CLIMATE CHANGE ROUNDUP: Court Decision Could Expand Western Climate Initiative Carbon Market

By Published On: October 29, 2010

In a development that could lead to a larger Western Climate Initiative carbon cap-and-trade market, a state court upheld Washington Governor Chris Gregoire’s executive order on climate change policy. In addition to California, the Western Climate Initiative includes Arizona, Montana, New Mexico, Oregon, Utah, and Washington, and the Canadian provinces of British Columbia, Manitoba, Ontario, and Quebec. Gregoire’s 2009 order directs state agencies to work with the Western Climate Initiative to establish a regional cap-and-trade program, as well as take other steps to control greenhouse gas emissions. She issued the order after failing to convince the Legislature to pass cap-and-trade legislation. The Evergreen Freedom Foundation challenged the gubernatorial directive in court, claiming it violated the separation of powers by seeking to carry forward a policy lawmakers had already rejected. However, the court on Oct. 22 found the governor had sufficient statutory authority to direct the activities of administrative agencies without any additional legislation. Foundation general counsel Michael Reitz maintained that while the governor’s order can direct state agencies to participate in the Western Climate Initiative process, the court did not rule she can take the next step and issue binding carbon cap-and-trade regulations in Washington. Reitz said the foundation will keep a watch on state agencies and oppose any cap-and-trade or other greenhouse gas regulations they may try to issue under the executive order. For now, the foundation does not plan to appeal the decision. Gregoire stated she was “not surprised” by the ruling, but instead questioned why the foundation filed the suit. However, the governor stopped short of saying her administration would go beyond helping the Western Climate Initiative shape the ground rules for a regional carbon market and actually implement carbon trading in Washington. If the state ultimately joins in a Western Climate Initiative carbon market, it would likely become the third to do so. Both California and New Mexico are poised to adopt cap-and-trade programs before the year is out. * * * * * Now that the dust has settled in the halls of the Legislature and all eyes have turned to the election, the final legislative scorecard for 2010 showed it was a bad year for climate change bills in Sacramento. The California Air Resources Board’s final legislative summary for 2010, issued earlier this month, shows that of 22 bills introduced dealing with climate change--both to expand and restrict programs--only three minor measures passed, dealing with forestry, energy storage, and a state climate change adaptation plan. Renewable energy legislation, also largely aimed at curbing greenhouse gases, came out low in the standings too this year, according to the Air Board report. There were 21 separate measures and only three made it into law, including one to speed renewable energy project siting. Bills to push solar energy, wind power, and biofuels wound up in the cellar, failing to muster sufficient support to make into state code. Faced with Proposition 23 and a bad economy, lawmakers wavered on new green mandates. * * * * * Regulators banking on electric cars to reduce greenhouse gases and electric utilities investing money to prepare the grid for charging them need to be cautious, according to a J.D. Power market outlook issued Oct. 27. Low gas prices and high prices for electric vehicle technology are likely to hinder mass appeal of pure electric and plug-in hybrid electric vehicles throughout the decade, the leading automotive market analysis firm concluded. This year, less than a million of the 44.7 million vehicles sold worldwide will be electric, or about 2.2 percent. That will rise to only 7.3 percent of the market by 2020, or about 5.2 million of the 71 million vehicles projected to be sold worldwide by then. The report indicated that despite efforts in California and the United States to push electric vehicles, any market breakthrough is most likely to come in China, which has both greater capacity to invest in electric vehicle technology and greater power to mandate electric vehicles. J.D. Power noted too that the auto market is growing rapidly in China, creating more opportunity for electric vehicle makers.

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