Environmental Law

State and Regional Climate Efforts Could Help Prod National Action

By Dennis Pfaff and Kevin Livingston, Editors

Congress may have its problems moving ahead with climate change legislation, as evidenced by the failure of the Lieberman-Warner bill to advance last week, but officials in states and Canadian provinces have been laying the groundwork for regional efforts to establish greenhouse gas curbs and a carbon market.

Such efforts might provide a powerful incentive for action at the federal level, despite its potentially far-reaching nature. A key issue is the cost of curtailing the emissions, many of which are produced by the burning of fossil fuels such as coal and oil to generate electricity and to power the transportation system.

Recently the Western Climate Initiative, an organization of Western states and Canadian provinces as far east as Quebec, took another step toward instituting a regional cap-and-trade system, although it left some big questions still to be answered. For instance, the draft recommendations it issued last month left unresolved such key issues as exactly how many "allowances" or permits to emit certain amounts of heat-trapping gases would be sold or given away for free; how to treat emissions from transportation fuels, and industry thresholds.

Similarly, the Regional Greenhouse Gas Initiative involving Northeastern and Mid-Atlantic states has already set a date, Sept. 10, for its first round of auctions of carbon credits.

The aggressive approach by the states to the fight against climate change was mentioned prominently last week by Sen. John Warner. The Republican from Virginia was one of the key sponsors of the stalled Senate bill. Warner said all 50 states are in some way addressing climate change, a circumstance posing "a challenge" to the states to keep up with each other. Certain sectors of the economy, too, could feel the pressure, according to Warner:

"It poses a problem to the American industry and indeed the power industry and others to try and cope with 50 different legislative frameworks of how global climate change, energy conservation is to be handled in those states. This is why it's so imperative for the United States of America -- the federal government -- to move out."

The Western initiative has set as a regional goal reducing greenhouse emissions 15 percent below 2005 levels by 2020. That is somewhat less aggressive than the objective set by California's AB 32, which would reduce the state's carbon footprint to 1990 levels by 2020, about a 25 percent cut. California, which is a member of the regional group, has yet to adopt a full slate of measures to achieve the goal. A draft set of proposals is due to be unveiled June 26.

Programs developed through the regional initiative would be subject to implementation through laws and policies enacted by the states and provinces. 

Establishment of the regional initiatives represents in some ways an effort to coordinate the otherwise potentially scattered approaches of the states. However, under the recent recommendations put forward by officials developing the Western climate program, there apparently would be a good deal of autonomy granted to the individual jurisdictions.

The critical area of allowance distribution, which, as Climate Law Update has reported, has been a major area of discussion, at least at first would be left largely up to the states to decide, within certain parameters. For instance, the draft recommendations from the Western initiative give the states and provinces a wide range, between 25 percent and 75 percent, of what fraction of the credits to auction off. Beyond that, the document recommends that each member of the initiative "initially have flexibility" on the issuance of the credits. They could auction more than the minimum amount of allowances, issue some or all of the remaining allowances for free, hold some or all within a "compliance period" or retire the credits.

Despite the initial flexibility, eventually the multi-state-and-province coalition would "seek to standardize distribution of allowances as much as possible."

The draft underscores the debate still going on within such states as California. There, energy regulators are grappling with various elements of that state's groundbreaking climate change law and they are not expected to make final recommendations to the California Air Resources Board, the lead agency, on the allocation issue until at least August. 

In other areas, the draft recommendations urge that the cap-and-trade program include electricity generation, "large stationary combustion sources," industry and emissions from waste management. However, it was vague on how to handle emissions from transportation fuels, which account for 36 percent of the total emissions, the region's largest single source, and also how to  define the facilities that would have to participate.

Along those lines, it recommended setting "the threshold so that at least 90 percent of non-power plant stationary source fuel combustion emissions" throughout the region covered by the member states and provinces be covered. But it said the initiative is "still considering whether, and at what level" to apply thresholds to the electricity sector.

(Photo of coal-fired power plant: U.S. Department of Energy/National Renewable Energy Laboratory; Credit: Warren Gretz)    

Full post as published by Climate Law Update on June 09, 2008 (boomark / email).