An increasing number of U.S. states and Canadian provinces are enacting regulations to limit greenhouse gas (GHG) emissions. WRI has been an active contributor to this movement, providing critical technical and policy advice, and facilitating negotiations.
Arizona, California, Montana, New Mexico, Oregon, Utah, Washington, and four Canadian provinces recently agreed to collectively reduce GHG emissions by 15% of 2005 levels by 2020 and establish a cap-and-trade system. Under the plan, companies obtain permits for the emissions attributable to their operations. Cleaner, more efficient companies needing fewer permits may sell what they don’t need to those with larger emissions. This initiative is the largest effort of its kind in North America. Member states account for nearly 27% of total U.S. GHG emissions. Iowa, Illinois, Kansas, Michigan, Minnesota, and Wisconsin, along with Manitoba, have also agreed to design an emissions reduction market.
Both efforts build off of the experiences of the Regional Greenhouse Gas Initiative, a similar program among ten northeastern states targeting electric utilities that WRI helped create in 2005. Carbon trading began in September 2008.