As prospects for a U.S. national climate change bill looks less and less promising, five U.S. states and Canadian provinces are moving forward with plans to establish a regional cap-and-trade market in 2012 for reducing greenhouse gas (GHG) emissions, reports Reuters. The market would be about a tenth of U.S. emissions.
California, with the eighth-largest economy in the world and plans to cut emissions 30 percent by 2020, New Mexico, and the Canadian provinces of Ontario, British Columbia and Quebec will work together to establish a system that will be about four times larger than the U.S. cap-and-trade system in the Northeast — the Regional Greenhouse Gas Initiative, according to the article.
The Western Climate Initiative initially had more participants but Arizona dropped out and Washington and Montana failed to get necessary legislative approval, reports Reuters.
Business Week is also reporting that the Utah Legislature just passed a resolution to pull out of the Western Climate Initiative. Plus there is some disagreement across the states as to whether cap-and-trade will actually drive job creation and what kind of impact it will have on the economy.
One of the biggest concerns is the price of carbon, reports Reuters.
The Regional Greenhouse Gas Initiative is trading carbon at just above $2 per ton, while a 2008 analysis pegged the carbon price at $24 per ton in the western U.S. A revised projection is expected, according to the article.