2012.
The "Design for the WCI Regional Program" (available at the link below) is the culmination of two years
of work by seven U.S. states and four Canadian provinces.
The objective of the WCI plan is to reduce regional GHG emissions to 15%
below 2005 levels by 2020. The document lays out a plan for:
- Creating a market-based system that caps GHG emissions and uses tradable permits to incent development of renewable and lower-polluting energy sources
- Encouraging GHG emissions reductions in industries not covered by the emissions cap, thus reducing energy costs region wide, and
- Advancing policies that expand energy efficiency programs, reduce vehicle emissions, encourage energy innovation in high-emitting industries, and help individuals transition to new jobs in the clean-energy economy.
"Scientific research confirms that our water resources, natural ecosystems, air quality, and environment-dependent industries like agriculture and tourism will continue to be significantly impacted by changes in climate if we do not act to reduce GHG emissions. Furthermore, studies have shown that the cost of inaction is high," the WCI said in a release.
In the absence of federal action to address climate change, regional agreements like the WCI will become more important and help to bring together the patchwork regulations of various states.
The Cap-and-Trade Program
The central component of the WCI
strategy is a market-based, regional cap-and-trade program for
GHG emissions.
The program will be composed of the
individual jurisdictions’ cap-and-trade programs implemented through
state and provincial regulations. Each Partner jurisdiction implementing
a cap-and-trade program will issue "emission allowances" to meet its
jurisdiction-specific emissions goal. The total number of available
allowances serves as the "cap" on emissions. A regional allowance market
is created by the Partner jurisdictions accepting one another’s
allowances for compliance. The allowances can be sold between and among
covered entities as well as by third parties.
The WCI program design includes features to ensure that the
program achieves the regional emissions goal affordably and
cost-effectively. For instance, emission offsets from sources not
covered by the program can be used in limited quantity along with
emission allowances to comply with the program. Allowing entities to
turn in allowances in three-year periods provides flexibility as to when
emissions reductions are made.
However, WCI has lost some of it support in recent months, as Republican governors in Arizona and Utah said their states would not participate in the cap-and-trade program; and Oregon, Washington and Montana have yet to pass laws supporting the program. That leaves only California and New Mexico ready to begin the cap-and-trade program in the U.S. in 2012.
While not all WCI partner jurisdictions will be implementing the cap-and-trade program when it begins in January 2012, those expected to move ahead comprise approximately two-thirds of total emissions in the WCI jurisdictions–enough to form a critical mass and a robust market, the WCI says.
Between now and the planned program start date of January 2012, the WCI Partner jurisdictions will address remaining program design issues and take the steps necessary to make regional trading operational. In addition, they will expand their efforts to develop and implement other core policies and programs to increase energy efficiency and fuel diversification in order to reduce GHG emissions.
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