Midwestern States Complete Recommendations for Regional Cap-and-Trade

This week an advisory group appointed by six Midwestern governors released recommendations for a regional emissions cap-and-trade system.

In 2007 the governors of Illinois, Iowa, Kansas, Michigan, Minnesota, Wisconsin and the premier of Manitoba agreed to establish greenhouse gas reduction targets and design a cap-and-trade system under what is called the Midwestern Greenhouse Gas Reduction Accord. Representatives from utility, agriculture, industrial and environmental interests has been working on a plan since that time.

The recommendations call for a nearly 20% reduction in greenhouse gas emissions from 2005 levels by 2020, with an 80% reduction by 2050.

Following other regional carbon-trading agreements in the western and northeastern U.S., this is the first to address the  climate challenges faced in America’s heartland, according to the World Resources Institute (WRI) which advised on the recommendations.

In the Northeast, the Regional Greenhouse Gas Initiative (RGGI) caps carbon-dioxide emissions from large electric utilities in 10 eastern states with a goal of reducing emissions by 10% by 2018. The Western Climate Initiative (WCI) is a cap-and-trade program covering various industries in seven western states and four Canadian provinces. WCI released its design last fall.

WRI said the Midwestern program’s design will focus on promoting carbon sequestration through good agricultural practices, investment in carbon capture and storage, and energy efficiency.

“If a cap-and-trade program can work for the midwestern, northeastern and western regions, it can also work for the entire country. These agreements should form the basis of a federal greenhouse gas emissions market under the Obama administration,” aid Franz Litz, senior fellow at WRI. “WRI’s climate policy experts will continue to work with both state governments and federal policy makers to develop a program design that works nationwide.”

The Midwestern group will send its recommendations to the U.S. Congress, in hopes that they will be incorporated into the development of a federal cap-and-trade system. However, should Congress fail to act, the recommendations outline a plan for implementation beginning in 2012.

Jesse Heier, a spokesman for the Midwestern Governors Association, said "We realized that if we didn’t participate, the coasts were going to decide what climate change policy will look like."

The governors of Indiana, Ohio, South Dakota and the premier of Ontario are officially observers to the Accord.

The recommendations are available at the website below.

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