Climate Change: Action by States To Address Greenhouse Gas Emissions

^Pr^ep^ar^{ed f}^o^r^M^e^m^b^ers^an^d^Com^mⁱ^t^t^ees^of^C^ong^r^e^ss

In the absence of a federal climate change program, a number of states have taken actions that
directly address greenhouse gas (GHG) emissions. States’ efforts cover a wide range of policies.
Although much of the early activity was largely symbolic, the more recent state actions have been
more aggressive.
Twenty-three states have joined one of the three regional partnerships that would require GHG (or
just carbon dioxide) emission reductions. Set to take effect in 2009, the Regional Greenhouse Gas
Initiative (RGGI) is a partnership of 10 Northeast and Mid-Atlantic states that creates a cap-and-
trade system aimed at limiting carbon dioxide emissions from power plants. Seven western states
(and four Canadian provinces) have formed the Western Climate Initiative, which set an
economy-wide GHG emissions target of 15% below 2005 levels by 2020. In addition, six states
(and one Canadian province) signed the Midwestern Greenhouse Gas Reduction Accord, which
aims to establish a multi-sector, GHG cap-and-trade program in the Midwest. The latter two
programs are still in the early development stages; RGGI is on schedule for 2009, and
participating states have already held one emission allowance auction.
California has addressed GHG emissions on several fronts. To complement its statewide
emissions reduction regime, California established GHG performance standards that would
effectively limit the use of coal-generated electricity in California. In 2004, California issued
regulations to reduce greenhouse gases from motor vehicles. At least 16 other states have
indicated they intend to follow California’s new vehicle requirements. In addition, the state has
also taken action to reduce the carbon intensity in its transportation fuels.
Predicting the precise consequences of the state-led climate change actions is difficult. Some
actions, particularly the mandatory emission reductions, may create economic effects, especially
in the automotive manufacturing and electricity-generating sectors. Industry stakeholders are
especially concerned that the states will create a patchwork of climate change regulations across
the nation. This prospect is causing some industry leaders to call for a federal climate change
program. If Congress seeks to establish a federal program, the experiences and lessons learned in
the states may be instructive.
Although some states are taking aggressive action, their possible emission reductions may be
offset by increased emissions in states without mandatory reduction requirements. This is perhaps
the central limitation of state climate change programs in actually affecting total greenhouse gas
emissions. Legal challenges represent another obstacle for state programs, particularly for the
more aggressive, mandatory programs.

Introduc tion ..................................................................................................................................... 1
Mandatory Programs to Reduce Greenhouse Gases........................................................................3
Regional Activities....................................................................................................................3
Regional Greenhouse Gas Initiative...................................................................................4
Western Climate Initiative..................................................................................................7
Midwestern Regional Greenhouse Gas Reduction Accord.................................................7
Individual State Efforts Requiring GHG Reductions................................................................8
Economy-Wide Reduction Initiatives.................................................................................8
Emission Reduction from Power Plants............................................................................10
Emission Reduction from Motor Vehicles........................................................................12
Other Mandatory Programs...............................................................................................13
Greenhouse Gas Emissions Targets...............................................................................................16
Greenhouse Gas Emissions Tracking............................................................................................18
Federal Tracking Programs.....................................................................................................19
State Emission Tracking Programs.........................................................................................19
Mandatory Greenhouse Gas Reporting.............................................................................19
Greenhouse Gas Registries...............................................................................................21
Greenhouse Gas Inventories.............................................................................................22
State Action Plans..........................................................................................................................22
Issues for Congress........................................................................................................................23
Potential Effects of State Actions............................................................................................24
States as Policy Laboratories............................................................................................24
Possible Economic Effects................................................................................................25
Patchwork of Regulations.................................................................................................26
Limitations of State Actions....................................................................................................26
Figure 1. Regional Activities to Control Greenhouse Gas Emissions.............................................4
Figure 2. Comparison of Observed Emissions from RGGI Facilities (2000-2007) to
RGGI Cap (effective in 2009)......................................................................................................6
Figure 3. States with Completed (Orange) and Under-Development (Blue Lines) Climate
Change Action Plans..................................................................................................................23
Table 1. Statewide Greenhouse Gas Targets Compared with Emissions Data from 1990
and Recent Years of Available Data...........................................................................................17
Table 2. Top-Ranked Carbon Dioxide Emissions by Nation, U.S. States, and U.S.
Regional Partnerships (2005 data).............................................................................................24

Author Contact Information..........................................................................................................27

Over the past century, particularly in recent decades, scientists have documented increases in
global temperature and sea levels, decreases of sea ice in the Arctic, and melting of continental
ice sheets and mountain glaciers. There is increasing evidence that human activities are at least ¹
partially responsible for some of these effects. This is based upon the combination of two
conclusions. First, global temperature increases are linked in some manner to the measurable ²
increases of greenhouse gas (GHG) concentrations in the atmosphere. Second, human activities
(e.g., fossil fuel combustion, industrial processes, and deforestation) have contributed to the
increased concentration of GHG emissions in the earth’s atmosphere.
The link between GHG emissions and climate change has motivated efforts to achieve reductions
of emissions. In 1992, the United States ratified the United Nations’ Framework Convention on ³
Climate Change (UNFCCC), which called on industrialized countries to initiate GHG reduction.
However, in early 2001, President George W. Bush rejected the UNFCCC 1997 Kyoto Protocol,
which called for legally binding commitments by developed countries to reduce their GHG
emissions.
Over the past decade, the federal government has promulgated or proposed a variety of voluntary
and regulatory actions that, while not specifically seeking to reduce GHG emissions, may have ⁴^th
yielded emission reductions as a byproduct. In the 110 Congress, Members introduced multiple
bills to address climate change issues in some fashion and enacted several pieces of legislation ⁵
that contained climate change provisions.
In recent years, there has been some congressional support for a mandatory reduction program.
For example, the Senate version of the Energy Policy Act of 2005 included a “sense of the ⁶
Senate” Resolution stating:
^{It is}^th^{e s}^eⁿ^s^{e o}^f^th^{e Se}ⁿ^a^{te t}^h^{at C}^oⁿ^g^r^es^s^s^h^ou^{ld en}^ac^{t a com}^p^re^h^e^ns^iv^{e a}ⁿ^{d eff}^ecti^v^e
ⁿ^a^tⁱ^oⁿ^a^l^prog^ra^m^of^m^aⁿ^d^at^ory^,^m^a^r^k^et^-^b^a^s^{ed l}ⁱ^mⁱ^t^s^aⁿ^{d i}ⁿ^ceⁿ^tⁱ^v^{es on e}^mⁱ^s^sⁱ^oⁿ^{s of}
^g^r^eenh^ous^{e g}^a^s^e^s^th^{at s}^l^o^w^{, s}^t^{op, an}^{d rev}^e^rs^{e th}^{e g}^r^o^w^t^h^of^s^u^ch^e^m^is^sⁱ^ons^{at a rate an}^{d in}^a
^m^aⁿⁿ^er^t^h^{at, No}^{. 1}^,^w^illⁿ^o^{t si}^gⁿⁱ^f^ican^tl^y^h^a^r^m^t^h^{e U.S. eco}ⁿ^o^m^y^an^d^,^No^{. 2}^,^w^{ill e}ⁿ^co^u^r^ag^e
^o^t^he^r^a^c^tⁱ^o^{n a}ⁿ^d^ke^{y c}^o^nt^rⁱ^b^u^t^o^r^s^t^o^gl^o^b^a^l^e^mⁱ^ssi^oⁿ^s.
Members in the 110^th Congress introduced multiple bills that would have established some type
of a mandatory emissions reductions program. One of these proposals—the Lieberman-Warner

¹^T^hⁱ^s^rep^o^r^t^d^o^e^sⁿ^o^t^a^d^d^r^{ess t}^h^e^d^e^b^a^t^e^{s asso}^ci^at^ed^wⁱ^t^h^t^h^{e cl}ⁱ^m^at^{e ch}^an^{ge sci}^eⁿ^{ce n}^o^r^t^h^{e r}^o^l^e^o^f^hu^m^aⁿ^actⁱ^vⁱ^t^y^.^F^o^r
^m^o^r^e^inf^o^r^m^a^{tion, s}^e^e^C^R^S^R^e^por^{t R}^L³⁴²^66,^C^lim^ate^C^h^a^nge^:^Sc^ie^nc^e^U^pda^te²⁰⁰⁷^,^by^J^a^ne^A^.^L^e^gg^e^tt.
²^{For e}^x^a^m^ple^,^c^a^r^{bon d}ⁱ^ox^ide^,^the^prim^a^r^y^G^H^G^,^ha^s^ris^e^{n w}^o^rldwⁱ^d^e^f^r^om^{280 pa}^rts^pe^{r m}^{illion (}^p^p^m^{) to ov}^e^r³⁸⁰
^ppm^ov^e^r^the^pa^s^t¹⁵⁰^y^e^a^r^s^.
³^T^h^{e Un}^ited^Natioⁿ^s^Fram^e^w^o^r^k^Coⁿ^v^en^tioⁿ^oⁿ^C^lim^{ate Ch}^an^g^e⁽^{UNFCCC) d}^e^fⁱⁿ^e^{s GH}^G^s^toⁱⁿ^clu^d^{e carb}^oⁿ^dⁱ^o^x^id^e,
^m^e^thaⁿ^e^,^nitr^ous^ox^ide^,^hy^dr^of^luor^oc^a^r^bons^{, pe}^r^f^luor^oc^a^r^bo^ns^{, a}ⁿ^d^s^u^lf^ur^he^x^a^f^l^uor^ide^.
⁴^For^e^x^a^m^ple^,^f^e^de^r^a^{l pr}^og^r^a^m^s^th^a^t^pr^om^ote^eⁿ^e^r^gy^ef^fⁱ^cⁱ^eⁿ^cy^or^the^us^e^of^r^e^ne^w^a^ble^eⁿ^e^r^gy^s^our^c^e^s^ha^v^e^the
^poteⁿ^tia^{l to}^re^duc^e^G^H^G^e^m^issions.
⁵^{For m}^o^re^de^ta^{ils re}^g^a^rding^th^{is le}^gⁱ^slatioⁿ^,^{see CRS Rep}^o^{rt RL}³⁴⁰⁶⁷^,^C^lim^ate^C^h^a^nge^Le^gis^l^at^io^{n i}ⁿ^the¹¹⁰^th
^C^ongr^e^s^s^,^b^y^Joⁿ^a^t^h^an^L^.^Ram^s^e^u^{r an}^{d Bren}^t^D.^Yaco^b^u^cci^.
⁶^Se^na^te^A^m^eⁿ^d^m^eⁿ^{t N}^o^{. 8}⁶⁶^to^H^.^R^.^6,^pa^s^s^e^{d by}^v^o^ic^e^v^o^te^J^une²²^{, 2}⁰⁰⁵^{. A}^m^o^{tion t}^o^ta^ble^the^a^m^e^ndm^eⁿ^{t w}^a^s
^rejected^b^y^{a ro}^{ll call v}^o^{te (4}⁴^{- 5}³^).

