U.S. States & Regions
States and regions across the country are adopting climate policies, including the development of regional greenhouse gas reduction markets, the creation of state and local climate action and adaptation plans, and increasing renewable energy generation. Read More
On May 1, 2008, Governor Ted Strickland signed substitute Senate Bill 221 into law, establishing an alternative energy portfolio standard (AEPS) for the state of Ohio. The law mandates that by 2025, at least 25 percent of all electricity sold in the state come from alternative energy resources. At least half of the standard, or 12.5 percent of electricity sold, must be generated by renewable sources such as wind, solar (which must account for at least 0.5 percent of electricity use by 2025), hydropower, geothermal, or biomass. At least half of this renewable energy must be generated in-state. In addition to renewables, the additional 12.5 percent of the overall 25 percent standard can also be met through alternative energy resources like third-generation nuclear power plants, fuel cells, energy-efficiency programs, and clean coal technology that can control or prevent carbon dioxide emissions. The bill also creates a renewable energy credit (REC) tracking system, which allows utilities to buy, sell, and trade credits to comply with the renewable energy and solar energy requirements. Additionally, electric utilities will be required to achieve energy savings of 22.5 percent by the end of 2025 through energy efficiency programs. Utilities must also implement programs to reduce peak energy demand one percent beginning in 2009, and an additional .75 percent per year through 2018. With the enactment of this new legislation, Ohio becomes the 27th state to establish a renewable electricity standard.
SB 221 authorizes the Public Utilities Commission of Ohio (PUCO) to develop rules for decoupling, a mechanism that separates utility profits from the volume of electricity sales. The bill also requires PUCO to adopt rules establishing greenhouse-gas reporting requirements, including participation in the Climate Registry, which aims to develop a common system for tracking GHG emissions between jurisdictions.
On April 18, 2008, at Yale University’s 2008 Conference of Governors on Climate Change, four governors - along with representatives from another 14 states - signed a joint declaration on the future of climate change policy in the United States.
In agreeing to the declaration, the state representatives and the participating governors – Jon Corzine of New Jersey, M. Jodi Rell of Connecticut, Arnold Schwarzenegger of California, and Kathleen Sebelius of Kansas – recommitted to the task of addressing climate change. The declaration identifies several principles to help inform national climate policy, including the need for a partnership approach between the federal and state governments, that state-based programs should continue to receive support, and that mandatory action at both the state and federal level should be rewarded and encouraged. The signatories pledged to coordinate their respective efforts, and to solicit the support of other states and members of Congress in taking action. They also agreed to reach out to current Presidential candidates in order to help shape the first 100 days of the next Administration.
In addition to the four states represented by the participating governors, the 14 other states who signed the policy declaration included Arizona, Colorado, Delaware, Florida, Illinois, Maryland, Massachusetts, Maine, Michigan, New Mexico, New York, Oregon, Virginia, and Washington. The Conference also included presentations and keynote addresses from a number of speakers, including Nobel Laureate Dr. R.K. Pachauri, California Governor Arnold Schwarzenegger, and Theodore Roosevelt IV, Chair of Strategies for the Global Environment, the umbrella organization for the Center for Climate and Energy Solutions, formally the Pew Center on Global Climate Change.
On April 2, 2008, 12 states, the District of Columbia, two cities, and several environmental groups sued the U.S. Environmental Protection Agency over its failure to regulate greenhouse gas emissions from motor vehicles. The states and other petitioners are asking the U.S. Circuit Court of Appeals for the District of Columbia to force the EPA to issue within 60 days its formal determination of the public health impacts from GHG emissions. In filing their suit, the plaintiffs cited the Supreme Court’s April 2007 decision in Massachusetts et al v. EPA, in which the Court ruled that the EPA is authorized to regulate greenhouse gases under the federal Clean Air Act, and must consider doing so unless it can demonstrate that these gases do not contribute to climate change that harms human health and welfare. Since the Supreme Court’s ruling, the EPA has not issued any formal language or rules for the regulation of CO2 or other greenhouse gases. The states joining the lawsuit include California, Connecticut, Illinois, Maine, Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, Arizona, Delaware, Iowa, Maryland and Minnesota.
