Transcript Western Climate Initiative

Overview of Western Climate Initiative
WESTAR Fall Meeting October 2008
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Initiative Collaboration Includes
Joint work to:
– Promote clean and renewable energy in the region
– Increase energy efficiency
– Advocate for regional and national climate policies that are in the
interest of western states
– Identify measures to adapt to climate change impact
Three specific directives:
– Set a regional emissions reduction goal
– Join a multi-state registry to track, manage and credit reductions
– Design a regional multi-sector market-based mechanism
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WCI Design
• Most expansive cap and trade program to date
– All 6 primary greenhouse gases from all major
sources
– Nearly 90% of the region’s emissions by 2015
• Regional Greenhouse Gas Initiative (RGGI)
– CO2 from electricity only
– ~28% of emissions
• EU ETS
– C02 from electricity, industrial combustion and
process emissions
– ~40% of emissions
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Economic Modeling Results
• Possible to meet regional goal with modest
overall savings
• Complementary policies get us about ½ way to
target
– CA tailpipe standards
– 1% reduction in demand for electricity and gas
– 2% reduction in VMT
• Offsets, banking and broad scope all reduce
allowance prices
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What the Design Is and Isn’t
• It is
– the policy framework
– what must be the same between jurisdictions
for this regional program
• It isn’t
– the specific details; they will come through
legislative and rule processes
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Design Starting Point
• Firm 2020 emissions limit
– Based on individual State and Provincial
emissions goals
• Common approach to quantifying
emissions
• Individual State/Provincial programs
– Harmonized around essential elements
– Linked to create a regional trading market
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Design Recommendations
• Starting dates
– 2011 for reporting
– 2012 for cap and trade program
• Sectors, gases and thresholds
• Points of regulation
• Methodology for regional caps and partner
budgets
• Three year compliance periods
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Design Recommendations
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Unlimited banking; no borrowing
Essential reporting requirements
Early reductions allowances (ERA)
Offset criteria and protocols
Maximum level of offset credits
Regional auction process
Minimum auction levels
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Design Recommendations
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Allowance over-allocation minimized
Use of allowance values
Enforcement
Linkage to other systems
Acceptance of new partners
Regional administrative organization
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State and Provincial Decisions
• Allocation of allowances
– May standardize between sectors/jurisdictions
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Maximum percent of allowances auctioned
Use of most of the value of the allowances
Minimum offset credits allowed
Allowance set-asides
Recognition of early reductions (other than
ERA)
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Path Forward
• Develop legislation 2009 session
• Meeting with stakeholders and legislators
• Develop 2009 work plan, including
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Early Reduction Allowance criteria
Offset protocols and project types
Regional caps and partner budgets
Reporting essential elements and model rule
Auction design
Essential elements for cap and trade rules
Regional organization design
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What it means for Air programs
• Quantification of emissions critical
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Establishing regional caps
Setting partner budgets
Measuring reductions
Reporting across jurisdictions
Market confidence
• Market requires consistency, transparency,
enforcement
– Accurate and timely allowance tracking
– True up after compliance period
– Quick and sure enforcement
• And, likely yours to implement
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www.ecy.wa.gov/climatechange/index.html