Climate Security Act of 2008 (S. 2191/S. 3036)—was reported by the Senate Environment and ⁷
Public Works Committee (December 2007) and debated in the Senate in June 2008.
In the absence of action by the federal government to establish a national program that directly
addresses GHG emissions, a number of states (and local governments, whose activities are not ⁸
covered in this report) have taken action in this arena.
States’ efforts cover a wide spectrum, from developing climate action plans to setting mandatory
GHG emission standards. Arguably, early state actions were largely symbolic. In the late 1980s, ⁹¹⁰
Vermont and Oregon were the first states to set GHG reductions goals, but during the
subsequent decade (1990-2001), both states increased their GHG emissions: Vermont by 18% and ¹¹
Oregon by 30%. However, a majority of states have more recently begun to develop their own
climate change strategies or policies, with an increasing number of states adopting or proposing
more significant provisions, including mandatory GHG reductions.
The motivating factors for the various states’ actions may be as diverse as the actions themselves.
Some actions are motivated by projections of climatic changes, such as sea level rise or
agricultural impacts. Some states view their GHG policies as economic opportunities. States want ¹²
to position themselves for a “less-carbonized” future, by promoting, for example, alternative
energy supplies, particularly sources available in-state. Other states champion GHG reduction
policies because of the possible co-benefits: improved air quality, reduced traffic congestion, and
less reliance on foreign energy supplies. Another motivating factor for state action is the
possibility of catalyzing federal legislation.
This report covers state actions that directly and explicitly address GHG emissions (see the text
box below). First, the report describes the different types of state actions, both individual and
cooperative efforts, that are either proposed or under way, and highlights several of the more
significant developments. Second, the report examines state actions from a federal policymaking
perspective, including both the potential effects of state-led actions and their limitations.

⁷^{For m}^o^re^inf^o^rm^a^{tion o}ⁿ^the^pro^g^r^e^{ss a}^{nd de}^ta^{ils re}^g^a^rding^{this le}^gⁱ^sla^{tion, se}^e^{CRS Re}^p^o^{rt RL}³³⁸^46,^Greenh^o^u^s^e
^{Gas Re}^duc^ti^on:^Ca^p-a^nd-Tr^ade^B^{ills in}^the¹¹⁰^th^C^o^ngr^e^s^s^,^b^y^L^a^rr^y^P^a^rker,^Bren^t^D.^Yaco^b^u^cci^,^and^Jon^a^t^h^an^L^.
^Ra^m^s^eu^r.
⁸^A^num^be^{r of}^loc^a^l^g^o^v^e^rn^m^e^{nts a}^r^e^pursuiⁿ^g^a^c^tiv^itie^{s tha}^t^m^a^y^di^re^c^t^l^y^{or ind}ⁱ^re^c^tly^re^duc^e^G^H^G^e^m^is^{sions. F}^o^r
^e^x^a^m^ple^,^num^e^r^{ous loc}^a^l^g^o^v^e^rnm^e^{nts (c}^itie^{s, c}^o^uⁿ^tie^{s) in}^a^t^le^a^s^{t 35 sta}^t^e^s^ha^v^e^joiⁿ^e^d^t^h^e^Citie^{s f}^o^{r Clim}^a^t^e
^P^r^ote^c^tio^{n (CC}^P^).^P^a^rtic^ipa^tⁱⁿ^g^eⁿ^titie^{s c}^o^m^m^{it to re}^d^u^c^e^loc^a^l^e^mⁱ^{ssions tha}^t^c^ontrⁱ^b^u^te^to^g^l^oba^{l w}^a^r^m^ing^.^{For m}^o^re
^inf^o^r^m^a^tion^{on this}^pr^og^r^a^m^,^s^e^e^http:^//w^w^w^.ic^l^eⁱ^.or^g^/inde^x^.^ph^p?^id⁼¹¹¹^8.
⁹^Ve^r^m^{ont Ex}^e^c^u^tiv^e^O^r^de^r⁷⁹⁽^O^c^t^obe^r^23,¹⁹⁸⁹⁾^c^a^lle^{d f}^o^r^a¹⁵^%^r^e^duc^tio^{n be}^l^o^w¹⁹⁸^{9 le}^v^e^ls^by²⁰^00.^Se^e^U^.^S.
^C^ong^r^e^s^s^,^O^f^fⁱ^c^e^of^T^e^c^hnol^og^y^A^s^s^e^s^s^m^e^{nt, 19}⁹¹^,^C^h^an^gin^g^by^D^e^gr^e^e^s^:^Ste^p^s^{to Re}^duc^e^G^r^e^eⁿ^h^ous^e^G^a^s^e^s^,^p.³²^7.
¹⁰^O^r^e^g^{on Se}^na^te^B^ill⁵^{76 (}¹⁹⁸⁹⁾^s^e^{t a}^g^o^a^l^of^20%^r^e^duc^ti^on^of¹⁹⁸⁸^le^v^e^ls^by²⁰⁰⁵^{. Se}^e^U^.^S.^C^o^ng^r^e^s^s^,^O^f^fⁱ^ce^of
^T^e^c^hnolog^y^A^s^s^e^s^s^m^e^nt,¹⁹⁹¹^,^C^han^gi^ng^by^D^e^gr^e^e^s^:^Ste^p^s^t^o^Re^d^u^c^e^G^r^e^e^nhous^e^G^a^s^e^s^{, p. 32}^7.
¹¹^S^{ee W}^o^rl^d^Reso^u^r^{ces In}^stⁱ^t^u^t^e,^C^lⁱ^m^at^e^Aⁿ^al^ysi^s^In^dⁱ^cat^o^r^{s T}^o^o^l^,^at^h^t^t^p^:^/^/^cai^t^.^w^rⁱ^.^o^r^g/^.
¹²^Se^e^R^a^be^{, B}^a^r^r^y^{, 2006}^{, “}^S^e^c^oⁿ^d^G^e^ne^r^a^{tion C}^lim^a^t^e^Polic^ie^s^{in A}^m^e^r^ic^aⁿ^Sta^t^e^s^{: P}^r^olif^e^r^a^{tion, D}ⁱ^f^f^us^ion^,^aⁿ^d
^R^e^gⁱ^ona^liz^a^tion,”^Issu^{es i}ⁿ^Go^verⁿ^aⁿ^ce^S^t^udⁱ^e^s^{, T}^h^e^Bro^o^kⁱ^ng^{s Ins}^tituti^on^{, A}^u^g^u^{st 20}⁰⁶^.

Direct Action Versus Indirect Action
^Di^{rect state actions that address}^GHG^{emissions include laws, reg}^{ulations, or policies that are established explicitly to}
^{reduce G}^HG^{emissions. In some}^{cases, it is difficult to draw a line between direct a}^{nd indirect actions, beca}^{use a}
^{specific policy may be}^unde^rtaken^{for multiple p}^{urposes, including}^GHG^{reduction. One}^{of the}^best^{examples of t}^his
^{ambiguity is a Renewable Portfolio Standard (RPS)}^{. An RPS requires that a ce}^{rtain amou}^{nt or p}^erc^{entage of electricity}
^{is generated from}^renewa^{ble ene}^{rgy resou}^{rces (e.g., solar, biomas}^{s). Twenty-nine states}^{have a ma}^{ndatory RPS.}
^{Although G}^HG^{reduction is not t}^{he p}^{rimary driver for a}ⁿ^{RPS in}^{most states, some states list their}^{RPS as part of a}
^comprehe^{nsive strateg}^{y to reduc}^{e GH}^{G emissions.}
^{Indirect actions are ofte}^{n c}^haract^{erized as “no regrets” a}^p^p^roache^{s, providing net be}^{nefits rega}^{rdless of the}
^{magnitude of their im}^{pacts on cli}^{mate cha}^{nge. For the p}^u^r^{poses of}^{this report, indirect actions a}^{re t}^{hose developed}
^{primarily to address other conc}^e^{rns, suc}^{h as im}^provemen^{ts in e}ⁿ^e^{rgy efficiency, e}^{nergy se}^{curity, or}^{air quality.}
^Exam^{ples of indirect actions inclu}^de:
^•^{Building codes: A maj}^{ority of states have}^{building codes that p}^{romote energy ef}^{ficiency in comme}^rc^{ial and}
^{residential structu}^{res; man}^{y of th}^{ese states’ standards a}^{re more st}^{ringent t}^han^{federal policy.}
^•^{Appliance Standards: Twelve stat}^{es have set}^ene^{rgy efficienc}^{y stan}^{dards for appliances}^{that a}^{re not}^covered
^{under t}^{he federal}^program.
^{For the above statistics a}^{nd more}^{information, see Pew Center o}ⁿ^{Global Climate Change, States and Regions, at}
^{[www.pewclimate.org/}^st^at^es-regi^oⁿ^s^{]; and}^{EPA, at [www.epa.gov/}^cl^ean^en^erg^y^/^eⁿ^e^rg^y^-^p^r^o^g^ra^m^s^/^s^t^a^t^e^-an^d^-^l^o^cal^].

