Apr 04 - By Dirk Meissner, THE CANADIAN PRESS

California Gov. Arnold Schwarzenegger's green team has taken notice of British Columbia's plans to fight climate change, lauding legislation that makes the province the first in Canada to introduce a cap-and-trade system to reduce greenhouse gas emissions.

The day after B.C.'s Liberal government introduced its cap-and-trade legislation, Schwarzenegger's Environmental Protection Agency said Friday it was pleased with the province's efforts to support innovative solutions to fight climate change.

"We're thrilled that British Columbia is developing innovative solutions for a low-carbon economy," said Linda Adams, Schwarzenegger's Secretary for Environmental Protection.

"As a partner in the Western Climate Initiative, we're committed to fighting global warming and supporting every effort that can effectively reduce our regional greenhouse gas emissions."

British Columbia and Manitoba have joined seven western U.S. states to form the Western Climate Initiative, an economic and environmental partnership aiming to reduce greenhouse gas emissions while promoting and developing a green economy.

The Western Climate Initiative, with a combined 63 million popele and a total gross domestic product estimated at $2.9 trillion, plans to have its own regional cap-and-trade system operating by August.

B.C.'s Greenhouse Gas Reduction (Cap and Trade) Act aims to cap greenhouse gas emissions by industrial polluters and establish a government-monitored system that will allow them to purchase credits if they can't meet the cap or sell credits if they beat the cap.

B.C. Environment Minister Barry Penner said the government has yet to set cap levels but suggested they may be based on the European model, which currently charges about $35 for each tonne of carbon.

California's Environmental Protection Agency said British Columbia's efforts will spur other initiatives to cut greenhouse gas emissions in the western region of North America.

Schwarzenegger visited British Columbia last year where he and B.C. Premier Gordon Campbell signed agreements to fight climate change.

The two agreed to reduce greenhouse gas emissions and adopt a low-carbon fuel standard, as well as develop a long-term plan to build a 'hydrogen highway' between Baja and British Columbia that would link the two by a series of fuelling stations that provide alternative, low-carbon fuels for low-polluting vehicles.

California and B.C. also agreed to co-operate to protect the Pacific coastline.

California is the acknowledged North American leader when it comes to fighting climate change. The state welcomes green technology and prides itself on its attempts to become more energy efficient.

Schwarzenegger, a strong Republican with pro-business values, surprised many observers with his green political agenda.

But David Crane, Schwarzenegger's special adviser for jobs and growth, has said that a green economy and a healthy economy aren't mutually exclusive.

B.C. Premier Gordon Campbell announced his own Schwarzenegger-like environmental conversion about 15 months ago when he said his government will pursue an aggressive agenda to fight climate change that includes plans to cut greenhouse emissions by one-third by 2020.

He said too little has been done to fight global warming, a problem "which is literally threatening life on earth as we know it."

In February, B.C. became the first province in Canada to introduce an escalating carbon tax on consumers to fight climate change.

The government expects the carbon tax to raise $1.8 billion over three years, and that money, by law, will be returned to businesses and individuals in tax cuts and environmental rebates.