By Barbara Kessler

While the world waits for Washington to act on one looming crisis – the Wall Street mortgage debacle – states in the Western U.S. acted today on another crisis, announcing a plan to reduce emissions to combat global warming.

The Western Climate Initiative, a collaborative of seven Western states and four Canadian provinces, agreed to try to reduce carbon emissions to 15 percent lower than 2005 levels by 2020.

The plan, based on a regional cap-and-trade market and efforts to support clean energy and other green technologies, would be “the most comprehensive carbon-reduction strategy to date” covering 90 percent of the region’s emissions, according to the news release on the agreement.

It would target emissions from electricity generation, industry, transportation and residential and commercial use. Under the cap-and-trade program, those emitting greenhouse gases would be capped at a certain level and would have to buy permits to cover their pollution or find the best market solutions to reduce their emissions.

The WCI is one of many regional cap-and-trade programs being developed around the world, including two others in the U.S.: The Regional Greenhouse Gas Initiative (RGGI) in the Northeast, and the Midwestern Greenhouse Gas Reduction Accord in the Midwest.

Cap-and-trade programs are expected to give green energy and clean-tech businesses a big push, but many who’ve lauded the regional efforts say they are a clarion call to the federal government, which failed earlier this year to pass a proposed comprehensive climate change bill.

In the absence of federal legislation, however, many climate watchdog groups believe  regional pacts such as the one announced today will help shift the nation toward a green economy and spur green job growth.

Christopher Busch, a climate economist with the Union of Concerned Scientists, said that analyses conclude that Western region’s economy would benefit from investments in global warming solutions. Improved energy efficiency, for instance, can reduce electric bills and save drivers money at the pump and other changes would help create new jobs, he said.

But he warned: “There’s a right way and wrong way to do cap and trade. Doing it the right way means making sure that the program speeds the transition to a clean energy economy in a way that protects consumers. “The UCS believes “the right way” involves limiting the use of carbon offsets, which allow polluters to basically pay others to “offset” or reduce their emissions. It is better to encourage real gains in pollution reduction and to that end the UCS supports auctioning of permits to polluters. That sets up a market for the permits, with pollution-reduction programs achieving real market value which in turn “allows states to spend money on projects that can further reduce pollution and benefit their residents.”

The WCI agreement does limit the use of carbon offsets and allows for states to set even tighter limits on offsets, according to the UCS analysis.

The Western Climate Initiative, launched in February 2007, is composed of the governors of the states of Arizona, California, New Mexico, Oregon, Washington, Montana and Utah; and the Canadian provinces of British Columbia, Manitoba, Ontario and Quebec.

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