The conversation about how to respond to global climate change on a regional level gets down to brass tacks Thursday in Portland. Representatives of western states and provinces have gathered to design a cap-and-trade system to reduce greenhouse gas pollution.
What’s “cap-and-trade” mean? Correspondent Tom Banse sat down with Janice Adair to find out. The Olympia woman chairs the Western Climate Initiative.
At its most basic, cap-and-trade is pretty easy to grasp.
The government sets a limit on greenhouse gas emissions from a specific set of polluters. Each polluter starts with an allocation of allowed emissions. Then the government gradually cranks the limit down and the cutting and trading starts.
Janice Adair: “And if they get below their allocated cap, then they can sell that difference on the free market to someone who maybe couldn’t make those reductions at the same price for which they could buy that credit.
Tom Banse: Have all the participating states already agreed that cap-and-trade is their approach and authorized it?
JA: No, only California has authorized it. Washington will need to come back for legislative authority to do the cap-and-trade program and I think that is the case for all of our partners. But we have been directed by our governors and premiers to do this design work. So that is why this is the subject of the Western Climate Initiative.
TB: What are the most interesting or challenging elements you have to design?
JA: Oh gosh. That is a very long list because we are looking at all sources of greenhouse gas emissions. One of the things actually that we are trying to decide is what sectors should be included in a cap-and-trade program. That’s issue number one. Then how do you allocate the emission allowances out to these different sectors and then within the sector. The list of challenges is very long. It’s just a really interesting process. That’s one reason why we are expecting about 370 people today at this meeting.
TB: Is this best done on a regional level?
JA: It’s best done at a national level, without a doubt. The governors and premiers when they signed this collaboration were very clear about that. They support a national program. But in the absence of a national program, our governor and the other governors and premiers who signed this agreement felt it was very important to start moving down this road. It should allow us then working at this regional level – little bit smaller scale than national — to better influence what happens at the federal level by what we’ve learned in this process.
TB: What is the deadline to come up with this framework?
JA: August 26th, a day that is blazed in my mind. So we do have an awful lot to do.
TB: Are companies on the West Coast saying that they’re going to be at a disadvantage compared to companies/competitors in other states?
JA: There is some concern about that.
TB: Will cap-and-trade raise gasoline or electricity prices?
JA: It has that potential.
TB: How much?
JA: [laughs] Well, I don’t know any of us can know that because as we all know there are so many other factors that go into the price of gasoline and the price of electricity.
TB: Who will decide in the end where the cap is, how high or low?
JA: That’s part of the discussion that we’re having now. Of course, we’re only making recommendations from our group. We will make those recommendations to our governors and premiers. Ultimately the legislature will decide either that we’ve made the right recommendations or modify those.”
That’s Janice Adair. She chairs the Western states’ climate initiative and works for the Washington Department of Ecology. State policy makers are meeting face-to-face for one day with environmentalists and affected companies who range from Alcoa to Weyerhaeuser.