WCI's Cap-and-Trade Plan
In the absence of comprehensive national legislation on climate change, cooperative regional agreements among individual states have emerged as the propelling force behind greenhouse gas reduction in North America.
This week, the Canadian province of Ontario became the 11th partner in the Western Climate Initiative (WCI), a group of U.S. western states and Canadian provinces committed to developing regional strategies to address climate change. (The WCI also includes 13 "observer" members from the U.S., Canada and Mexico.)
The WCI is laying the foundations for a regional cap-and-trade program to achieve its greenhouse gas reduction targets. Last year, the group announced its goal to achieve an aggregate reduction of 15% below 2005 levels by 2020. Last Wednesday, the WCI released the draft design for its cap-and-trade program, which is slated to be in place by 2012. Partners have considerable flexibility to decide how they will implement the program, reflecting the WCI's laudable effort to fight climate change without stifling economic growth or sending consumer prices sky-high.
Not everyone supports cap-and-trade, including the Canadian provinces of Saskatchewan and Alberta, who rejected cap-and-trade in mid-July, calling it a "cash grab" by Canada's resource-poor provinces. Others insist that the WCI proposal should be more aggressive about including emissions from transportation fuels, which account for a large percentage of greenhouse gas emissions.
In spite of some contention, however, regional cap-and-trade initiatives appear poised to make a dent in greenhouse gas emissions in the near future.
Post authored by Andrea Schmidt, summer associate at Tonkon Torp LLP.