Mandatory programs to require GHG reductions represent the most aggressive end of the state
action spectrum. As with state actions overall, these programs can vary significantly in scope,
stringency, and design. Mandatory programs are generating considerable interest and some
controversy. This section discusses the different types of mandatory programs and highlights the
regional initiatives and individual state actions that are currently in effect or under development.
Arguably, the most significant action on the state level in recent years has involved the
development of regional agreements to address GHG emissions. As of the date of this report, 23
states have joined—more states are acting as observers—one of the 3 regional partnerships that
would require GHG (or only CO²) emission reductions (Figure 1). Except for the partnership
between 10 northeastern states, the regional activities are still in their developmental phases.
Moreover, the western and midwestern regional partnerships were initiated by state governors and
may not be approved and/or implemented by the relevant state legislatures.
In addition, the regional agreements may raise legal issues, particularly constitutional concerns.
Article I, Section 10, Clause 3 of the U.S. Constitution states that “[n]o State shall, without the
Consent of Congress ... enter into any Agreement or Compact with another State, or with a
foreign Power.... ” In particular, two of the regional agreements include Canadian provinces.
However, it is uncertain whether this clause (the “compact clause”) will create legal hurdles for
any of the agreements.

Figure 1. Regional Activities to Control Greenhouse Gas Emissions
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^W^ester^{n C}^{limate Initiativ}^e^Midw^est^A^ccor^d^{00000000000000000000}^R^e^{gional G}^H^G^Initiativ^e
^Source:^Prepa^{red by CRS.}
^Note:^F^{igure 1 only includes}^stat^{es that are}^participa^{nts in t}^{he reg}^{ional agreements. Several states a}^{re acting as}
^{observers in}^{the initiatives in thei}^{r regions.}
One of the more significant climate change developments at the state level is the Regional
Greenhouse Gas Initiative (RGGI, pronounced “Reggie”). RGGI has been under development
since 2003, when states from the Northeast and Mid-Atlantic regions began to discuss setting up a
cooperative effort to reduce carbon dioxide emissions. Subsequent meetings and workshops
culminated in a Memorandum of Understanding (MOU) that was signed in December 2005. ¹³
RGGI is a market-based effort by 10 states—Connecticut, Delaware, Maine, Maryland, ¹⁴
Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont—to reduce
carbon dioxide emissions from power plants. RGGI would set up the nation’s first mandatory ¹⁵
cap-and-trade program for carbon dioxide.
The initial objective of RGGI is to stabilize current carbon dioxide emissions from power plants
in RGGI states, starting in January 2009, followed by a 10% reduction by 2019. A primary
strategy of RGGI is to create a program with flexibility, so that in the future other emission
sources/sectors, GHGs, or states could be included.

¹³^Ma^r^y^la^{nd G}^ove^r^nor^O^’^Ma^lle^y^sⁱ^gⁿ^e^d^R^G^G^I^’^s^Mem^o^r^a^ndum^of^Unde^r^s^ta^nd^ing^oⁿ^A^p^r^{il 2}⁰^,²⁰⁰⁷^,^m^a^kⁱ^ng^Ma^r^y^la^nd
^t^h^{e f}ⁱ^rst^st^at^{e t}^h^at^w^a^{s n}^o^t^an^o^rⁱ^gⁱⁿ^al^RGG^I^pa^rtic^ipaⁿ^{t t}^o^j^oⁱⁿ^the^r^e^gⁱ^ona^{l init}^ia^tiv^e^.
¹⁴^Ma^s^s^a^c^hus^e^tts^a^{nd R}^h^o^d^e^I^s^la^nd^w^e^r^e^inv^o^lv^e^d^{in R}^G^G^I^’^s^de^ve^lop^m^eⁿ^{t f}^r^o^m^the^be^gⁱⁿⁿⁱ^ng^{. H}^o^w^e^ve^r^,^bot^{h s}^t^a^t^e^s^’
^g^o^v^e^r^nor^s^de^c^line^d^{to s}ⁱ^gⁿ^the^Me^m^o^r^a^ndum^of^U^nde^r^s^ta^ndingⁱⁿ²⁰⁰⁵^{, c}^iti^ng^c^o^s^t^s^a^s^theⁱ^r^pr^im^a^r^y^r^a^tiona^le^f^o^rⁿ^o^t
^pa^r^tic^ipa^ting^.^Ma^s^s^a^c^hus^e^tts^a^nd^R^hode^I^s^la^nd^joiⁿ^e^d^R^G^G^I^a^s^pa^r^t^ic^ipaⁿ^tsⁱⁿ^J^a^nua^r^y²⁰⁰^7.
¹⁵^In^{a cap}^-and^-t^rad^e^sy^st^e^m^,^re^gu^l^a^t^o^{rs set}^{a cap}^(o^r^lⁱ^mⁱ^t⁾^oⁿ^t^h^e^o^v^eral^l^emⁱ^s^si^oⁿ^s^o^f^{a gi}^ven^gas^f^r^o^m^{a sp}^eci^fⁱ^ed
^g^r^oup^of^s^our^c^e^s^{, s}^u^c^h^a^s^pow^e^r^plaⁿ^ts^{. T}^h^e^e^m^is^sⁱ^ons^a^llow^e^{d und}^e^r^the^ne^w^c^a^p^a^r^e^theⁿ^a^lloc^a^t^e^dⁱⁿ^the^f^o^r^m^of
^credⁱ^t^s^(o^r^p^e^rmⁱ^t^s^{) t}^oⁱⁿ^di^vi^d^u^a^l^s^o^u^r^ces.^S^o^u^r^{ces t}^h^at^emⁱ^t^m^o^{re t}^h^an^t^h^ei^{r al}^l^o^w^aⁿ^ce^m^u^st^b^u^y^credⁱ^t^s^f^r^o^m^t^h^o^s^{e w}^h^o
^e^m^{it le}^{ss tha}ⁿ^theⁱ^r^a^llow^a^nc^e^,^th^{us c}^r^e^a^ting^a^fⁱ^na^nc^ia^{l in}^cen^tⁱ^v^{e fo}^{r sou}^r^{ces t}^o^redu^{ce t}^h^ei^r^o^wⁿ^emi^ssi^oⁿ^s^.^F^o^{r m}^o^re
^inf^o^r^m^a^{tion on c}^a^p^-^a^nd-^tr^a^d^e^s^y^s^t^em^s^,^s^e^e^EP^A^’^s^w^e^bs^ite^a^t^http:/^/e^pa^.g^ov^/a^ir^m^a^r^k^e^t^s^/^c^a^p^-^t^r^a^de^/inde^x^.^htm^l^.

Some observers consider RGGI to be a possible test-case for a federal cap-and-trade program,
and thus several of RGGI’s design elements are generating interest and debate. For example, one
specific feature—the emission allocation scheme—is drawing both praise and criticism. In both
RGGI’s Memorandum of Understanding and its Model Rule, states agreed that at least 25% of ¹⁶
emission allowances will be allocated for a “consumer benefit or strategic energy purpose.”
Since then, all of the states have indicated—either through legislation or rulemakings—that they
intend to allocate more than 25% of their state’s emissions allowances for various purposes ¹⁷
related to those two overarching objectives.
This allocation strategy requires power plants to purchase the allowances through an auction, ¹⁸
instead of receiving them at no charge. On September 25, 2008, RGGI participants held the first
emission allowance auction related to climate change mitigation. Six RGGI states—Connecticut,
Maine, Maryland, Massachusetts, Rhode Island, and Vermont—sold allowances for the first ¹⁹
RGGI compliance period (2009-2011). By many accounts, the auction was successful: the
clearing price as $3.07/ton (60% higher than the reserve price); compliance entities received ²⁰
about 80% of the allowances; and states received nearly $40 million in revenues.
Although RGGI is one of the more aggressive state programs addressing climate change, the
program has received some criticism and may face upcoming challenges. For example, recent
emissions data indicate that the RGGI cap—188 million short tons of carbon dioxide—will most
likely be higher than actual emissions, when RGGI goes into effect in 2009. The cap was set
slightly above (about 4%) the average emission levels observed between 2000 and 2002. RGGI
designers anticipated that emissions would gradually increase, so that actual levels would
approximately match the cap in 2009. Although emissions increased in 2007 from their relatively
dramatic decline of 2006, emissions data from the first half of 2008 are similar to 2006 figures, ²¹
suggesting that 2008 emission are unlikely to increase further; another estimate projects that ²²

2008 emissions may go as low as 150 mtCO², approximately 20% below the 2009 cap.