On March 21, 2008, Governor Kathleen Sebelius signed Executive Order 08-03, which establishes the Kansas Energy and Environmental Policy Advisory Group. The new 25-member Advisory Group will recommend steps that the state can take to reduce its greenhouse gas emissions, as well as a proposed timetable for implementation of those recommendations. The Advisory Group will consider issues such as community economic development and electricity generation, and opportunities for diversifying the state’s energy portfolio. Kansas joins 36 other states in formulating a climate action plan. Having previously denied permits to two new coal-fired power plants, Governor Sebelius also vetoed Senate Bill 327, which would have allowed construction of the plants to continue.
Executive Order 08-03
Senate Bill 327
Governor's Message for Senate Bill 327
On March 20, 2008, Governor Jim Douglas signed into law Senate Bill S.209, the Energy Efficiency and Affordability Act of 2008. The act establishes a statewide goal of producing 25 percent of the energy consumed in the state from renewable sources, particularly Vermont’s farms and forests, by 2025. The act increases the use of net metering in the state and expands the use of biodiesel in state buildings and the state’s vehicle fleet. It also includes new funding for efficiency programs that will coordinate expertise, technical assistance, and resources, as well as tax incentives designed to help promote investment in renewable energy resources. In addition, the act establishes a fuel efficiency fund, financed by revenues from the sale of the state’s emission allowances under the Regional Greenhouse Gas Initiative’s (RGGI) cap-and-trade program.
On March 13, 2008, Washington Governor Christine Gregoire signed into law House 2815, the Climate Change Framework/Green-Collar Jobs Act. The bill calls for reductions from the state’s transportation sector, Washington’s largest contributor to greenhouse gas emissions, by cutting vehicle miles traveled by 18 percent by 2020, 30 percent by 2035, and 50 percent by 2050. The bill directs state agencies to provide training and incentives in an effort to attract green-collar jobs to Washington. It also requires the state’s largest emitters to inventory and report their emissions beginning in 2010, and directs relevant state agencies to continue working regionally with other Western states and Canadian provinces to design and implement a market-based system to reduce greenhouse gas pollution from major sectors of the economy. Statewide targets adopted in 2007 require a reduction of greenhouse gas emissions to 1990 levels by 2020, 25 below 1990 levels by 2035, and 50 percent below 1990 levels by 2050. This new bill directs the Department of Ecology to submit a comprehensive plan to the legislature, outlining specific measures to reach these targets, and to provide an update on Washington’s ongoing participation in the Western Climate Initiative multisector cap-and-trade design process.
Designing a Cap-and-Trade Program for the Midwest
World Resources Institute
Pew Center on Global Climate Change
Download the paper (pdf)
The Greenhouse Gas Accord announced by ten Midwestern governors in November 2007 involves nearly one fourth of U.S. greenhouse gas emissions in a regional agreement to improve energy security and design a greenhouse gas (GHG) reduction program. Among the strategies described in this accord is the use of a market-based, multi-sector cap-and-trade mechanism to reduce emissions. As the Midwest explores options for such a program, it will face a variety of design choices regarding program goals, costs, and equity. This paper is intended to guide many of these choices by describing some of the options available.
This paper begins with a general overview of the basic building blocks of cap and trade, followed by a discussion of the potential scope of coverage of a program, including what entities might be regulated and which emissions. The paper then focuses on how to set the initial emissions cap and the trajectory for emissions reductions under a potential program. An examination of the options for distributing allowances, or permits to emit, follows. The document then explores how a program might grant early reduction credits, offer project-based offset credits, and provide other potential cost-containment measures. The potential for linking with other similar programs is then briefly discussed.
On February 27, 2008, New Mexico Governor Bill Richardson signed into law House Bill 305, which strengthens the state’s existing Efficient Use of Energy Act. The bill provides financial incentives to electric and gas utilities to reduce their customers’ energy consumption. HB 305 decouples utility revenues from electricity sales, allowing utilities to earn profits by investing in demand-side efficiency projects rather than simply building new power plants to meet demand. State regulators are now required to approve higher profits for energy-efficiency programs that are more cost-effective than building new electric generation plants. HB 305 also requires electric utilities to achieve energy-efficiency savings of at least five percent of 2005 sales by 2014, and 10 percent by 2020. New Mexico’s Public Regulation Commission (PRC) may set alternative requirements if the utility demonstrates it cannot meet those minimum requirements. The bill further strengthens the state’s energy efficiency measurement and verification requirement, and requires an assessment of utilities’ energy efficiency programs every three years by an independent program evaluator.
