Utah and other members of the Western Climate Initiative on Tuesday announced support of an emissions-trading plan to reduce greenhouse-gas emissions in the West.
After 18 months of discussions and public meetings, the coalition released what it calls its design recommendations for a cap-and-trade system. The coalition, which was established last year, includes seven Western states and four Canadian provinces.
"We're sending a strong message to our federal governments that states and provinces are moving forward in the absence of federal action, and we're setting the stage for national programs that are just as aggressive," California Gov. Arnold Schwarzenegger said in a statement.
But some environmental groups said the recommendations don't go far enough and put too much control in states' hands. Business groups contended that Utah, with most of its energy coming from coal-fired power plants, would shoulder too much of the burden to reduce emissions in the region and then pass the cost on to consumers. Some Utah lawmakers also worried about the recommendations' potential impact on Utah businesses.
House Speaker Greg Curtis, R-Sandy, called reducing emissions a "laudable" goal. "But we need to make sure we don't just wholesale forget about the economic impacts and the energy impacts of the policies we advance," he said. "Doing it at the stake of driving away jobs and driving down the economy is something we need to be very mindful of."
Senate President Jon Valentine, R-Orem, said he feared a carbon-trading program might put the state's businesses at a disadvantage in a global economy.
"We want to make certain we do not unnecessarily harm Utah businesses," Valentine said Tuesday. "You can end up with such an aggressive approach that it hurts businesses in Utah and makes us not competitive."
Dianne Nielson, Gov. Jon Huntsman Jr.'s energy adviser, said the coalition's recommendations mark the start of discussions at the state level "that will continue with our Legislature and stakeholders to ensure the design works for Utah."
Nielson said the next step will be to form a task force to figure out what type of legislation will be required to implement the coalition's recommendations. "We're going to take a year, work with stakeholders, with legislative leaders, and figure out the best way to accomplish this and then deal with this in the 2010 legislative session," she said.
Only states' legislatures and regulatory agencies, not the coalition, have the power to enact or enforce the recommended emissions changes.
The coalition has focused on a "market-based" cap-and-trade system intended to dramatically cut climate-changing emissions. The Northeast and Midwest also have a similar Regional Greenhouse Gas Initiative.
Nielson said the Western initiative gives Utah a "critical" seat at the regional table to communicate a need for all energy resources while maintaining the state's coal-powered viability in a changing market.
The first phase of the cap-and-trade program is expected to begin Jan. 1, 2012, with coalition partners agreeing to begin reporting emissions in 2011 for emissions that occurred in 2010. A cap system for transportation fuels would be put in place in 2015.
The gases covered by Tuesday's recommendations are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. Emission sources include electricity generation, combustion at industrial and commercial facilities, and oil- and gas-process emissions.
The recommended strategy would limit emissions from major sources of greenhouse gases, while providing flexibility and economic benefits intended to spur continuous innovation of clean technologies, the coalition said.
The Environmental Protection Agency defines a cap-and-trade program as a means to limit overall emissions. Emitters would be allowed to release only a certain amount of pollutants. Emitters that stayed below their emissions limit and didn't use all of their allowances would be allowed to sell off the remaining allowances to other emitters that were either unable to meet their own limit or who found it cheaper to buy allowances instead if installing new pollution-control equipment.
Britt Weygandt, executive director of the Colorado-based Western Business Roundtable, said Tuesday in a prepared statement that Utah, which gets 90 percent of its electricity from coal-fired power plants, would need to do more to meet the limits than California, which gets less than 30 percent of its electricity from coal-fired power plants. Power companies would pass the costs of purchasing and installing pollution controls on to consumers, he said.
"Thus, Utah consumers will be forced to bear a disproportionately higher burden under this regulatory approach than will California consumers," Weygandt contended.
But Utah Department of Environmental Quality Executive Director Rick Sprott said Utah is in a position to provide leadership in the West and nationally to increase energy efficiency.
"This market-based approach can help achieve the reductions that are needed to meet Utah's goal of reducing our emissions to 2005 levels by 2020," Sprott said. The Western coalition's regional goal is to reduce emissions to 15 percent below 2005 levels by 2020.
Sen. Michael Waddoups, R-Taylorsville, said he's not a big believer in a cap-and-trade system that lets some polluters with money to spend on credits slip by without doing their share of reducing emissions.
"Everybody should be trying to cut back, not just find a way financially to continue to pollute," said Waddoups, a member of the Natural Resources, Agriculture and Environment committee. National Wildlife Federation regional outreach coordinator Doug Howell said Tuesday that the coalition's recommendations "did not send a strong enough signal that the interests of the public need to come before the interests of polluting industries."
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