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Overview of Western Climate Initiative WESTAR Fall Meeting October 2008

Overview of Western Climate Initiative WESTAR Fall Meeting October 2008. Initiative Collaboration Includes. Joint work to: Promote clean and renewable energy in the region Increase energy efficiency

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Overview of Western Climate Initiative WESTAR Fall Meeting October 2008

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  1. Overview of Western Climate Initiative WESTAR Fall Meeting October 2008

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. Design Recommendations • 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

  9. Design Recommendations • Allowance over-allocation minimized • Use of allowance values • Enforcement • Linkage to other systems • Acceptance of new partners • Regional administrative organization

  10. State and Provincial Decisions • Allocation of allowances • May standardize between sectors/jurisdictions • 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)

  11. Path Forward • Develop legislation 2009 session • Meeting with stakeholders and legislators • Develop 2009 work plan, including • 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

  12. What it means for Air programs • Quantification of emissions critical • 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

  13. www.ecy.wa.gov/climatechange/index.html

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