NEW YORK - U.S states working toward a plan for the first mandatory carbon dioxide reductions from US power plants have missed a target to begin regulating emissions this spring but hope to finish an outline on how the program would work by the fall.
The Regional Greenhouse Gas Initiative (RGGI), a coalition of nine Northeast and Mid-Atlantic states, is trying to form a cap and trade market on carbon dioxide emissions, in the absence of mandatory emissions reductions at the federal level.
"This is a long process, I'm hoping it won't be a marathon," said Denise Sheehan, acting commissioner at New York's Department of Environmental Conservation, at a global warming conference on Thursday.
New York Governor George Pataki, a Republican, kicked off RGGI in 2003. It is the biggest effort by US states to form a market similar to those already trading in nations that adopted Kyoto.
In cap and trade markets, like those already formed on emissions that cause acid rain, businesses must either trim emissions under set limits, or buy credits from companies that have complied with those limits.
President George W. Bush pulled out of greenhouse gas reduction plan the Kyoto Protocol in 2001, saying it was expensive and wrongly excluded developing nations from a first round of cuts in emissions. Bush said he prefers voluntary emissions cuts over mandatory greenhouse regulations.
Many scientists believe gases such as carbon dioxide warm the Earth by trapping heat from the Sun in the atmosphere. Warmer temperatures can trigger more frequent floods and droughts, endangering low lying areas and agricultural lands. Others say weather is too hard to predict.
KEY ISSUES
Sheehan said once a model is adopted each state will then have to approve the plan. RGGI hopes to launch the market in 2008 to 2009.
Key issues the states are debating include whether to hold emissions at current levels or cut them by 10 to 15 percent from current levels.
When and whether to distribute "early action" allowances to utilities that reduce emissions before the market is launched, is another top issue. RGGI had hoped to launch those allowances this spring.
More than 200 financial institutions in the United Nations Financial Initiative are interested in the risks and opportunities of global warming.
Helen Sahi, a vice president for sustainability programs at Bank of America,was cautiously optimistic about RGGI but said investors find it easier to work with nationwide regulations.
Susan Tierney, a principal with strategy consultants the Analysis Group, said RGGI was a "stepping stone" to get to "the prize" of a national global emissions market.
Story by Timothy Gardner
REUTERS NEWS SERVICE
