Western state planners developing a regional, market-based approach to
cut greenhouse gas emissions on Wednesday aired a work plan that underscores
the complexities involved with bringing the plan to fruition.

Arizona, California, New Mexico, Oregon, Utah and Washington, along with
Canadian provinces British Columbia and Manitoba, in February agreed to cut
GHG emissions from all sectors of the economy to 15% below 2005 levels by
2020.

Unlike the Regional Greenhouse Gas Initiative, a GHG reduction effort
undertaken by states in the Northeast that is aimed solely at power plant
emissions, the western initiative would seek to limit emissions that
contribute to global warming from all sources, including energy supplies,
transportation, and the commercial, residential and industrial sectors.

When ssked how the plan will deal with allocation of emission allowances,
Steve Owens, co-chair of the initiative, said planners do not yet have the
answer. "There is a long list of issues we have to address," Owens said during
a Wednesday conference call with stakeholders.

While many questions need to be answered, Owens stressed that a
cap-and-trade system will be the favored market approach. "The only real issue
is what type of cap-and-trade program it will be," he said.

The work plan asks stakeholders to weigh in on myriad issues, including
the program's scope and timing, appropriate cap levels, and the role of
offsets. Design principles that are part of the work plan call for a program
that "covers as many sources as practical" while encouraging pollution
reductions beyond the capped sources and sectors.

A key goal is of the initiative is to develop recommendations for a
regional cap-and-trade program by next August. A workshop to discuss program
options is scheduled for January, 2008.