¹⁶^Se^e^R^G^G^I^Mode^{l R}^u^le^,^is^s^u^e^d^A^u^g^u^s^t¹⁵^,²⁰^06,^p.⁴²^{; a}ⁿ^{d R}^G^G^I^Me^m^o^r^a^ndum^of^U^nde^r^s^ta^nding^,^Se^c^{tion G}⁽¹⁾^,
^sigⁿ^ed^b^y^p^a^rticip^atin^g^{state g}^o^v^e^rn^o^r^{s Decem}^b^e^{r 2}⁰^,²⁰⁰⁵^,^b^o^t^h^av^ailab^l^{e at h}^t^t^p^://w^ww^.rg^g^i.o^r^g^/^m^o^d^e^lru^l^e.^h^t^m^.
¹⁷^Envⁱ^ro^nm^eⁿ^{t Northe}^a^s^{t c}^o^m^p^ile^{d a}^sum^m^a^r^y^of^the^sta^t^e^s^{’ pla}ⁿ^{s re}^g^a^rding^e^m^{ission a}^lloc^a^tio^{n, a}^t^htt^p^://w^ww^.^e^nv^-
ⁿ^e^.o^rg^/^P^u^b^licatioⁿ^s^-an^d^-Data.
¹⁸^For^m^o^r^e^dis^c^us^sⁱ^oⁿ^r^e^g^a^r^d^ing^t^h^e^s^e^is^s^u^e^s^{, s}^e^e^C^R^S^R^e^por^{t R}^L³⁴⁵⁰²^,^Em^is^sⁱ^oⁿ^A^llow^anc^e^All^o^c^a^ti^{on i}ⁿ^{a C}^a^p-^a^nd-
^Tr^ade^Pr^ogr^am^:^O^p^ti^ons^an^{d C}^o^ns^ide^r^ati^ons^,^by^J^ona^thaⁿ^L^.^R^a^m^s^e^u^r^.
¹⁹^A^{ll 10 s}^t^a^t^e^s^inte^{nd t}^o^s^e^{ll a}^por^tⁱ^on^of^theⁱ^r^a^llow^a^nc^e^s^{in a}^s^u^bs^e^q^ue^{nt a}^u^c^tⁱ^oⁿ^D^e^c^e^m^b^e^r^17,²⁰^08.
²⁰^{For m}^o^re^de^ta^{ils, se}^e^the^“^P^ost-A^u^c^tio^{n Re}^por^ts,”^a^t^ht^tp:/^/rg^gⁱ^.org^/c^o2-^a^u^c^tio^ns^/^r^e^s^ults^/a^uc^tion^_¹^_^re^ports.
²¹^Eⁿ^vi^ron^m^en^t^No^rt^h^east^,^Em^is^sⁱ^oⁿ^s^Tr^e^nds^an^{d t}^h^e^Iⁿ^au^gur^{al Al}^lo^w^anc^e^Auc^tⁱ^oⁿ^(S^ep^t^e^m^b^{er 2}⁰⁰⁸⁾^,^at
^http:^//www^.e^nv^-ne^.^org^.
²²^Poⁱⁿ^t^C^a^r^b^oⁿ^,^{RGGI’s First A}^u^c^t^{ion: W}^ill^S^hort-te^{rm Ex}^pe^c^t^a^tio^ns^Pre^v^a^il?⁽^S^e^p^te^m^b^e^r²⁰⁰⁸⁾^.

Figure 2. Comparison of Observed Emissions from RGGI Facilities (2000-2007) to
RGGI Cap (effective in 2009)
⁾
190.0

185.0^o^r^{t tons}

180.0^s^h

175.0^l^lⁱ^on

170.0^(mⁱ

165.0^on^s

160.0ⁱ^s^sⁱ

155.0^E^m

150.0^O²

⁰⁰⁰¹⁰²⁰³⁰⁴⁰⁵⁰⁶⁰⁷⁰⁸⁰⁹¹⁰¹¹¹²¹³¹⁴¹⁵¹⁶¹⁷¹⁸^C
²⁰²⁰²⁰²⁰²⁰²⁰²⁰²⁰²⁰²⁰²⁰²⁰²⁰²⁰²⁰²⁰²⁰²⁰²⁰
^O^b^s^e^r^v^ed^E^m^is^sⁱ^on^s⁽²⁰^00-²⁰⁰⁷⁾
^E^m^is^sⁱ^on^C^{ap (}^s^t^a^r^tⁱ^{ng i}ⁿ²⁰⁰⁹⁾
^Source:^Prepa^{red by CRS with d}^{ata from the}^following:^observed^{state emission data (200}^0-2⁰⁰⁶⁾^{provided by}
^{RGGI; 2}⁰⁰⁷^{data p}^{rovided by E}ⁿ^v^{ironment Nort}^{heast. Note t}^{hat E}^nvironment^Northea^{st gene}^rated^{its data}
^{from EPA’s Clean Air Mar}^{kets da}^{ta, at http://www.epa.gov/airmarkets/.}
If actual emissions are below the cap when it goes into effect, the effectiveness of the RGGI
program may be impacted. The allowance price might drop to such a low level that facilities ²³
would have no financial incentive to make reductions beyond their required allocation. This
potential problem may be alleviated by the opportunity for affected sources to bank emission
reductions for future use, when the cap will likely be lower than expected emissions. The RGGI
program allows unlimited banking. The ability to bank reductions effectively spreads the costs of
emission reduction over time. Banking emissions would reduce compliance costs in the future,
but also increase the value of current allowances (because they can be sold later). The incentive to
make additional reductions would remain. The recent auction sales data support this notion, as the
clearing price was above the reserve price.
In addition to allocation concerns, a critical design detail—electricity imports from non-RGGI
states—is arguably unresolved. This is often described as the “leakage” problem. Leakage can
occur when an emissions reduction program does not include all sources contributing to the
environmental problem. For example, if a RGGI state lowers its emissions by importing more
power from a non-RGGI state, the emissions reductions in the RGGI state may be offset by an
emission increase in the exporting state. A RGGI working group issued a final report on leakage
March 2008. Among the four recommendations, the working group concluded that states should
monitor for emissions leakage and evaluate whether more aggressive measures—e.g., carbon ²⁴
adders, procurement emissions rates, or load-based caps—should be considered at a later date.

²³^T^h^is^pr^o^b^le^m^oc^c^u^r^r^e^{d dur}^ing^th^e^fⁱ^r^s^{t pha}^s^e^of^the^Eur^o^pe^aⁿ^Uⁿⁱ^on’^s^Em^is^sⁱ^{on T}^r^a^d^ing^Sy^s^t^em^{. For}^m^o^r^e
^dis^c^us^sⁱ^on^s^e^e^C^R^S^R^e^por^{t R}^L³⁴¹⁵⁰^,^C^lim^ate^C^h^an^ge^a^nd^the^EU^Em^is^sⁱ^ons^Tr^adi^ng^Sc^he^m^e⁽^E^TS)^:^K^y^oto^an^d
^Be^y^ond^,^b^y^L^a^rr^y^P^a^rk^er.
²⁴^Se^e^RG^G^I^E^m^is^sⁱ^ons^L^e^ak^ag^e^Multi-Sta^t^e^Sta^f^f^W^o^rk^ing^G^r^{oup t}^o^the^RG^G^I^A^g^eⁿ^cy^H^e^a^d^s^,^Pote^nt^{ial Emissi}^ons
^Le^ak^age^an^{d t}^h^e^Re^gi^on^{al G}^r^e^eⁿ^hous^e^G^a^s^Iⁿ^it^iativ^e⁽^R^G^G^I⁾^,^(Ma^r^c^h²⁰⁰⁸⁾^{, a}^t^http^://w^w^w^.r^g^gⁱ^.org^/^a^bout^/^doc^um^eⁿ^ts^.

Seven U.S. states and four Canadian provinces are participating in the Western Climate Initiative ²⁵
(WCI). WCI got off the ground in February 2007, when the governors of six western states—
Arizona, California, Oregon, New Mexico, Utah, and Washington—agreed to reduce GHG ²⁶
emissions in their region. Montana and the four Canadian provinces—British Columbia, ²⁷
Manitoba, Quebec, and Ontario—joined at later dates. The states and provinces set a regional,
economy-wide target to reduce GHG emissions to15% below 2005 levels by 2020. In order to
implement this target, the participants agreed to develop a market-based program, such as a
“load-based cap and trade program.”
In September 2008, the WCI developers issued design recommendations for meeting the emission
reduction goals. The recommendations include a cap-and-trade system that would cover
emissions from electricity generation and large industrial and commercial sources in 2012. In

2015, the program would cover emissions from the transportation sector and fuel consumption ²⁸

from residential, commercial, and industrial uses not otherwise covered. The recommendations
also include flexible design elements, such as unlimited emission banking, three-year compliance
periods, and offsets, which may satisfy up to 49% of the emission reductions. Although this
number may appear relatively high compared to federal cap-and-trade proposals, limiting offsets
by percentage of reductions is different from limiting offsets as a percentage of allowance
submissions (as many federal proposals would do). As a comparison that may provide additional
context, RGGI participants agreed to a similar principle: at least half of the reductions should
come from covered sources, thus allowing offsets to cover up to 50% of reductions. To apply this ²⁹
principle, RGGI designers allow offsets to satisfy up to 3.3% of a compliance submission. In
contrast, most federal proposals would allow domestic offsets to satisfy at least 15%
(international offsets often add a further percentage) of a covered sources allowance submission.
Although the WCI is still in early development, there are several issues that may hinder its
implementation. As noted, the WCI is an agreement between the states’ governors. To implement
the program, the states’ legislatures would need to enact laws to carry out the initiative’s
objectives. This may present an obstacle if a state’s legislative branch finds fault with the
reduction program developed by states’ executive branch officials.
On November 15, 2007, the governors of six states—Illinois, Iowa, Kansas, Michigan,
Minnesota, and Wisconsin—signed the Midwestern Regional Greenhouse Gas Reduction

