Northeast and Western states to test carbon trading in regional markets

News Update: Ten Northeast states have launched the nation’s first cap-and-trade system, raising $38.5 million for renewable energy and efficiency. It applies to electric utilities and about 90% of the allowances will be auctioned. The goal of the Regional Greenhouse Gas Initiative (pronounced “Reggie”) is to cut CO2 emissions 10% between 2014-18. There is a problem, though. The cap, set several years ago as the plan was being developed, may be too high to make much difference. GHG emissions in the region have leveled off in recent years instead of growing as expected. So the cap is higher than current usage. Some say the states may need to set a new, lower cap. Meanwhile, in the West, 7 states and 4 provinces across Canada unveiled a blueprint for a similar plan. The Western Climate Initiative aims to cut emissions 15% below 2005 levels by 2020. The Western plan would be economy-wide, including industry, transportation and homes. In a concession to industry, it plans to auction only 10% of allowances, giving the rest free to polluters and causing concerns some businesses could make windfall profits, as happened in the initial European plan. While both regional plans seem to be imperfect, California Gov. Arnold Schwarzenegger said the states are moving ahead where the federal government had failed to act. (Sources: ClimateWire, New York Times, AP)