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California, New Mexico and 3 Canadian provinces outline regional cap-and-trade program

The Western Climate Initiative would cut greenhouse gas emissions 15% below 2005 levels by putting restrictions on the energy sector, large industrial plants and transportation.

July 28, 2010|By Margot Roosevelt, Los Angeles Times

California, joined by New Mexico and three Canadian provinces, outlined a detailed plan Tuesday to curb greenhouse gas emissions in a regional cap-and-trade program by January 2012.

The Western Climate Initiative, if it survives political hurdles, would be three times larger than an existing trading system for power plants in 10 Eastern states. It would cover not just the electricity sector, but most large industrial plants as well as transportation.

Such state efforts are moving to the forefront just as national legislation to curb global warming pollution has stalled in Congress.

However, implementation of the initiative by each state or province is by no means assured. A measure on California's November ballot, funded mainly by two Texas oil companies, would indefinitely delay AB 32, the state's 2006 Global Warming Solutions Act. That would nix the state's plans to curb greenhouse gas emissions through a cap-and-trade system.

California GOP gubernatorial candidate Meg Whitman has said she would delay AB 32 by a year if elected.

Under a cap-and-trade system, industries would purchase allowances for the tons of carbon dioxide they emit. Factories that cut emissions below their designated caps could sell excess allowances to other companies or bank their allowances for future use — thus cutting their costs.

The goal is to reduce carbon dioxide and other heat-trapping emissions that scientists say are causing dangerous disruptions in the world's climate. State officials project that rising sea levels and melting snowcaps as the climate warms will have a dramatic effect in California, where much of the population is concentrated on the coast and where water from snowmelt is critical to the agricultural economy.

Eventually, the California-led initiative could link to the Eastern trading system and a proposed Midwestern pact. Together, they could provide a foundation for a future federal cap-and-trade program if political obstacles in Washington could be overcome.

As the nation's most populous state and the world's eighth-largest economy, California wields significant influence. International and national controls are needed to curb global warming, Gov. Arnold Schwarzenegger said Tuesday, "but California and the rest of the Western Climate Initiative partners are not waiting to take action."

The Western initiative would cut emissions 15% below 2005 levels. It would transition the region to "a green economy that will reduce our dependency on oil, increase our energy security and create jobs and investment now," Schwarzenegger said in a statement.

The trading program would allow companies to meet targets by purchasing less expensive "offsets" from forests, agriculture or garbage dumps when companies in those sectors store carbon dioxide beyond what they would have emitted in the normal course of business.

The Western Climate Initiative was launched in 2007 with seven U.S. states and four Canadian provinces. But only California, New Mexico, British Columbia, Ontario and Quebec are on track to adopt the regulations necessary to implement the plan by 2012.

Arizona, Utah, Washington, Oregon, Montana and Manitoba have delayed participating as opponents have claimed that the initiative would increase energy costs. A recently updated economic study by the partners, however, found that fuel cuts spurred by the program would result in a net savings of $100 billion by 2020.

margot.roosevelt@latimes.com

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