February 27, 2008
Contact: Tom Steinfeldt, (703) 516-4146
PEW CENTER CONVENES STATE – FEDERAL CONFERENCE
Participants Call for a Shared Approach to Climate Change Policy
The Pew Center on Global Climate Change, in conjunction with the Pew Center on the States, convened its annual conference February 25-26 that focused on innovative approaches to climate change. This year’s conference addressed critical issues between states and the federal government in developing policies to reduce greenhouse gas emissions.
The conference featured speeches by Minnesota Gov. Tim Pawlenty, New Mexico Gov. Bill Richardson, and Sen. John Kerry of Massachusetts. Pawlenty and Richardson, considered possible Republican and Democratic vice presidential contenders respectively, highlighted their states’ clean energy efforts and the different roles state and federal governments can play to advance emission reduction policies. In his remarks, Kerry cited the immediate need for federal leadership on climate change and encouraged grassroots efforts at state and local levels to pressure federal officials to act.
The two-day conference included several panel discussions about key climate change topics confronting state and federal leaders. Significant discussion focused on the design of a cap-and-trade program, which is slated for implementation in three regional programs involving 23 states and is the centerpiece of pending legislation in Congress. The regional efforts – the Regional Greenhouse Gas Initiative in the Northeast; the Western Climate Initiative; and the Midwestern Regional Greenhouse Gas Reduction Accord – are viewed largely as laboratories for a future national climate plan.
“We need to strike a balance between what states and the federal government do best, and reflect this in a strong national climate policy,” said Eileen Claussen, President of the Pew Center on Global Climate Change. “States are demonstrating their unique ability to serve as proving grounds for sensible climate action. But the federal government must show leadership if we are to achieve the most cost-effective and comprehensive path to reduce emissions.”
Additional topics addressed at the conference included low-carbon transportation solutions, electricity options, and smart growth. Adaptation, an increasingly important concern for state and federal policymakers, also received close attention. Nearly 200 participants attended, including state environment and energy officials, top advisers to regional climate initiatives, Congressional staff, business leaders, and experts from nonprofit organizations, among others.
As part of its Climate Change 101 series, the Pew Center released two new briefs: Cap and Trade 101 and Adaptation 101 at the event. A new paper addressing state options for a low-carbon coal policy, part of the Pew Center’s Coal Initiative Series, was also announced. A forthcoming paper by World Resources Institute Senior Fellow Franz Litz, Toward a Constructive Dialogue on Federal and State Roles in U.S. Climate Change Policy, was released for public review.
Conference presentations are available online at www.c2es.org/statefed08.
Speech by Eileen Claussen, President, Pew Center on Global Climate Change
Pew Center State and Federal Workshop
February 25, 2008
On behalf of the Pew Center on Global Climate Change and the Pew Center on the States, I’d like to welcome you to our conference: Innovative Approaches to Climate Change: A State-Federal Workshop. I welcome the opportunity to be with all of you and kick-off this very timely conference that will examine the specific roles of Washington and the states in addressing the urgent challenge of global climate change.
As most of you know, what is happening on this issue right now is this: In the absence of federal action, states have taken the lead in designing regulatory approaches to reduce the greenhouse gas emissions that cause climate change. And while it is good that the states are acting - it does not mean the federal government is irrelevant. In fact, both Washington and the states have specific and important roles to play. And I will spend a few minutes this morning discussing what these different yet complementary roles look like and mean.
But first, let’s examine why states are acting. I think there are three reasons: risks, opportunities and authority. States are very close to what is happening - they see the risks that climate change poses to their states – not just higher temperatures and heat waves, but more coastal flooding, more intense rainfall, higher levels of drought, increases in the number and intensity of wildfires, and more. But many states also see opportunities in responding proactively to climate change, including developing new industries in alternative energy, applying information technology to buildings to improve energy efficiency, and improving the quality of life for their citizens through smarter growth.