²⁵^{For t}^h^e^te^x^t^of^the^a^g^re^e^m^eⁿ^{t, se}^e^htt^p^://w^ww^.^w^e^s^te^rnc^lⁱ^m^a^t^eⁱ^nitia^tiv^e^.^org^/^.
²⁶^Uta^h^jo^ine^d^theⁱⁿ^itia^tiv^e^Ma^y^{21, 20}⁰⁷^{; t}^h^e^fⁱ^v^e^othe^{r sta}^t^e^s^we^re^c^h^a^r^te^{r m}^e^m^b^e^r^{s, sig}ⁿ^ing^the^a^g^re^e^m^eⁿ^{t Fe}^brua^ry
^{26, 20}⁰⁷^.
²⁷^Mo^ntaⁿ^a^j^o^ine^d^Ja^nua^ry²⁰⁰^{8; B}^r^{itish C}^o^lum^b^ia^sigⁿ^e^d^A^p^{ril 2}⁰⁰⁷^{; Ma}ⁿ^ito^ba^sigⁿ^e^d^Ju^ne²⁰⁰⁷^{; Q}^u^e^b^e^c^joiⁿ^e^d^A^p^ril
²⁰⁰^{8; O}ⁿ^ta^rⁱ^o^joiⁿ^e^d^J^u^ly²⁰⁰^8.
²⁸^Se^e^W^e^ste^r^{n Clim}^a^t^e^Initia^tiv^e^,^D^e^sⁱ^{gn Re}^c^o^m^m^e^nd^ati^ons^f^o^r^the^W^C^I^Re^gion^al^C^ap-^an^d-^Tr^a^d^e^Pr^ogr^am
^(Se^p^te^m^b^e^r²⁰⁰^{8), a}^t^http^://w^ww^.^w^e^s^te^rnc^lⁱ^m^a^t^eⁱ^nitia^tiv^e^.^org^/^.
²⁹^T^h^{e 3}^.³^%^fⁱ^gu^{re i}^s^b^a^sed^on^an^e^s^tⁱ^m^at^{e o}^f^red^u^c^tⁱ^oⁿ^sⁿ^eed^ed^t^o^m^eet^t^h^{e em}ⁱ^ssi^oⁿ^s^cap^.^RGG^I^d^e^ve^l^o^p^e^{rs est}ⁱ^m^at^ed
^t^h^at^,^co^m^p^ared^t^o^a^b^u^sⁱⁿ^ess-as-u^su^al^estⁱ^m^at^{e o}^f^e^mⁱ^ssi^oⁿ^s^,^co^vere^d^sou^r^{ces w}^o^u^l^dⁿ^eed^t^o^re^d^u^{ce em}ⁱ^s^si^oⁿ^s^b^y
^a^ppr^ox^im^a^t^e^l^y^6.6%⁽^{on a}^v^e^r^a^g^e⁾^thr^o^ug^{h 2}⁰¹²^{, a}^t^w^h^ic^{h tim}^e^the^p^r^og^r^a^m^w^ould^un^de^r^g^{o a}^c^o^m^p^r^e^he^ns^iv^e^r^e^vⁱ^ew^.
^T^hus^{, the}^pe^r^c^eⁿ^ta^g^e^m^y^c^h^aⁿ^g^e^ba^s^e^{d on}^u^pda^te^d^e^s^tim^a^t^es^{. For}^a^f^u^r^t^he^r^e^x^plaⁿ^a^tio^{n of}^R^G^G^I^’^s^of^f^s^e^t^r^a^tiona^le^{, s}^e^e
^http:^//w^w^w^.r^g^gⁱ^.or^g^/^doc^s^/^of^f^s^e^t^s^_^lim^it_5_1^_0^6.^pdf^.

Accord.³⁰ The Premier of the Canadian Province of Manitoba also signed the Accord, potentially
raising the same legal issues discussed above.
The Accord does not establish discrete GHG emissions targets, but directs the participating states
(and their relevant state agencies) to set their own GHG emission reduction targets. In order to
meet these GHG emission targets, the Accord calls for the participants to develop a cap-and-trade
program and a model rule by November 2008. Although draft recommendations were made
available November 2008, the time line was amended by the participants: a draft model rule is ³¹
now scheduled for September 2009.
The participants agreed that full implementation of the Accord will be completed by May 2010.
Although not full participants in the Accord, the Governors of Indiana, Ohio, and South Dakota
signed on as observers, agreeing to participate in the formation of the regional cap-and-trade
system.
Individual state efforts that seek to reduce GHG emissions cover a range of activities. Outside of
regional agreements, several states currently require power plants to make GHG emission ³²
reductions or submit offsets. Other states are developing “economy-wide” GHG emission
reduction programs. Multiple states are planning to adopt California’s motor vehicle standards for
GHG emissions. In addition, states are working on other mechanisms that would require GHG
emission reductions. These state efforts are discussed below.
Three states—California, Hawaii, and New Jersey—have passed legislation that lays the
groundwork for “economy-wide” reduction programs. In general, the state statutes lack critical
details regarding the design of the reduction programs. Instead, the statutes direct state agencies
to develop the logistical elements that would implement the reduction requirements. However,
these programs vary substantially in their progress of development, the California program being
well ahead of the other programs. These programs are described below.
In September 2006, California enacted landmark legislation—AB 32 or the Global Warming ³³
Solutions Act—that would establish a comprehensive GHG reduction regime. The legislation is
far-reaching in principle, but does not include many crucial details. Instead, the act directs the
California Air Resources Board (CARB) to develop and implement a statewide program that
would reduce the state’s GHG emissions to 1990 levels by 2020.

³⁰^T^h^e^te^x^t^of^the^A^c^c^o^{rd is a}^v^a^ila^ble^a^t^http^://w^ww^.^m^idwe^ste^r^ng^ov^e^r^nors.^org^/^re^soluti^ons/^G^H^GAc^c^o^rd.pdf^.
³¹^Fo^{r m}^o^{re d}^e^{tails, see th}^{e A}^cco^rd^’^s^w^e^b^s^{ite at h}^ttp^://w^ww^.^m^id^w^e^st^e^rⁿ^acco^rd^.o^rg^.
³²^A^l^so^d^e^scrib^e^d^{as statew}^id^{e o}^r^mu^lti-secto^r^{, “eco}ⁿ^o^m^y^-^wⁱ^d^e”^G^H^G^e^mⁱ^ssioⁿ^red^u^c^ti^oⁿ^s^p^r^o^g^ram^s^s^eek^to^coⁿ^t^ro^{l an}^d
^r^e^duc^e^e^m^is^sⁱ^ons^f^r^o^m^s^e^v^e^r^a^{l econom}^ic^s^e^c^t^or^s^.^Iⁿ^g^e^ne^r^a^{l, t}^h^e^s^e^pr^og^r^a^m^s^c^ove^r^the^s^e^c^t^or^s^—^e^.^g^{., e}^l^e^c^t^rⁱ^cⁱ^t^y
^gen^e^ratⁱ^oⁿ^,ⁱⁿ^du^st^ry^,^an^d^t^r^an^spo^r^t^a^tⁱ^oⁿ^—^t^h^at^acco^un^t^f^o^{r t}^h^{e vast}^maj^o^ri^t^y^o^f^{a st}^at^{e’s e}^mⁱ^ssi^oⁿ^s^.^Dep^eⁿ^dⁱⁿ^g^oⁿ^t^h^e
^de^sⁱ^gⁿ^of^the^pr^og^r^a^m^,^s^o^m^e^s^e^c^t^or^s⁽^e^.g^{., a}^g^rⁱ^c^u^ltur^a^l^or^r^e^sⁱ^de^ntia^l)^m^a^y^be^ex^c^l^ude^d.
³³^C^a^lif^or^nia^G^o^v^e^r^nor^Sc^hw^a^r^z^eⁿ^eg^g^e^r^sⁱ^gⁿ^e^d^the^le^gⁱ^s^l^a^tio^{n Se}^pte^m^be^r^{27, 2}⁰⁰⁶^.

The statute grants considerable authority to CARB, which is charged with determining critical
details concerning the framework and applicability of the program. For example, the law does not
specifically require the use of a market-based system, such as a cap-and-trade program, to reduce
GHG emissions. Instead, AB 32 authorizes CARB to develop regulations to “achieve the
maximum technologically feasible and cost-effective GHG emission reductions.... ” Moreover, ³⁴
the statute does not include a list of regulated emission sources or categories, but instructs ³⁵
CARB to determine which sources are necessary to meet the statewide target.
The statute does dictate a schedule for various agency deadlines. The following dates highlight
significant milestones of the mandatory schedule:
• June 30, 2007: Identify the early reduction options, which can be implemented
prior to the mandatory program, and for which a facility will receive emissions
credit. In October 2007, CARB submitted its final report of early actions, which ³⁶
are to be implemented via regulation and enforceable by January 1, 2010.
• January 1, 2008: Establish the 1990 baseline, which becomes the 2020 emissions ³⁷
cap. A baseline estimate is a critical determination for a cap-and-trade program.
On December 7, 2007, CARB approved a baseline of 427 million metric tons of
carbon dioxide equivalent (mmtCO²e).
• January 1, 2008: Develop a mandatory reporting scheme for sources that will
covered by the cap. Sources report emissions for four years in order to establish
accurate facility baselines. CARB submitted regulations for approval to the ³⁸
Office of Administrative Law in October 2008. The regulations would require
the first emissions reports to be submitted in 2009 based on 2008 emission ³⁹
levels.
• January 1, 2011: Finalize regulations, including possible market-based programs,
that will implement the statewide emissions cap. Related to these efforts, the ⁴⁰
Scoping Plan was prepared in October 2008 and awaits approval from CARB.
• January 1, 2012: Implement and enforce the mandatory emission reduction
program created in 2011.

