More states are expected to join the Western Climate Initiative – a consortium of six U.S. states and two Canadian provinces developing a regional carbon trading market – in the coming months, officials said today on a conference call. The WCI includes Arizona, British Columbia, California, Manitoba, New Mexico, Oregon, Utah and Washington. New members may come from the U.S., Mexican and Canadian states and provinces currently associated with the group as observers: Colorado, Kansas, Nevada, Ontario, Quebec, Saskatchewan, Sonora, and Wyoming. WCI officials said they were also open to the participation of Native American tribes, given that a number of power plants operate on tribal lands in the southwest U.S. Five states founded the WCI in February to adopt a regional greenhouse gas reduction target and a carbon trading market to achieve the goal.
Last week the group announced a regional target of reducing greenhouse gas emissions 15 percent below 2005 levels by 2020. (Individual states and provinces have set their own targets. Utah, for instance, won’t set a target until next year while California law requires the state to cut greenhouse gas emissions to 1990 levels by 2020.) The WCI also said that by August 2008 it will have designed a regional carbon trading market to allow those companies that reduce their emissions below the limit to sell credits to those that do not. WCI members on Wednesday’s conference call said the group has yet to decide whether the initial carbon allowances would be auctioned off or distributed. But WCI reps said mandatory corporate reporting of greenhouse gas emissions would likely be required.
The design of the so-called cap-and-trade system is being closely watched by the utility industry, judging by the representatives from companies like PG&E (PCG) and Southern California Edison (EIX) who joined the conference call held to provide an update on the WCI’s work.