On November 25, six of the remaining seven U.S. states turned in their walking papers, entirely dropping out of the Western Climate Initiative (WCI), leaving California as the only participating U.S. state. California, along with four Canadian provinces - British Columbia, Manitoba, Ontario and Quebec - remain with the proposed carbon trading initiative. Even British Columbia has not committed itself to joining WCI's cap-and trade system. According to the WCI, the exit of Arizona, Montana, New Mexico, Oregon, Utah and Washington was expected, as the states were unlikely to implement a cap-and-trade program.

WCI was formed in 2007 with the intent of reducing regional GHG emissions to 15 percent below 2005 levels by 2020. The group identified cap-and-trade as a means of achieving the reductions, beginning a multi-year process of designing a regional system of tradable permits, but the economic recession that began in 2008 ultimately sapped the political appetite for a national cap-and-trade – a fact that California’s Air Resources Board continues to ignore or downplay.

Most of the states leaving the WCI have cited the harm that a cap-and-trade regulation would inflict on their economies, putting their states at an economic disadvantage. They recognize that the WCI rules would have created an uneven playing field for businesses, subjecting them to more stringent regulations than their competitors in surrounding states.

The formal withdrawals come only days after WCI announced the formation of a non-profit organization to administer the WCI greenhouse gas cap-and-trade program and service its technical needs. Arizona and the other U.S. states formerly associated with the WCI have now clarified that they are no longer associated with the organization, but they will work with 13 other states and four Canadian provinces in a new initiative called North America 2050, which aims to spur energy innovation and create economic opportunities while reducing carbon emissions.

North America 2050 aims to collaborate on topics such as exploring carbon capture and sequestration and developing high quality offsets that may be used in emissions trading programs.

Article written by John Larrea, Government Affairs Director

California League Of Food Producers