| May 14, 2009 |  |
Midwest Governors to Develop Regional Plan to Cap and Reduce Global Warming Emissions
Governors receive advisory group recommendations
A 42 person advisory group representing utilities, power generators, oil companies, manufacturers, labor, and environmental groups agreed yesterday to a set of Final Draft Recommendations that governors from six Midwestern states and the premier of Manitoba will use to develop a regional plan to cap and reduce global warming emissions. The group advising the Midwestern Greenhouse Gas Reduction Accord (MGGRA) members—Illinois, Iowa, Kansas, Michigan, Minnesota, and Wisconsin and Manitoba—indicated a strong preference for Congress to enact a federal level program to address climate change.
The states share this opinion and have said their regional program is "Plan B" in the event that Congress fails to act. The MGGRA states expect these recommendations to inform the federal debate currently taking place in Congress.
The advisory group stated that the region's plan to cap global warming emissions, which would go into effect on January 1, 2012, should have the following key elements:
- An economy-wide cap on global warming emissions from transportation fuels, natural gas combustion, power plants, and industry.
- An emissions cap between 18 to 20 percent below 2005 levels by 2020, which includes a 2 percent strategic reserve of emission allowances that could be used to minimize potential price increases. The states will choose a number between 18 to 20 percent before forwarding the Final Draft Recommendations to Congress in the near future. The recommended 2050 target is 80 percent below 2005 levels.
- An auction for roughly half of the emissions allowances, while the rest would be sold to capped sources at a set fee below the auction price. Between 2021 and 2030, the program would transition to 100 percent auction.
- A mandate that allowances and auction revenue be used exclusively for climate-related purposes such as developing clean energy projects, mitigating consumer and business impacts, and adapting to climate change.
- A provision that allows capped sources to reduce up to 20 percent of their emissions by purchasing "emissions offsets" from uncapped sources. The offsets limit could be increased to help contain allowance prices.
The advisory group reached unanimity on many, but not all, of the recommendations.
In addition to the regional cap on global warming emissions, the Midwestern governors' climate plan includes strong renewable energy and energy efficiency strategies. Analytical modeling conducted for the advisory group found that energy efficiency and clean energy programs help reduce global warming emissions and reduce costs associated with capping emissions.
The recommendations align closely with the Discussion Draft of the American Clean Energy and Security (ACES) Act currently under consideration in Congress. Key differences include:
- A lower offsets limit (20 percent vs. approximately 30 percent in the early years under ACES)
- A detailed direction on how to utilize emissions allowances and revenues from auctioning allowances, including auctioning approximately half of the allowances and no free allocation of allowances.
The Union of Concerned Scientists (UCS) is a member of two MGGRA Subgroups and has been a contributor to the Accord process since its inception, in collaboration with a coalition of Midwestern environmental groups. UCS was also engaged in development of the Northeast's Regional Greenhouse Gas Initiative (RGGI) and the Western Climate Initiative (WCI).
The Union of Concerned Scientists puts rigorous, independent science to work to solve our planet's most pressing problems. Joining with citizens across the country, we combine technical analysis and effective advocacy to create innovative, practical solutions for a healthy, safe, and sustainable future.