³⁴^Ea^rlie^{r dra}^f^{ts of}^the^le^gⁱ^sla^{tion sp}^e^cⁱ^fⁱ^c^a^l^l^y^c^ite^{d the}^e^l^e^c^t^ric^pow^e^r^{, oil/g}^a^s^{, a}ⁿ^d^c^e^m^eⁿ^{t in}^dustrie^{s, a}ⁿ^{d la}ⁿ^d^f^{ills a}^s
^sigⁿ^if^ic^aⁿ^{t e}^m^itte^rs.
³⁵^T^h^e^sta^t^ute^instruc^t^{s CA}^{RB to re}^g^u^la^te^m^obile^sourc^e^s^if^the²⁰⁰⁴^m^obile^s^our^c^e^s^r^e^g^u^la^tor^y^pr^og^r^a^m⁽^d^e^s^c^r^ibe^d
^a^bov^e⁾^doe^{s n}^o^{t re}^m^a^{in in e}^f^f^e^c^t^(pre^sum^a^bl^y^due^{to le}^g^a^{l c}^h^a^lle^ng^e^s^).
³⁶^CA^RB,^Ex^pande^{d Lis}^t^of^Ear^l^y^A^c^{tion M}^e^as^ur^e^s^t^o^Re^d^u^c^e^G^r^e^e^nhous^e^G^a^s^Em^is^sⁱ^onsⁱⁿ^C^a^lif^or^nia^Re^c^o^m^m^e^nde^d
^for^Bo^ar^{d C}^onsⁱ^d^e^r^ati^oⁿ^(Oct^o^b^e^{r 2}⁰⁰⁷⁾^,^at^ht^t^p^:^/^/^www^.^a^rb^.^ca.^go^v/^cc/^cce^a/^rep^o^r^t^s^/^r^ep^o^r^t^s^.^h^t^m^.
³⁷^P^a^s^t^e^s^tim^a^t^es^of¹⁹⁹⁰^le^v^e^ls^r^a^ng^e^d^f^r^o^m^a^low^of^{425 m}^m^tC^O²^e^t^o^{a hi}^gh^o^f⁴⁶⁸^m^m^t^C^O²^e.^T^hⁱ^sⁱ^s^{a 1}⁰^%^vari^an^ce
^be^tw^e^eⁿ^low^a^{nd hig}^h^e^s^tim^a^t^e^s^.^Se^e^C^a^lif^or^nia^Ene^r^g^y^C^o^m^m^issⁱ^on,^Iⁿ^v^e^ntor^y^of^C^a^lif^or^nia^G^r^ee^nhous^e^G^a^s
^Em^is^sⁱ^ons^a^{nd Si}^nk^s^:¹⁹⁹⁰^to²⁰⁰⁴^—^F^ina^l^Sta^f^f^R^e^por^{t, D}^e^c^e^m^b^e^r^22,²⁰⁰⁶^{, p}^.⁴^.
³⁸^T^h^is^of^fⁱ^ce^ha^s^until^D^e^c^e^m^b^e^r^{2, 20}^08,^to^m^a^ke^a^de^te^r^m^ina^tion.^F^o^r^u^pda^te^d^inf^o^r^m^a^{tion, s}^e^e
^http:^//w^w^w^.a^r^b^.c^a^.^g^o^v^/^r^e^g^a^c^t^/²⁰⁰⁷^/^g^hg^2007/^g^h^g²⁰⁰^7.^htm^.
³⁹^A^c^co^rdⁱⁿ^g^t^o^CA^{RB, th}^{e rep}^o^r^tin^g^reg^u^latioⁿ^s^w^{ill acc}^{ount f}^o^r^a^p^p^r^ox^im^a^t^e^l^y^94%^of^the^tota^{l C}^O²^pr^o^duc^e^dⁱⁿ
^C^a^lif^or^nia^f^r^o^m^indus^tr^ia^l^a^{nd c}^o^m^m^e^r^c^ia^{l s}^t^a^tiona^r^y^s^our^c^e^s^of^em^issⁱ^ons^{. Se}^e^h^ttp:/^/w^w^w^.a^r^b^.c^a^.^g^o^v^/^r^e^g^a^c^t/200^7/
^g^h^g²⁰⁰⁷^/^g^hg^2007.^htm^.
⁴⁰^Se^e^htt^p^://w^ww^.^a^rb.c^a^.^g^o^v^/^c^c^/^sc^opi^ng^plaⁿ^/^doc^um^eⁿ^t/^sc^oping^plaⁿ^doc^um^eⁿ^t.htm^.

In June 2007, Hawaii enacted the Global Warming Solutions Act of 2007, mandating statewide
GHG emissions reduction to 1990 levels by 2020. The statute establishes a GHG emissions
reduction task force, which is directed to offer policy recommendations by January 1, 2009.
Before December 31, 2011, the Department of Health is instructed to adopt implementing
regulations that would take effect January 1, 2012. Similar to California’s statute, Hawaii’s act
does not specify details, but gives considerable responsibility to the Department of Health. The
act does require the Department of Health “to endeavor to make the requirements consistent with
the requirements of international, federal, and other states’ greenhouse gas emission reporting ⁴¹
programs, as necessary.”
In July 2007, New Jersey enacted the Global Warming Response Act, which states that GHG
emissions shall be reduced to 1990 levels by 2020 and to 80% below 2006 levels by 2050. The
statute instructs the Department of Environmental Protection (DEP) to develop a GHG emissions
inventory for the baseline years—1990 and 2006—and a system for monitoring and reporting
GHG emissions from specific sources (e.g., electricity generators), as well as entities deemed to
be significant emitters by the DEP. The law does not specify how the reductions will be met, but
directs the DEP, in coordination with other agencies, to submit recommendations to the governor ⁴²
and state legislature. In response to this provision, the DEP prepared a report November 2008.
However, unlike the California and Hawaii statutes, the New Jersey act does not grant specific
authority to DEP to implement the reduction program through regulation. Although not
specifically stated, further legislative action would likely be required to implement the reduction ⁴³
program.
A sector-specific approach that focuses on carbon dioxide is relatively easier to implement than
an economy-wide program that includes multiple GHGs. The electricity-generating sector is often
considered a primary candidate for emission reduction, because in most states electric power ⁴⁴
plants account for the highest percentage of carbon dioxide emissions. Many of these facilities
are already tracking their carbon dioxide emissions as required by the 1990 Clean Air Act.
Both Oregon and Washington have programs that require new power plants to reduce carbon
dioxide emissions or purchase offsets. In 1997, Oregon became the first state to regulate carbon

⁴¹^Se^c^tion⁸^of^the^a^c^t^{, r}^e^vⁱ^sⁱ^ng^H^a^w^a^{ii R}^e^vⁱ^s^e^{d Sta}^t^ute^§³⁴^2B^.
⁴²^New^J^e^rse^y^DEP^,^N^e^w^J^e^r^s^e^y^G^r^e^e^nhous^e^G^a^s^Iⁿ^v^eⁿ^t^o^r^y^an^{d Re}^fe^r^e^nc^e^C^a^s^e^Pr^oje^c^tions¹⁹^90-²⁰²⁰⁽^N^ov^e^m^be^r
²⁰⁰^8),^a^t^htt^p^://w^ww^.nj.g^o^v^/^g^l^oba^lw^a^r^mⁱ^ng^/.
⁴³^A^c^c^o^rding^t^o^aⁿ^of^fⁱ^cⁱ^a^l^w^{ith the}^NJ^DEP^,^e^x^isting^sta^t^utory^a^u^th^or^itie^{s m}^a^y^a^llow^so^m^e^re^g^u^la^tions^{to m}^o^v^e^f^o^r^w^a^r^d
^w^{ithout a}^d^diti^ona^l^le^gⁱ^s^l^a^tiv^e^a^c^tⁱ^{on. H}^o^w^e^v^e^r^,^s^ubs^e^que^{nt le}^gⁱ^s^l^a^tⁱ^v^e^a^c^{tion is}^m^o^s^t^lik^e^l^yⁿ^ecess^a^r^y^t^oⁱ^m^p^l^em^en^t^t^h^e
^r^e^duc^tio^{n r}^e^gⁱ^m^e^{in f}^u^{ll (}^p^e^r^te^le^p^hone^c^onv^e^r^s^a^tion,^A^u^g^u^s^t^28,²⁰⁰⁷⁾^.
⁴⁴^B^a^s^e^{d on}²⁰⁰¹^da^ta^{. E}ⁿ^e^r^g^y^Iⁿ^f^o^r^m^a^{tion A}^d^mⁱ^nis^t^r^a^{tion, Em}^is^sⁱ^on^s^of^G^r^e^e^nhous^e^G^a^s^e^s^{in the}^Uⁿⁱ^t^e^d^Sta^t^e^s²⁰⁰⁴
^(T^ab^{le C2}^).

