States Want Their Cap-and-Trade Plans Added to U.S. EPA's Carbon Limits

U.S. states with cap-and-trade laws
want the Obama administration to add their carbon markets into
new federal greenhouse-gas regulations, a California
environmental official said.

State-run carbon-trading programs should be “treated as
equivalents or substitutes” for Environmental Protection Agency
regulations for emissions tied to global warming from power
plants, oil refineries and factories, Mary Nichols, chairman of
the California Air Resources Board, said yesterday in a
telephone interview.

“It would be a way to make sure that industries in our
state are not being penalized by being regulated by EPA on top
of what the state is doing,” Nichols said.

California plans to start a cap-and-trade program in 2012
and it may be expanded into a regional carbon market that
includes New Mexico and the Canadian provinces of British
Columbia, Ontario and Quebec. A group of 10 Northeastern states
already has such a trading program for power plants.

Officials from the states and provinces are considering
whether to link the programs into a single North American carbon
market following the defeat of cap-and-trade legislation in
Congress this year.

The federal plan, backed by President Barack Obama, aimed
to cut U.S. greenhouse-gas emissions 17 percent from their 2005
level by 2020. The program would have issued a declining number
of carbon dioxide allowances that companies would buy and sell.

Without a federal carbon market, Obama’s EPA has issued
regulations that will require new or expanded industrial plants
to use the “best-available” technology to curb greenhouse
gases starting next month. State environmental agencies would
decide on a case-by-case basis what technology a company should
use to meet the standard, EPA officials have said.

States “are going to be pushing” the EPA to go further
and make regional carbon-trading programs “approvable” under
the federal Clean Air Act, Nichols said.

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