Six US states leave the Western Climate Initiative
Washington (Platts)--18Nov2011/415 pm EST/2115 GMT
Six states have withdrawn from the Western Climate Initiative,
leaving California and four Canadian provinces as the remaining members of
the regional greenhouse gas reduction organization, Patrick Cummins, WCI's
project manager, said Friday.
Besides California, the remaining WCI members are the Canadian provinces
of British Columbia, Manitoba, Ontario and Quebec.
The exit of Arizona, Montana, New Mexico, Oregon, Utah and Washington
mostly was expected, as the states were seen as unlikely to implement a
cap-and-trade program, observers said.
"News about the departure of the six states comes as no real surprise,"
said Jeff King, the head of environmental markets at Scotia Capital. "There
was little to no hope that they'd get involved in a regional cap-and-trade
program given the current political make-up of the states."
Article continues below...
Request a free trial of: Electric Utility Week
Electric Utility Week focuses on the fundamental news that matters to utilities, including: the state of utility industry earnings, stock prices and strategies, regional grid organizations, prospects for transmission investment, new areas of opportunity like broadband-over-power-line service.
WCI was formed in 2007 with the intent of reducing regional GHG
emissions to 15% below 2005 levels by 2020. The group identified
cap-and-trade as a means of achieving the reductions, beginning a multi-year
process of designing a regional system of tradable permits.
But the economic recession that ensued beginning in 2008 ultimately
sapped much of the political appetite for cap-and-trade.
Meanwhile, new governors who adamantly objected to a cap-and-trade
agenda were elected in Arizona, New Mexico and Utah, while legislatures in
Oregon, Washington and Montana failed to advance cap-and-trade bills.
Susan Martinez, who was elected last year as New Mexico's governor, was
a vocal opponent of the cap-and-trade policy that her predecessor, Bill
"Cap-and-trade regulations passed during the Richardson administration
put the state [at] an economic disadvantage," Jim Winchester, communications
director of the New Mexico Environment Department, said in a statement. "The
rules create an uneven playing field for [New Mexico] businesses, which are
now subject to more stringent regulations than their competitors in
Another strong critic has been Arizona Governor Jan Brewer, who became
governor in 2009 following the Janet Napolitano's resignation to serve as
head of the US Department of Homeland Security, and was elected in her own
right in 2010.
"Arizona believes there are more effective, responsible ways to realize
the environmental and health benefits the WCI program seeks to achieve while
avoiding the economic costs to industries that are subject to cap-and-trade,"
Henry Darwin, Arizona Department of Environmental Quality director, said in a
Eroding support for cap-and-trade among WCI members was foreshadowed
by former Utah Governor Jon Huntsman. Huntsman, speaking in 2008, said a
regional approach is "probably long-term unsustainable."
Climate change policy must ultimately be coordinated on a federal level,
Indeed, part of the motivation behind creating the WCI, as well as a
similar organization in the Northeast and Mid-Atlantic, was to gain
experience ahead of a national cap-and-trade program.
That justification dwindled along with the prospects of Congress passing
such legislation anytime soon.
Still, some support for cap-and-trade remains. California plans to start
a cap-and-trade program in 2013, while British Columbia, Ontario and Quebec
are moving forward with programs that can be linked with California.
The six states leaving WCI have joined a new organization called
North America 2050, a GHG-reduction group that says it will push for
cost-effective policies, including carbon capture and sequestration,
developing offset projects to be used in emissions trading programs and
promoting sustainable biomass.
--Geoffrey Craig, firstname.lastname@example.org