dioxide emissions by passing legislation⁴⁵ requiring new power plants to equal or exceed carbon
dioxide levels that are 17% below the best natural gas-fired plant in the nation. Plants can either
reduce emissions directly or purchase offsets from a nonprofit organization (the Oregon Climate
Trust) that was established with the 1997 law. This organization helps develop various projects
that will reduce or sequester GHG emissions. These projects generate the pool of offsets available
(by purchase) to the power plants. So far, all of the new facilities have chosen to purchase offsets ⁴⁶
instead of reducing onsite emissions. Washington passed similar legislation in 2004, requiring ⁴⁷
new power plants to offset 20% of their carbon dioxide emissions.
These states have established emission reduction requirements at existing power plants:
• Massachusetts: In 2001, Massachusetts became the first state to take formal
action on carbon dioxide emissions at operational power plants. As part of a
multi-pollutant strategy, which went into effect in 2006, the state’s six largest
power plants must reduce carbon dioxide to levels consistent with those produced ⁴⁸
in the late 1990s. In 2008, this cap was lowered further. The program allows the
plants to either make the reductions, demonstrate offsite reductions, or purchase
emissions credits from other verifiable sources. Note that the carbon dioxide
components of this program will be superceded when RGGI goes online in 2009.
RGGI will require reductions from 32 power plants in the state.
• New Hampshire: In 2002, the state enacted multi-pollutant legislation⁴⁹ requiring
its three fossil fuel power plants to reduce carbon dioxide to 1990 levels by the
end of 2006. In order the meet the cap, the law allowed sources to bank early
reductions or buy credits through other programs deemed acceptable by state
officials. The carbon dioxide elements of this program also will be superceded by
RGGI.
In June 2008, Florida enacted legislation that authorizes the Florida Department of Environmental ⁵⁰
Protection to craft a cap-and-trade system that would cover the electric utility sector. Pending
subsequent approval by the state legislature, the cap-and-trade program would go into effect in

2010.

⁴⁵^H^B³²⁸³^{, c}^o^dⁱ^fⁱ^e^d^{in O}^r^e^g^{on A}^d^mⁱ^nis^t^r^a^tiv^e^R^u^le^s^,^C^h^a^p^te^r³⁴^5,^Dⁱ^vⁱ^sⁱ^{on 2}⁴^.
⁴⁶^P^oⁱⁿ^t^Carboⁿ^,²⁰⁰⁶^,^“Carboⁿ^T^r^adⁱⁿ^{g i}ⁿ^t^h^{e U}^S^:^T^h^{e Hi}^b^e^rn^atⁱⁿ^g^Gⁱ^an^t^,^”^Ca^rb^oⁿ^Ma^rket^Aⁿ^al^yst^{, Se}^pte^m^be^r^13,
²⁰⁰^6.
⁴⁷^H^B³¹⁴¹⁽^s^ig^ne^{d i}ⁿ^to^la^w^{on Ma}^r^c^{h 31}^{, 2}⁰⁰⁴⁾^.
⁴⁸³¹^{0 Ma}^s^s^a^c^hus^e^tts^C^o^de^of^R^e^g^u^la^tions^7.2⁹^.
⁴⁹^Ne^w^H^a^m^p^shire^Cle^aⁿ^P^o^w^e^{r Ac}^{t (Ma}^y^{9, 20}^02),^c^o^dⁱ^fⁱ^e^d^{in Ne}^w^Ha^m^p^shire^Sta^t^ute^,^T^itle^X^,^C^h^a^p^te^{r 12}^5-O
⁽^M^ulti^ple^Poll^utaⁿ^t^R^e^d^u^c^tⁱ^{on Pr}^o^g^r^am⁾^.
⁵⁰^H^B⁷¹³⁵^{, s}ⁱ^gⁿ^e^dⁱⁿ^t^o^la^w^J^une²⁵^{, 2}⁰⁰⁸^.

The U.S. transportation sector accounts for a substantial percentage—26% in 2006⁵¹—of the
nation’s GHG emissions. Automobiles and light-duty trucks (fueled by gasoline or diesel) ⁵²
generate the majority—62% in 2006—of the nation’s transportation-related GHG emissions.
The transportation sector is the single largest source of the primary GHG, carbon dioxide, in 17 ⁵³
states.
California’s transportation sector, in particular, generates almost 41% of the state’s annual ⁵⁴
greenhouse emissions. California is in a unique position regarding the regulation of air
emissions from motor vehicles. It is the only state with conditional authority (i.e., the state needs
a waiver from EPA) to develop motor vehicle pollution standards that are more stringent than ⁵⁵
federal requirements. The federal Clean Air Act permits other states to choose to follow ⁵⁶
California’s more stringent provisions, and states have adopted California standards in the past.
In 2002, California enacted the first state law (AB 1493) requiring GHG limits from motor ⁵⁷
vehicles. As directed by the statute, the California Air Resources Board (CARB) issued
regulations in September 2004, limiting the “fleet average GHG exhaust mass emission values ⁵⁸
from passenger cars, light-duty trucks, and medium-duty passenger vehicles.” The fleet average
caps first apply to model year 2009 vehicles. The caps become more stringent annually, so that by

2016, the fleet average would be 30% below the 2009 level.

At least 16 states have formally adopted or announced plans to follow the California regulation.⁵⁹
In order for the states to implement this standard, California must receive a waiver from the EPA.
California requested a waiver (as required by Section 209 of the Clean Air Act) in December
2005. In December 2007, EPA decided to deny the waiver request. EPA’s decision is being
challenged in court—by California and other states, and environmental groups. For more
discussion regarding this issue, see CRS Report RL34099, California’s Waiver Request to Control
Greenhouse Gases Under the Clean Air Act, by James E. McCarthy and Robert Meltz.

⁵¹^EP^A,^Iⁿ^v^eⁿ^tor^y^o^f^U^.^S^.^G^r^e^e^nho^us^e^G^a^s^Em^is^sⁱ^oⁿ^s^a^nd^Si^nk^s^:¹⁹^90-²⁰⁰⁶^,^E^xecu^tⁱ^{ve S}^u^mma^ry⁽²⁰⁰⁸⁾^,^a^t
^http:^//e^pa^.g^ov^/^c^li^m^a^te^c^h^a^nge^/emⁱ^s^sⁱ^ons^/^u^sⁱ^nv^eⁿ^tor^y^r^e^por^t.htm^l^.
⁵²^T^h^e^tr^aⁿ^s^por^ta^ti^on^s^e^c^t^or^a^l^s^oⁱⁿ^c^l^ude^s^e^m^is^sⁱ^ons⁽ⁱⁿ^de^s^c^e^nding^or^de^r⁾^f^r^om^he^avy^-^duty^tr^uc^ks^{, a}ⁱ^r^c^r^a^f^t^{, boa}^ts^{, a}ⁿ^d
^traⁱ^{ns. E}^P^A^,^Iⁿ^v^eⁿ^t^o^r^y^{of U}^.^{S. G}^r^e^e^nhous^e^G^a^s^Em^is^sⁱ^oⁿ^s^a^nd^Sink^s^:¹⁹^90-²⁰⁰⁴⁽²⁰⁰⁸⁾^.
⁵³^B^a^s^e^{d on}^da^ta^f^r^om^Ene^r^gy^Iⁿ^f^o^r^m^a^{tion A}^d^mⁱ^nis^t^r^a^{tion (}^E^I^A⁾^,^Sta^t^e^C^O²^Em^is^sⁱ^ons^by^Ene^r^gy^Se^c^t^or^s^,^a^t
^http:^//www^.e^ia^.doe^.g^ov^/e^nv^ironm^eⁿ^t.htm^l^.
⁵⁴^C^a^lif^or^nia^Ene^r^g^y^C^o^m^m^is^sⁱ^{on, 200}^6,^Iⁿ^v^eⁿ^t^o^r^y^{of C}^a^lif^orⁿⁱ^{a G}^r^e^e^nho^us^e^G^a^s^Em^is^sⁱ^oⁿ^s^aⁿ^d^Si^nk^s^:¹⁹⁹⁰^to²⁰⁰⁴^,
^{p. 8}^.
⁵⁵^S^{ee Cl}^ean^Aⁱ^{r Act}^S^ectⁱ^oⁿ^{§ 20}⁹^,^co^dⁱ^fⁱ^ed^at⁴²^U.^S^.^C.^§⁷⁵⁴³^.
⁵⁶^C^l^e^aⁿ^Aⁱ^r^A^c^{t § 1}^{77, c}^odifⁱ^e^d^a^t^{42 U}^.^S.C^.^§⁷⁵^07.
⁵⁷^A^B¹⁴⁹³⁽^o^r^t^h^e^C^a^lif^or^nia^Ve^hi^c^l^e^G^l^oba^{l W}^a^r^m^ing^L^a^w⁾^w^a^s^sⁱ^gⁿ^e^d^int^o^la^w^by^G^o^v^e^r^nor^G^r^ay^D^a^vⁱ^s^{on J}^u^ly^22,
²⁰⁰^2.
⁵⁸^T^itle^{13, Ca}^lif^ornⁱ^a^Code^of^Re^gula^tio^{ns §}¹⁹⁶¹^.1.
⁵⁹^T^h^e^{16 s}^t^a^t^e^s^a^r^e^A^r^iz^ona^{, C}^o^lo^r^a^{do, C}^oⁿⁿ^e^c^tic^ut,^Florⁱ^d^a^,^Maⁱⁿ^e^,^Ma^r^y^la^{nd, Ma}^s^s^a^c^hus^e^tts^{, N}^e^w^Je^r^s^ey^{, N}^e^w
^Me^xⁱ^c^o^{, N}^e^w^Y^o^r^k^{, O}^r^eg^on,^P^eⁿⁿ^s^y^l^v^aⁿ^ia^{, R}^hode^I^s^la^nd,^U^t^a^h^,^V^e^r^m^{ont, a}ⁿ^{d W}^a^s^h^ing^t^oⁿ^.

