US states defy Bush with carbon trading
plan
By Saeed Shah
Nov. 12 — Individual US states are putting together a system
to cap and trade greenhouse gas emissions, despite the Bush administration’s
opposition to the Kyoto protocol on global warming.
The regional-level initiative, led by the Governor of New York state,
George Pataki, aims to be able to announce the details of a plan by
April. The nine states in the project, which is known as the Regional
Greenhouse Gas Initiative (RGGI), are Connecticut, Delaware, Maine,
Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and
Vermont. Maryland, the District of Columbia, Pennsylvania, and some
eastern Canadian states have signed on as “observers” in the
process.
The plan could even link up with the emissions controls and trading
system being established by the European Union (EU) next year, allowing
emission allowances to be traded across the Atlantic. It is understood
that informal talks have taken place between environmental officials
of the US states and their European Commission counterparts.
The development will prove a major embarrassment to the Bush government,
which provoked considerable condemnation in 2001 by pulling out of the
1997 Kyoto climate control treaty. Many believe that the Bush administration
had hoped to kill off Kyoto by opposing it. However, the recent decision
by Russia to sign up has meant that the treaty has been saved.
Some insiders even believe that unilateral action by US states will
eventually force Bush to join Kyoto, by showing that it can work in
the US.
Peter Vaborowsky, a managing director at Evolution Markets, a brokerage
that specializes in the environmental markets, said: “There’s
no question that this turns up pressure on the federal government ...
in the past when individual states have taken action on other pollutants,
the federal government has then taken action.”
Environmental officials from the nine states met in New York Nov. 12,
to try to thrash out some of the remaining technical issues yet to be
resolved. It is hoped that the cap and trade plan can be operational
by 2007 or 2008.
Like the EU, the US states are taking a market-based approach to curbing
emissions of carbon dioxide, the greenhouse gas blamed most for global
warming.
Industries covered by the plan will be allocated emission allowances,
in units of one ton of CO2 produced. Polluters can either try to reduce
emissions or buy the allocations on a market of others which have.
It is thought that, as the US is outside Kyoto, Europeans will be able
to sell US industries their allocations but the US allocations are unlikely
to be recognized as a Kyoto-currency and so cannot be sold to the Europeans.
The US sulfur dioxide and nitrogen oxide emissions, which cause acid
rain and smog, are federally regulated and traded. However, there is
no federal regulation of CO2 emissions. The Kyoto treaty aims to reduce
greenhouse gas emissions from industrialized countries by five percent
over the next decade.
Source: Independent (UK)
