Mar 12 - McClatchy-Tribune Regional News - Scott Learn The Oregonian, Portland, Ore.

The first pass at a greenhouse gas reduction plan for Oregon and the rest of the western United States and Canada doesn't include autos, agriculture, forestry or natural gas use, leaving out more than half the emissions generated in the West.

The Western Climate Initiative -- a group of governors from Oregon and six Western states and the premiers of British Columbia and Manitoba -- wants to reduce greenhouse gases by 15 percent below 2005 levels over the next 12 years.

The initial "scoping" plan released last week calls on electric utilities and industry to make reductions. Transportation sectors and natural gas use might be added to the scheme later.

But the omissions in this first phase concern environmentalists and some electric utilities and industries likely to be saddled with carbon limits after the plan becomes final late this summer. Transportation fuels, mainly for cars and trucks, are the biggest single source of greenhouse gases in the region, accounting for more than a third of emissions.

Letting big sectors off the hook could force electricity customers and energy-dependent industries such as paper mills to bear much of the cost of fighting climate change, critics say.

"Ultimately, if we're going to regulate our way out of climate change, we've got to include all sectors," said Bob Jenks, executive director of the Citizens' Utility Board of Oregon.

The plan will likely use a "cap-and-trade" approach to achieve emissions reductions. Under that system, state and provincial governments would first set a limit, or cap, on greenhouse gas emissions. Oregon has the most aggressive goal of the climate initiative's members, so it would set the strictest limits.

The governments would then allocate pollution credits to utilities, industries and others included in the plan, based on their historic releases minus a share of the reduction goal. In theory, polluters that could reduce pollution relatively cheaply would do so, then sell any excess credits to polluters that couldn't, allowing them to continue polluting as long as the overall cap isn't exceeded.

Cap-and-trade boosters say the emissions trading system allows the free market -- not regulators -- to more efficiently control how pollution control actually gets done.

In a conference call Tuesday, the head of the climate initiative's scoping committee noted that states are taking other steps to reduce emissions from cars and trucks, including mileage standards and a clean car initiative that the federal government has stymied thus far.

Cap and trade is "not the silver bullet that solves everything," said Michael Gibbs, assistant secretary for climate change in California's Environmental Protection Agency.

As proposed, the scale of the Western Climate Initiative would still be more aggressive than the European Union's cap and trade plan, which focuses only on large energy users and not on transportation.

But many groups are calling for transportation to be added, perhaps by regulating fuel at the wholesale level when it's brought into the states and provinces. Those calling for inclusion of cars and trucks range from the city of Seattle to the Sierra Club to PacifiCorp, one of Oregon's major electric utilities.

A cap that included transportation would likely raise gas prices. Gibbs said the group will analyze the logistical challenges and economic consequences of capping transportation emissions by May, including the effect on poor people. The climate initiative may elect to "phase in" transportation later than other sectors.

The group will also study whether capping natural gas use make sense. Some gas utilities have argued that natural gas users have fewer opportunities to conserve than electric customers do.

Lisa Adatto, environment and economic development director for the Oregon Business Association, said the climate initiative needs to be careful about cap and trade's effects on the economy. For businesses specializing in green solutions, an aggressive approach will be "a great opportunity," said Adatto, whose group has not taken a position on the climate initiative.

But energy-intensive industries, including paper and lumber mills, "are absolutely critical to our forest-based economy," Adatto said, and could be hurt by higher electric rates.

The committee's proposal rules out including agriculture and forestry under a cap-and-trade system, which would affect logging, fertilizer application and crop selection. Emissions measurements are fuzzy in those sectors, the group said, and regulating thousands of individual farms and woodlots would be an administrative headache.

Forest and farm groups support that stance. But Doug Heiken, conservation and restoration coordinator for Oregon Wild, said harvesting crops and trees has a big effect on greenhouse gas emissions, both through reduced carbon storage in plants and releases from fertilizers and soil tillage.

The scoping committee is taking comments on its proposal through March, and the climate initiative is scheduled to put out a final plan by August. For details: www.westernclimateinitiative.org .