Transcript Western Climate Initiative: status report

Western Climate Initiative:
status report
New England Restructuring Roundtable
Boston, MA
December 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.
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Western Climate Initiative
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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;
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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;
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WCI and North America Population
Population - 2007
WCI Population by Nation
80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
WCI Canada
Partners
WCI Mexico
Observers
WCI United States
North America Population
WCI Canada
WCI Mexico
WCI United States
Non-WCI
WCI includes Partners and Observers
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WCI and North America GDP
WCI GDP by Nation
GDP - 2007 US$ and CA$
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$WCI Canada
Partners
WCI Mexico
WCI United States
North America GDP
Observers
WCI Canada
WCI Mexico
WCI United States
Non-WCI
WCI includes Partners and Observers
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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:
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Electricity generation, including imported electricity
Industrial and commercial fossil fuel combustion
Industrial process emissions
Gas and diesel consumption for transportation
Residential fuel use
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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.
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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.
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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.
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First Jurisdictional Deliverer
Graphic by World Resources Institute
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WCI Large Industrial Sector
 The point of regulation will be at the
point of emission;
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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.
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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.
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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.
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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.
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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)
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WCI Banking and Borrowing
 Banking is allowed without limit except
to prevent market manipulation;
 Borrowing is not allowed.
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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.
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WCI Preliminary Economic
Modeling Results
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WCI Work Moving Forward
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Develop FJD model;
Set emissions caps and methodology;
Complete economic modeling;
Issue model reporting rule;
Develop regional auction design;
Develop early reduction recognition
plan.
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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.
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Florida
RGGI + Florida, Projected 2020 Power
Sector Emissions
DE
CT
ME
MD
NH
FL
NJ
NY
MA
RI
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Questions?
Western Climate Initiative
www.westernclimateinitiative.org
Center for Climate Strategies
www.climatestrategies.us
Jeffrey Wennberg
15 Grandview Terrace, Rutland, VT 05701, (802) 773-7297
[email protected]
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