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United States

Mandatory emissions targets proposed -- States and industry take initiatives to fill void of federal inaction

More fuel has been added to the growing debate over whether the Bush administration's decision to abandon the Kyoto Protocol and adopt a voluntary approach to tackling climate change goes far enough. Last month two prominent senators unveiled a bipartisan plan which could force the entire US industrial sector to reduce emissions of greenhouse gases.

The draft bill, introduced by Democrat senator Joseph Lieberman and Republican senator John McCain, proposes mandatory economy wide reductions in emissions of carbon dioxide and other gases that contribute to global warming. It also sets out a market-based emissions trading system to give companies "maximum flexibility" in meeting emissions goals. Wind, as one of the cheapest ways to replace emissions laden generation from fossil fuel sources, could flourish in such a market.

"By capping emissions and tapping market forces to meet those goals, this bill will heat up American innovation and cool down our changing climate," says Lieberman, who is a candidate for the Democrat nomination to run for president in 2004. "Our approach promises environmental progress in reducing harmful global warming, economic progress by creating new high-tech jobs to meet emissions goals, and international progress by showing our allies that we're very serious about this global problem."

Under the plan, companies are required to cut greenhouse gas emissions to 2000 levels by 2010 and make further reductions to 1990 levels by 2016. The bill is directed at emissions from the electricity generation, transportation, industrial, and commercial sectors, which together account for 85% of overall US greenhouse gas emissions. It would only apply to entities that emit more than 10,000 tonnes of greenhouse gases a year.

Part of a trend

The proposal received wide-ranging support from sections of the serious press, including the Washington Post and The Economist. But is likely to face resistance from the Bush administration, whose domestic climate plan sets voluntary targets for reducing the growth in greenhouse gas emissions. "That is a pity," writes The Economist, which suggests that Bush's policy may now be "undermined" by a number of initiatives outside the White House to fill what Eileen Claussen, president of the Pew Center on Global Climate Change, calls "the void left by inaction at the federal level." The Pew Center is backed by a series of large companies such as Boeing, BP and Shell.

Some of the most aggressive moves are being made at state level. "In fact, the recent state leadership in addressing climate change has been striking," Claussen told a January Senate Commerce Committee hearing held to discuss the McCain-Lieberman bill. "At least two-thirds of the states have programs that, while not necessarily directed at climate change, are achieving real greenhouse gas emission reductions."

New Hampshire and Massachusetts have recently started directly regulating carbon dioxide emissions from power plants. Nebraska, Illinois, North Dakota, Oklahoma, and Wyoming are taking steps to allow farmers to sell sequestered carbon as a commodity. California has passed a law to regulate emissions of CO2 from cars starting in 2009, and in his January State of the State address, the Republican governor of New York, George Pataki, declared his state would follow suit. In addition, 14 US states have adopted renewables portfolio standards to increase the proportion of clean power on their transmission grids.

But even as they act, some states have warned that without a strong national approach to climate change, the US risks creating a patchwork of regulations that will increase business uncertainty and, ultimately, the cost of addressing climate change. Last summer, attorneys-general from 11 states, all Democrats, urged Bush to reconsider his position (Windpower Monthly, August 2002). "We agree that the global nature of the climate change problem would be most efficiently addressed by comprehensive regulatory action at the national level," they stated.

Voluntary action

While the political debate rages, a growing number of US companies are voluntarily committing to greenhouse gas reduction targets. At last count, says Claussen, the Pew Center had identified more than 40, most either based in the US or with significant US operations. The companies are motivated by several things, she says, including a belief that the public will demand strong climate protections and "they can get ahead of the curve by reducing their emissions now." They also want to encourage government policies that will work well for business, she adds.

Developing market-based solutions to greenhouse gas reduction was behind the January launch of the Chicago Climate Exchange (CCX), a voluntary cap-and-trade program designed to allow participating companies to experiment with buying and selling emissions reduction credits. Trading under the four year pilot will begin this spring.

The 14 industrial giants that founded the exchange, which include DuPont, Ford Motor Co, Motorola and American Electric Power, have made what they call a "legally binding commitment" to reduce their emissions of greenhouse gases by 4% below the average of their 1998-2001 baseline by 2006.

Tremendous leadership

"These companies have demonstrated tremendous leadership," says CCX chief executive Richard Sandor. "They really believe that a proactive approach to climate change advances everyone's long term interests. It's simply good business."

Like Bush, however, companies participating in the exchange stressed the voluntary approach. "Through CCX, we hope to demonstrate the viability of a multi-sector greenhouse gas trading program," says American Electric Power's Dale Heydlauff. "CCX also serves as a mechanism for the company to participate in the Bush administration's voluntary climate change program."

Meanwhile, the McCain-Lieberman bill is not the only climate change related legislation before the Senate this session. Jim Jeffords, outgoing chairman of the Senate environment and public works committee, and Tom Daschle, Senate minority leader, have also introduced a bill they say will force the US "to begin responsibly addressing global climate change."

Their plan includes proposals to direct the president to lower the federal government's greenhouse gas emissions to 1990 levels by 2013 and to require that climate impacts be considered as part of environmental reviews for federal projects or actions.

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