Western Region GHG Plan Taking Shape

The Western Climate Initiative’s recently-released draft plan for reporting and allocating greenhouse gas emissions is built around an expected regional cap-and-trade market. The generic recommendations also are more lax than California’s. As a result, California may need to revamp its reporting rules to ensure compatibility with its partners if a regional climate change program goes forward, Tony Brunello, state Resources Agency deputy secretary for climate change and energy, said during an April 16 WCI stakeholder conference call. California needs to adjust it rules so they “support a [regional] cap-and-trade program,” Brunello said. The issue appears related to states’ differing emissions reporting systems--with some based on continuous monitoring versus others based on fuel type and use. However, like California, WCI’s draft greenhouse gas reporting rules would apply to both in-state power plants and out-of-state facilities. California representatives and their western counterparts are collaborating on a regional greenhouse gas reduction strategy to lighten the West’s carbon footprint. A plan is expected to be finalized this August. Brunello said that third party verification of global warming emission reports may not be mandated across the board in the West. Concern about the cost of mandatory reporting also is causing the WCI to shy away from reports for facilities below a certain emissions threshold. In addition, reports based on emission levels from continuous emissions monitors may not need to be reviewed by a third party verifier. The WCI representatives also are grappling with how to divvy up emission credits among the regulated community and marketplace under a regional cap-and-trade program. Auctions are expected to be used on a limited basis in the early years of a regional cap–and-trade market. The carbon cap would decline over time. Emission allocations would be divvied up among the participating states. Under the draft plan, each state and province would get a specified carbon budget and be accorded leeway on how to distribute the allowances within their borders, be it by auction, for free, or though a combination of free distribution and auction. The role for carbon offsets also is up in the air. One strategy under consideration would give priority to carbon offset projects in member states. “We need to flesh it out and make sure we are not creating barriers to other projects,” Brunello said. Like California, the WCI wants to avoid discrimination claims under the U.S. Commerce Clause. WCI is considering limiting the use of offsets to meet emissions reduction requirements because of differing standards and verification challenges Editor’s Note: For a more detailed report, please see our sister publication, Energy Meets Climate Challenge, E=MC2. It can be found at energymeetsclimate.com.

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Western Region GHG Plan Taking Shape

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