Regulating global warming pollution in Wisconsin

Keith Reopelle

The scientists of the world have told us we must act swiftly and strongly to avoid catastrophic effects of global warming. Over the past year Wisconsin has begun to step up and position itself to take strong action; but we have a long way to go and no time to waste.

Governor Doyle established a global warming task force last spring and 84 meetings later the task force has developed 60 different policy recommendations for consideration (http://dnr.wi.gov/environmentprotect/gtfgw/). Most of the recommendations are specific to a certain sector, for example the electric power efficiency measures, transportation policies, agriculture and forestry policies, and so on.

One overarching policy that will have a disproportional impact is a cap and trade policy on the major sources of greenhouse gas emissions (GHG). The task force is considering recommending a cap and trade program that would regulate carbon dioxide emissions from electric generating power plants, the largest industrial facilities, transportation fuels, and heating fuels. This program would regulate more than 100 million tones of the roughly 125 million tones of global warming emissions from all Wisconsin sources. The recommendation being considered by the task force would cap all of these emissions (in aggregate) at 2011 levels and than require a steady decline to 1990 levels by 2020.

Last November Governor Doyle, as the chairman of the Midwestern Governor's Association, hosted an energy summit where he joined five other Midwestern Governor's in signing a Greenhouse Gas Accord. Under the Accord the six states agreed to establish reduction targets and schedules and to develop a market-based, multi-sector cap and trade mechanism to achieve the reductions. The Midwest will be the third region of the country to develop such regional regulatory program. Ten New England states have formed and are implementing the Regional Greenhouse Gas Initiative (RGGI), and seven western states have formed the Western Climate Initiative to implement a similar cap and trade program on the west coast.

Because of its state global warming task force and Doyle's leadership role in the MGA, Wisconsin, along with Minnesota, which passed mandatory GHG emission reduction legislation last year, are playing leadership roles in establishing the regional cap and trade program. The other states that have signed the Accord are Illinois, Iowa, Michigan and Kansas. Together these states have formed a stakeholder group that is advising the Governors in their efforts to design the regional program. Clean Wisconsin is the lone environmental group from Wisconsin represented on the stakeholder group.

The efforts to design a cap and trade program in Wisconsin will likely influence the stakeholder work and Governor's decisions at the regional level and the regional cap and trade program provides the opportunity for a much stronger greenhouse gas program; so the two processes should work well together and compliment each other.

The idea of a cap and trade program is that sources of the emission have to ratchet down their emissions over time but some sources can "over comply" and sell the excess reductions (in the form of credits) to other sources who have a more difficult time complying. This results in a lower overall cost of compliance across the region or nation. There are a number of critical issues in how to put together an effective cap and trade program including:

1. Where to set the cap and reduction schedule (how fast to reduce).
2. To what extent you allow non-regulated entities, who can make emission reductions, generate credits that help regulated facilities comply.
3. How you distribute credits (e.g. holding an auction).
4. Whether there are any "off-ramps" or exceptions for compliance of the price of complying reaches a particular level.

Both the state task force and the regional stakeholder group will be deliberating over these issues in the coming months. You can get involved by contacting us at www.CleanWisconsin.org.