Interview with Janice Adair, Chair of the Western Climate Change, based in Olympia, Washington.

[Newsletter] It seems the majority of provinces and states that have joined the Western Climate Initiative (WCI) have done so because they feel that both the US and Canadian federal governments are not taking sufficiently aggressive action on climate change. In 2009 the next US President is set to take office and the successful primary candidates both campaigned on seriously fighting climate change with a carbon cap-and-trade system. How do you expect the WCI will interact with current and future federal climate initiatives?

[Janice] I don’t think there will be any more federal action in the US now that Lieberman-Warner has been postponed until next year. I know there may be some hearings in the House. We are certainly going to follow what takes place there, but even proponents don’t expect anything to pass.

For the next administration, where we expect action, we will be that much further along with our WCI design. WCI certainly expects to share that with Congress and to push for inclusion of the provisions that we think work best for a cap-and-trade program in the federal legislation.

[Newsletter] How do you expect the WCI to interact with the Regional Greenhouse Gas Initiative (RGGI), based in the US Northeast, in the future?

[Janice] We talk to folks from one of the RGGI states on a regular basis and also share advisors who are also advisors to the RGGI or are involved with it. We do expect to come together with RGGI this fall, after they complete the initial auction. We will see what they found worked and what to do differently.

[Newsletter] Does the Western Climate Initiative have plans to connect with other trading schemes and do outreach to countries like China and India?

[Janice] We would like to connect with the European emissions trading system (EU ETS), but as we understand the EU ETS can only connect with countries. So Canada might be in a position to link with the EU, but it’s not clear whether the States will be able to as they lack a national program. Before we start doing outreach to India and China, we would do outreach to our fellow states and provinces–that is who we want to target first.

[Newsletter] What problems might arise for different sectors of the economy, especially for companies that have operations in different provinces and states?

[Janice] Certainly there are not going to be duplicative cap-and-trade programs, that’s not something that’s being done outside of WCI. One problem we are facing is the issue of leakage, since not all states and provinces are part of the WCI. Most of us expect there will be a federal cap-and-trade system in both countries. This reality challenges the financial viability of relocating outside of a WCI jurisdiction to a different jurisdiction for the year or two when there may be no cap-and-trade program. This aside, there are certainly issues of competitiveness that we are keenly aware of and are trying, through our design initiatives, to mitigate. That’s probably the biggest issue.

Electricity has its own special issues and is posing a special problem for us. We are trying to decide how to regulate electricity to avoid ‘leakage’. Our Western grid is connected so whether or not a state or province is within WCI, the electricity generated within that province or state flows into the Western grid. I know the generators will be covered, but I am not sure beyond that. We are committed to finding a way to cover imported power because the issue of leakage could be huge if we don’t.

[Newsletter] Can you speak to the role offsets will play in the Western Climate Initiative cap-and-trade?

[Janice] We’re still working out the details of that. We have agreed that offsets should be part of the system. We have agreed that there should be both WCI pre-approved offset projects and that proponents of offset projects should be able to bring them to the WCI for approval. And, we have agreed that we use standardized protocols where they exist, and where they don’t exist we will undertake the development of those protocols. But, as far as which projects we would pre-approve, if there some be any percentage or geographic limitation on offset projects, we are still in the negotiating stage on those.

[Newsletter] Why did the WCI choose to use the Climate Registry?

[Janice] At the time that our Governors and the Premiers signed onto the Western Climate Initiative the Climate Registry was and continues to be the only sub-national organization that is the collecting greenhouse gas (GHG) emissions and has developed a reporting protocol. The Climate Registry is an outgrowth of state action of the Western Governors Association and NesCom. Since, many of the Western states that are part of Western Governors Association are also members of the WCI, it only makes sense for us to join it because it was in part our brain child. What it brings to the table is that common reporting platform, so that when trading starts we can be sure a ton, is a ton, is a ton, wherever it happens to be reported. It is a critical component to a trading program.

[Newsletter] What advice do you have for businesses?

[Janice] The same advice we had all along. We really want folks to be paying attention to the documents the WCI puts out for public review and comment. We want people to provide us with meaningful comments so that we can understand their position—not only what businesses want, but also what cannot work for them, which is sometimes even more important than a wish list. People need to continue to be involved in the process. We try to make it really easy through the website, listserv, webinars and the ability to submit comments in writing. Beyond that, I think it is beneficial for all emitters of greenhouse gases (GHG) to understand their carbon footprint, what about their processes creates their emissions, and what they can do to reduce their emissions. The cost implication is for them, so that when there is a federal system, which there will be without a doubt in both Canada and the U.S., they are best positioned to take advantage of it. It’s switching now to more energy efficient processes and to whatever can be done to reduce emissions. It not only has the benefit of reducing GHG emissions, but also to reduce their energy use. And energy is money.