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US Regional Carbon Cap and Trade Groups - Solving a Regional Problem with a New Approach

By BBJ Group | January 08, 2020

U.S. Regional Carbon Cap and Trade Groups – Solving a Regional Problem with a New Approach

Written by Richard Garlitz, P.E., Senior Engineer, who leads BBJ Group's Pittsburgh Office

With international and national carbon reduction initiatives stalled under the weight of special interest lobbying, governmental resistance to change and public division on the correct remedy, some groups of states have organized regional climate change action groups such as the following:

The Western Climate Initiative (formed by seven western US states and four western Canadian provinces) has established a goal of reducing greenhouse gas emissions by 15% from 2005 levels by the year 2020.  A side effect generated directly from these goals has been the California Clean Car Standard, which is being debated by all participating states and provinces.   

The Midwestern Regional Greenhouse Gas Reduction Accord (formed by Illinois, Iowa, Kansas, Michigan, Minnesota, and Wisconsin with Indiana, Ohio and South Dakota participating as observers) has a stated long-term goal of reducing greenhouse gas emissions by 60-80% from 2007 levels.  This group is in the process of developing a market-based, multi-sector approach to the reduction of greenhouse gas emissions.

The Regional Greenhouse Gas Initiative (RGGI), formed by ten Northeastern and Mid-Atlantic states, was established in 2008 as a market-based cap and trade program.  This group covers only electrical generation at this time but established a goal to reduce greenhouse gas emissions from power generation facilities by 10% by 2018.  This cap and trade approach used a combination of auction to distribute the emission allowance with only a small amount of fixed-price sales or direct allocations. This approach introduces market forces into the system which results in a sense of urgency as well as to motivate stakeholders to get creative with greenhouse gas reduction strategies.   

These groups are examples of how when public opinion is disregarded at the international and federal levels, states, or in this case groups of states, can work together to come up with solutions that are seemingly unsolvable.  While the progress of these groups is slow and often very uneven, it is probably the best way to solve the greenhouse gas emission reduction problem, at least in the United States.  These groups can work on legislation and standards unencumbered by the machination of the two- and four-year political cycles that most major legislation is trapped in.  Something this important must not be rushed and must not be diminished or moved out of focus by the typical political wrangling that goes on with other legislation. 

shutterstock_564740293Of local note, Pennsylvania’s governor and state legislature are considering a proposed a bill that, if enacted as proposed, would make Pennsylvania carbon neutral by midcentury.  Pennsylvania, a historically coal-burning, steel-producing, manufacturing-dependent state, is getting serious about greenhouse gas reduction and is proposing a cap and trade approach to meeting its greenhouse gas reduction goals.  The proposed approach would be market-based and multi-sector with very few exemptions or carve outs anticipated.  The proof will be in the final legislation but if the initial proposal is to be taken seriously, Pennsylvania could be well on its way to establishing its own cap and trade system for addressing the reduction of greenhouse gases.    





Topics: Global, Carbon Cap, Greenhouse Gases, Emissions

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