Regional Initiatives March Forward

On Monday, members of the three North American regional greenhouse gas reduction programs met in Washington D.C. to discuss potential areas for collaboration, and to send a clear signal to Congress as it debates climate legislation: these regional initiatives – and state leadership in general – are not going away. Representatives from the various U.S. states and Canadian provinces participating in the northeastern Regional Greenhouse Gas Initiative, the Western Climate Initiative, and the Midwestern Greenhouse Gas Reduction Accord traded information with one another and with representatives from federal agencies on the status of their respective programs, and explored paths for working together on carbon offset design, complementary GHG reduction policies such as energy efficiency measures, and possible linkages among their existing and developing carbon markets. Members of the regional initiatives also took their message to Capitol Hill, where they briefed press and Congressional staff on their initiatives, their intention to continue developing these programs, and their strong preference for federal cap and trade policy.

It was clear from these discussions that the states are moving ahead regardless of what happens at the federal level. All of the states represented support a strong, rigorous federal cap-and-trade program to reduce greenhouse gases (GHGs), but should such a program fail to materialize, the states and the regional initiatives will continue to move ahead with the development and implementation of their own trading programs, and potentially move to link these programs. When 23 states – representing 48 percent of the U.S. population, over half of U.S. GDP, and 37 percent of U.S. GHG emissions – and their partners in Canada sit down to talk about uniting their efforts to reduce emissions, it is clear that the choice is no longer between having a federal climate program or not; it is between having comprehensive climate legislation designed and negotiated in Congress, or having a de facto national North American carbon market driven by these state efforts, working in concert with regulations issued by federal agencies. States strongly prefer a federal trading system, but as far as they’re concerned, the foundation for a national cap-and-trade program has already been laid.

The states and regions also made clear that as they move ahead, they want to form a strong partnership with the U.S. EPA and other federal agencies, regardless of what happens with federal legislation. EPA is already moving to regulate greenhouse gases (as evidenced by the recently announced endangerment finding, and the tailoring rule and vehicle standards released earlier this year) and the states will play a key role in the implementation and enforcement of these new regulations. Even with federal climate legislation, states will play a key role in its implementation.

In addition, the states made clear that any federal plan needs to allow them the flexibility to continue crafting effective greenhouse gas reduction policies that can complement cap and trade, such as energy efficiency and renewable energy standards. For many at Monday’s meeting, preserving states’ ability to achieve emissions reductions beyond what is mandated at the federal level is an imperative; it is not clear to them that pending federal legislation and the tools currently available to the U.S. EPA under the Clean Air Act can achieve the levels of GHG reductions required, and that it may fall upon the states to make up the difference through policy innovation.