Coalition announces cap-and-trade strategy ahead of federal government

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A coalition of seven Western states and three Canadian provinces has announced a detailed plan to curb greenhouse gas emissions.

This week, partner jurisdictions of the Western Climate Initiative released a strategy that will reduce climate-warming emissions to 15 percent below 2005 levels by 2020. This will be achieved through supporting the development of clean-energy technologies and green jobs, increasing regional energy security and independence, and protecting public health.

The core of the initiative’s strategy to reduce carbon emissions is the implementation of a flexible cap-and-trade program, which will issue "emission allowances" in a carbon auction. The system, based on financial incentives, will begin with power plants and gradually expand to include large industrial producers and transportation.

The carbon allowances promote a flexible program in which entities will be able to sell and buy allowances, helping to keep costs low. Entities that under-produce carbon emissions can either save their allowances for future use or sell them on the market to recoup emissions reduction costs.

The Western regional carbon auction will begin in January 2012, and so far, two states – California and New Mexico – and three provinces – Quebec, Ontario and British Columbia – have begun writing regulations in preparation. However, these states and provinces account for 70 percent of the carbon emissions produced by the coalition.

The announcement comes as plans for a Congressional climate bill continues to stall. This week, Senate majority leader Harry Reid is expected to introduce a revised bill that will not include proposed carbon emissions caps, Reuters reports. President Barack Obama has not laid out plans for any future climate legislation, which will almost certainly prove more difficult to pass if Republicans gain in the November elections as expected.

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