The Western Climate Initiative (WCI) is a collaboration of seven Western states (Arizona, California, Montana, New Mexico, Oregon, Utah and Washington) and four Canadian provinces (British Columbia, Manitoba, Ontario and Quebec), dedicated to reducing greenhouse gas emissions to 15 percent below 2005 levels by 2020.
Two years ago there was a major push in each of the member legislatures to get a cap-and-trade bill passed that would apply to individual states. Although there were obvious reservations that adoption of local cap-and-trade legislation would both have an insignificant effect on global climate change and create a real competitive disadvantage for the state’s businesses, the argument for adopting state cap-and-trade legislation was that if all WCI members acted in unison, the result would both be significant from a climate perspective and would insure that local businesses were not unduly hampered relative to their peers elsewhere. In addition, businesses in states that adopted cap-and-trade legislation early would have a head start in adapting when federal carbon caps eventually happened. (Although that argument has a certain “eat your spinach; it’s good for you” quality about it.)
That legislative effort in 2009 foundered. In part, at least in Washington the legislation put forward by WCI’s representatives from the Washington Department of Ecology was simply too schematic and left too much to speculative future rule-making. The Washington Legislature was not prepared to leave that much major new regulation in the hands of future regulatory drafting. The new Obama Administration also gave promise that there would be federal cap-and-trade legislation in the foreseeable future. Combining those issues with the various political forces that oppose cap-and-trade legislation anywhere for any reason, there was simply not a majority to adopt the WCI proposal.
Now the U.S. Senate has put federal cap-and-trade legislation on hold for at least this session. With the economy still struggling and the Tea Party making a bid for political dominance, it remains to be seen whether there will be any federal will to take on carbon limitation after this November’s election.
Into that vacuum, WCI recently released a revised, beefed up regional cap-and-trade program, which it is again seeking to have individual members adopt.
The detailed design section of the report contains draft legislation that in fact addresses many of the voids in the 2009 legislative package. It specifies the areas of program design that are expected to be the same across all participating jurisdictions in order to create the common market, and also those areas that may vary between jurisdictions. On the other hand, each jurisdiction would still need to adopt its own rules to implement the program, still leaving substantial areas for state agencies to control major segments of the economy. Assuming that there is a will to adopt the WCI program, it will take a considerable amount of study to determine whether the WCI program is now sufficiently detailed that it is ready for legislative approval.
Any consideration of the revised WCI program will be done by 2011 legislatures, and it remains to be seen whether the November elections will leave WCI member states with the political will to tackle a very tough and divisive subject. But at least this time they will have more substance to consider thanks to WCI’s updated and more detailed work.