Western Climate Initiative Final Plan Announced
The release of the Western Climate Initiative’s (WCI) final plan for a regional carbon cap and trade system marks an important interim step in Oregon’s long history of leadership on clean energy and global warming.
The release of the Western Climate Initiative’s (WCI) final plan for a regional carbon cap and trade system marks an important interim step in Oregon’s long history of leadership on clean energy and global warming. Over the last year, seven Western Governors and four Canadian Premiers have diligently developed the basic framework of a program that seeks to pave the way to meaningful reductions in global warming pollution. The framework also acknowledges the need to reform the Western economy through advancing energy efficiency and renewable power, protecting consumers against escalating prices of fossil fuels and generating thousands of new, long-term, well-paying jobs.
The Oregon Environmental Council, Citizen’s Utility Board of Oregon, Climate Solutions, Renewable Northwest Project, Interfaith Power and Light and the Douglas County Global Warming Coalition commend Oregon Governor Kulongoski for his commitment to providing leadership among the Western States and for his commitment to laying the groundwork for a new energy economy which reduces global warming pollution. While other regional and international carbon cap and trade systems are already in place, namely the European Union’s Trading Scheme and the Northeast Regional Greenhouse Gas Initiative, the WCI is the first of a new breed. The WCI will serve as an important model for a future cap and trade system at the national level and appropriately take into account the higher mix of clean electricity resources from states like Oregon and Washington.
Several markers distinguish the WCI from its predecessors. First, the WCI is economy wide meaning that it covers greenhouse gas emissions resulting from electricity generation and heavy industry, as well as emissions tied to the extraction of oil and gas, transportation fuels and commercial and residential heating fuels. An economy-wide scope will prevent any one sector from bearing the brunt of carbon regulation. WCI also establishes a point of regulation which accounts for all emissions in the electricity sector, whether they originate within or outside of the WCI jurisdictions. The trading mechanism provides compliance flexibility to emitters while ensuring the most cost-effective reductions are acquired first. And most importantly, there is a steady, predictable decrease in emissions allowed through a declining cap set at 3-year intervals providing investment predictability to businesses, and energy cost stability to businesses and households.
While the WCI plan is not perfect, it does provide a minimum framework for the participating states and provinces to follow. We strongly encourage participating states like Oregon to adopt a stronger standard in certain areas. For example, the minimum standard set for allowance auctioning (10%) is too low and risks delivering windfall profits to the biggest emitters while shortchanging Oregonians with a smaller revenue stream earmarked for energy efficiency programs, bill-paying assistance for low-income populations, worker retraining and education and renewable energy generation and infrastructure. As well, the extent to which offsets can be applied to compliance obligation is still high enough to cause concern that the majority of reductions could occur outside of capped sector and would be difficult to verify. We are committed to working with Governor Kulongoski and the Legislature to strengthen these provisions as they move to authorize Oregon’s participation in this innovative new regional carbon market.
Today is a significant day. We congratulate the Western States for their hard work in setting out a broad framework for a regional cap and trade system which builds on other regional approaches. Notwithstanding the additional design work that is needed, the WCI plan represents a remarkable political achievement and demonstrates the potential for future collaboration, not just within the WCI, but in Washington, D.C. as we look to Congress to eventually take up a serious debate around a national carbon reduction program. Western and Canadian leaders, each representing a diverse set of interests and political views, were able to work through their differences and find agreement on mandatory cuts in global warming pollution. Oregon’s residents, businesses and elected officials have a strong history of leadership in reducing global warming pollution. We are confident that the end product will be one that Oregonians will support and take pride in.
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