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Western Climate Initiative: status report New England Restructuring Roundtable Boston, MA December 5, 2008. Jeff Wennberg, Senior Consultant The Center for Climate Strategies.
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Western Climate Initiative:status reportNew England Restructuring RoundtableBoston, MADecember 5, 2008 Jeff Wennberg, Senior Consultant The Center for Climate Strategies
The Western Climate Initiative (WCI) was launched in February 2007 by the governors of Arizona, California, New Mexico, Oregon, and Washington, signaling a long-term commitment to significantly reduce regional greenhouse gas emissions. Since the WCI first formed, the states of Montana and Utah and the Canadian provinces of British Columbia, Manitoba, Ontario, and Quebec have joined the partnership. www.climatestrategies.us
WCI Quick Facts • The final recommended program design was released September 23, 2008; • GHG region-wide reduction goal: 15% below 2005 by 2020; • Will cover 90% of regional emissions when fully implemented; • The first compliance period is set to commence January 1, 2012; www.climatestrategies.us
WCI Quick Facts • Covered sectors include electricity, industry, transportation and residential and commercial fuel use; • The seven states and four provinces represent over 70 percent of the Canadian economy and 20 percent of the U.S. economy; www.climatestrategies.us
WCI and North America Population WCI includes Partners and Observers www.climatestrategies.us
WCI and North America GDP WCI includes Partners and Observers www.climatestrategies.us
WCI Sector Coverage The WCI cap-and-trade program will cover emissions of the six main greenhouse gases from the following sectors of the economy: • Electricity generation, including imported electricity • Industrial and commercial fossil fuel combustion • Industrial process emissions • Gas and diesel consumption for transportation • Residential fuel use www.climatestrategies.us
WCI Phase 1 • 1/1/2012 – 12/31/2014; First compliance period covered sources: • electricity, including imported electricity; • industrial combustion at large sources; • industrial process emissions for which adequate measurement methods exist. www.climatestrategies.us
WCI Phase 2 • 1/1/2015 – 12/31/2017; Second compliance period covered sources: • same as Phase 1, plus • transportation fuels; • residential, commercial and industrial fuels not otherwise covered. www.climatestrategies.us
WCI Electric Sector • The point of regulation is the First Jurisdictional Deliverer (FJD). • For sources within WCI jurisdictions, the FJD is the generator. • For power that is generated outside the WCI jurisdictions (or generated by a federal entity or on tribal lands) for consumption within a WCI Partner jurisdiction, the FJD is the first entity that delivers that electricity over which the consuming WCI partner jurisdiction has regulatory authority. www.climatestrategies.us
First Jurisdictional Deliverer Graphic by World Resources Institute www.climatestrategies.us
WCI Large Industrial Sector • The point of regulation will be at the point of emission; www.climatestrategies.us
WCI Small Industrial, Commercial and Residential Sectors • The point of regulation will be where the fuels enter commerce in the WCI Partner jurisdictions, generally at a distributor; • The precise point is to be determined and may vary by jurisdiction. www.climatestrategies.us
WCI Transportation Sector • The point of regulation will be where the fuels enter commerce in the WCI Partner jurisdictions, generally at the terminal rack, final blender, or distributor; • The precise point is to be determined and may vary by jurisdiction. www.climatestrategies.us
WCI Emissions Threshold • 25,000 metric tons of carbon dioxide equivalents (CO2e) or more; • Mandatory reporting data may be used to adjust this threshold for specific industries where necessary. www.climatestrategies.us
WCI Reporting • Mandatory monitoring for the six GHG gasses to commence January, 2010; • Reporting of 2010 emissions will begin in early 2011; • Entities subject to reporting are those with annual emissions of 10,000 metric tons of CO2e or more; • Third party verification of reported emissions required. www.climatestrategies.us
WCI Offsets • Use of offsets limited to no more than 49% of the total emission reductions by source; • Priority project types: • Agriculture (soil sequestration and manure management); • Forestry (afforestation/reforestation, forest management, forest preservation/conservation, forest products); • Waste management (landfill gas and wastewater management). • Partner jurisdictions may accept offset credits from developing countries through the Clean Development Mechanism (CDM) www.climatestrategies.us
WCI Banking and Borrowing • Banking is allowed without limit except to prevent market manipulation; • Borrowing is not allowed. www.climatestrategies.us
WCI Allowance Distribution • Auction a minimum of 10% (regionally) in 2012 (not binding on individual Partners); • Growing to 25% in 2020; • Partner jurisdictions may auction a greater portion; • Auctions will be regionally conducted. www.climatestrategies.us
WCI Preliminary Economic Modeling Results www.climatestrategies.us
WCI Work Moving Forward • Develop FJD model; • Set emissions caps and methodology; • Complete economic modeling; • Issue model reporting rule; • Develop regional auction design; • Develop early reduction recognition plan. www.climatestrategies.us
Florida • Governor’s Energy & Climate Action Team recommended observer status with RGGI and WCI (10-15-08); • Action Team recommended potentially joining both WCI & RGGI; • Florida 4th largest economy in U.S. • 2007 Population = 18,251,243 • 2007 GDP = $609,899 million • Projected 2020 economy-wide emissions equal 70% of California. www.climatestrategies.us
Florida www.climatestrategies.us
Questions? Western Climate Initiative www.westernclimateinitiative.org Jeffrey Wennberg 15 Grandview Terrace, Rutland, VT 05701, (802) 773-7297 wennberg.ccs@gmail.com Center for Climate Strategies www.climatestrategies.us www.climatestrategies.us