States also recognize that they have real authority to reduce emissions. They are empowered to take action. States can promote clean electricity and energy efficiency with policy tools such as net metering, green pricing, and public benefit funds. States have authority to adopt building efficiency codes, which can have a major impact when you consider that energy use in buildings produces about 43 percent of U.S. carbon dioxide emissions. States also have great control over smart growth policies and transportation policies aimed at reducing emissions from cars and trucks. These are examples of things that fall within a state’s authority and in many instances, outside the authority of the federal government.
But what about the federal government? Washington most assuredly has been absent from the effort to reduce U.S. emissions, as I have said. But there are signs this will change, probably in the next couple of years. And so, when the federal government finally chooses to act, is there a risk that it might come in and supercede all the good and thoughtful work of the states?
I think not. I think the question of federal vs. state action on climate change is not a question of either/or. My thesis is that the states can do some things (indeed they are better suited to do some things) and Washington can do other things that only Washington can do. And I think there is more than enough responsibility and hard work to go around.
For example, certain actions, if they are taken nationally, can be more cost-effective. And we also have to keep in mind that there is no guarantee that all states would act individually. In order to reduce emissions of greenhouse gases, and to do so both cost-effectively and to the levels scientists say are necessary, I do believe we need the federal government to step up to the plate at the same time that the states are doing their part.
One of the things that Washington can and should do is to create a national cap-and-trade program to reduce greenhouse gas emissions. Cap-and-trade has been embraced by business and political leaders from both parties as the best and most cost-effective way to achieve real, specified reductions in emissions. But cap-and-trade works best when it covers many emission sources.
The more states, or the more countries, that are part of the system, the more you can achieve efficiencies of scale and the more you can lower the cost of reducing emissions. This is why many states are reaching across their borders to establish regional cap-and-trade programs. They understand that the economics of cap-and-trade get better when more states and more communities are involved. But if regional approaches are better than going state-by-state, it is also true that a national approach is better than doing this on a region-by-region basis.
Ultimately, we need a national cap-and-trade program like the one making its way through the U.S. Senate. This plan aims to reduce emissions across the country and levels the playing field for businesses in all 50 states. It ensures that we’re able to take full advantage (as a nation) of the cheapest emission reductions we can find.
Another thing that only the federal government can do is negotiate and enter into international agreements on climate change. At the federal level, the United States needs to commit to play an active part in crafting an effective global response to this problem. We have not been playing a constructive role in this process – and that has to stop.
International negotiators, including the U.S., have agreed to a process aimed at producing a new global climate treaty by the end of 2009. This is an extremely ambitious goal, but one worth pursuing. Clearly, we need a global agreement as soon as possible that includes binding commitments from the world's largest economies. And a global agreement that creates a worldwide market for emission reductions will help lower the global costs of achieving our emission reduction goals.
Negotiating such an agreement is clearly a federal government responsibility … and it is a responsibility we will carry out more effectively if we commit as soon as possible to a national program of reducing emissions. Right now, emerging economies and major sources of emissions like China and India are hiding behind U.S. inaction on this issue. U.S. leadership, in the form of mandatory emission limits at home coupled with a strong push for binding international commitments, would set the stage for effective global action – and, ultimately, real progress in reducing emissions around the world.
Does this mean the states should step aside and cede the leadership role on the climate issue to Washington? No. The states can and should keep exploring ways to leverage their unique authorities in areas from energy regulation to building codes, smart-growth planning and more. States are doing important and valuable work in all of these areas, and that must continue at the same time that the federal government begins to fulfill its role in the partnership.
In closing, I want to remind you of the vision of Justice Louis Brandeis. He saw the U.S. states as “laboratories of democracy” where policy innovations could take hold and perhaps provide models for other states, and for our national government as well.
And I honestly believe we would not be where we are today in the climate debate – on the verge of adopting a national cap-and-trade program – if many of the states had not acted first to adopt their own targets and to pursue cross-border emission trading regimes.
The U.S. states are acting in the best traditions of federalism by advancing an array of solutions to climate change that address their specific concerns and that take advantage of their unique responsibilities in our federalist system of government. Today, the challenge is to create a more balanced state and federal partnership – a partnership that promises to bring much-needed certainty to the question of how we as a nation are going to address the most critical environmental issue of our time.