Although they do not require emission reductions or offsets from specific facilities or sources,
other mandatory programs may have an impact on GHG emissions. A few states, California in
particular, have recently developed requirements that aim to influence investment in long-term
power generation. These state actions may impact GHG levels by influencing which energy
sources—coal, oil, natural gas, etc.—are used to generate electricity for consumers.
Two states—California and Washington—have enacted laws requiring a GHG emissions
performance standard for applicable power plants. In September 2006, California passed ⁶⁰⁶¹
legislation (SB 1368) forbidding “load-serving entities” from entering into new “long-term ⁶²
financial commitments” with power plants unless a plant’s GHG emissions are as low or lower
than those of a new, combined-cycle natural gas facility. This emissions performance standard
apply to both in-state power plants and out-of-state facilities that seek to export electricity to
California. As directed by the statute, the California Public Utilities Commission (PUC) issued ⁶³⁶⁴
interim performance standards for investor-owned facilities January 25, 2007. The California ⁶⁵
Energy Commission’s (CEC) comparable regulations for publicly owned utilities were approved
(by the Office of Administrative Law) in October 2007.
Washington passed similar legislation (SB 6001) in May 2007. Regulations implementing this ⁶⁶
statute were adopted in June 2008, and went into effect the following month.
The new performance standards complement the emissions reductions programs being developed
in California and Washington. As discussed above, California is developing a mandatory
reduction program, and Washington has a statewide emissions reduction target; both states are
participants in a regional emissions reduction program (WCI). The implementation of California’s
emissions reduction program and the WCI is several years away (irrespective of legal challenges).
The performance standards act as a stop-gap measure, preventing further utility investment in
carbon-intensive fuels while the states develop broader reduction regimes.
Once the new performance standards are applicable (and previous commitments expire), they will
effectively prohibit California and Washington consumers from using electricity generated by
conventional coal-fired power plants. Compared with a combined-cycle natural gas plant, a

⁶⁰^SB¹³⁶⁸^w^a^s^sⁱ^gⁿ^e^d^by^the^g^o^v^e^r^nor^on^Se^pte^m^be^r^29,²⁰⁰⁶^.
⁶¹^Defⁱⁿ^e^d^{as “ev}^er^y^el^e^c^t^rⁱ^cal^co^rp^o^r^atⁱ^oⁿ^,^el^ect^ri^{c servi}^{ce p}^r^o^vⁱ^d^er,^o^r^co^mm^uⁿⁱ^t^y^ch^oⁱ^{ce aggr}^egat^o^r^serviⁿ^{g en}^d^-^u^s^e
^c^u^stom^e^r^{s in the}^sta^t^e^.^”^{SB 1}³⁶⁸⁽^c^odifⁱ^e^dⁱⁿ^Pu^blic^Utili^tie^{s Co}^de^,^Se^c^tion⁸³⁴⁰⁽^h)).
⁶²^D^e^fⁱ^ne^{d a}^s^a^“ⁿ^ew^ow^ne^r^s^{hip inv}^e^s^t^m^e^{nt in ba}^s^e^loa^d^g^e^ne^r^a^tion^or^a^ne^w^or^r^e^ne^w^e^{d c}^ontr^a^c^t^w^{ith a}^te^r^m^of^fⁱ^v^e^or
^m^o^re^y^e^a^r^s,^w^h^ic^{h inc}^l^u^d^e^s^pr^oc^u^r^e^m^eⁿ^{t of}^ba^se^loa^d^g^e^ne^ra^tion.”^S^B¹³^{68 (c}^odifⁱ^e^dⁱⁿ^Public^Ut^iliti^e^s^Code^{, Se}^c^tioⁿ
⁸³⁴⁰⁽^j)⁾^.
⁶³^In²⁰⁰³^,^th^{ese f}^{acilities acc}^ounte^d^f^o^r⁶⁸^%^of^the^e^l^e^c^t^rⁱ^c^ity^c^ons^um^e^d^{in C}^a^lif^or^nia^.^Se^e^C^a^lif^or^nia^Ene^r^gy
^Com^m^{ission, Ele}^c^t^ric^ity^Consum^ptioⁿ^by^Utilit^y^Ty^pe^{, a}^t^http://w^ww^.e^ne^r^g^y^.^c^a^.^g^o^v^/^e^l^e^c^t^ric^ity^.
⁶⁴^Mor^eⁱⁿ^f^o^r^m^a^{tion is}^a^v^a^ila^ble^a^t^http:^//w^w^w^.c^puc^.c^a^.^g^o^v^/^P^U^C^/^eⁿ^e^r^gy^/^e^le^c^t^rⁱ^c^/^C^lim^a^t^e⁺^C^ha^ng^e^/⁰⁷⁰⁴¹¹^_g^hg^e^ph.^htm^.
⁶⁵^P^u^b^licly^o^wⁿ^e^d^u^{tilities acco}^uⁿ^ted^f^o^{r 2}⁷^%^o^f^Calif^o^rⁿⁱ^a’s^electricity^coⁿ^s^u^m^p^tioⁿⁱⁿ²⁰⁰³^{. Self}^-g^en^eratioⁿ^uⁿ^its
^m^a^de^{up t}^h^e^re^m^a^ining^pe^rc^eⁿ^ta^ge^(a^bout^5%^{). Se}^e^Ca^lif^orni^a^Eⁿ^e^r^gy^Co^m^m^is^sⁱ^{on, Ele}^c^t^ric^ity^Cons^um^ption^by^U^tility
^Ty^pe^.
⁶⁶^Moreⁱⁿ^f^o^rm^a^{tion is a}^v^a^ila^ble^a^t^the^W^a^shing^t^{on De}^pa^rt^m^e^{nt of}^E^c^olog^y^w^e^bsite^{, a}^t^http://w^ww^.e^c^y^.^w^a^.^g^o^v^/^la^w^s^-
^r^u^le^s^/^a^r^c^h^iv^e^/^w^a^c¹⁷³⁴⁰⁷^_2^18.^ht^m^l^.

conventional coal-fired power plant emits more than twice the amount of carbon dioxide. Using ⁶⁷
current technologies, coal-fired generators would fail to meet the new emissions standards.
From 2002 through 2005, approximately 20% of California’s electricity was generated from ⁶⁸
coal; approximately 10% of Washington’s electricity came from coal generation facilities over ⁶⁹
the same period. As the laws take effect, California and Washington will likely need to
reduce/conserve a comparable amount of energy or replace the coal-generated electricity with
alternative sources of power.
The new emissions standards will impact not only California and Washington, but also other
states in the West. For example, California’s electricity imports generally comprise between 22%
and 32% of the state’s total electricity consumption, but its imports are responsible for 39% to ⁷⁰
57% of the total GHG emissions linked with electricity. This is due to the fact that most of
California’s in-state electricity is produced from sources other than coal, while most of the state’s
imported electricity is generated through coal combustion. Once the standard takes effect, the
coal-fired plants in neighboring states, which previously provided electricity to California, will
need to look elsewhere for customers. The same goes for coal-fired power plants still in
development in western states, which may have been designed, at least in part, to serve California ⁷¹
consumers.
Arguably, the GHG performance standards disproportionately affect the neighboring states that
have historically exported coal-generated electricity to California and Washington consumers.
This possible consequence may raise legal issues, such as a state’s general inability to regulate
interstate commerce.
Montana enacted the Electric Utility Industry Generation Reintegration Act (HB 25) in May
2007. Among other things, the act prohibits the state’s Public Service Commission (PSC) from
providing advance approval of coal-fired electric generating units unless a minimum of 50% of
the CO² generated by the facility would be captured and sequestered. The PSC promulgated
regulations to implement this standard in March 2008. At first glance, this statute may appear to
be significant landmark in state climate change activity. However, the statute’s applicability is
relatively narrow, effectively applying to only one public utility—Northwestern Energy—in the

⁶⁷^A^s^te^c^hnolog^y^a^d^v^a^nce^s^{, c}^o^a^l^-^f^ir^e^d^plaⁿ^ts^mⁱ^g^h^{t be}^a^b^le^{to r}^e^duc^e^G^H^G^em^is^sⁱ^ons^thr^o^ug^{h c}^a^r^bo^{n c}^a^ptur^e^aⁿ^d
^se^que^stra^tion^{(CCS). H}^o^w^e^ve^{r, “}^t^he^re^{is re}^la^tiv^e^l^y^little^e^x^pe^rieⁿ^c^e^{in c}^o^m^bⁱⁿⁱⁿ^g^CO²^cap^t^u^re,^t^r^aⁿ^spo^r^t^and^st^o^r^age
^into^a^f^u^lly^inte^g^r^a^t^e^d^{CCS s}^y^ste^m^.^T^h^e^utiliz^a^tio^{n of}^{CCS f}^o^{r la}^rg^e^-^sc^a^l^e^pow^e^r^plaⁿ^{ts (the}^a^ppl^ic^a^tion^of^m^a^jor
^inte^re^{st) still re}^m^a^{ins to be}^im^ple^m^eⁿ^te^d.”^Inte^rg^ov^e^r^nm^eⁿ^ta^{l P}^a^ne^{l on}^Clim^a^t^e^Chaⁿ^g^e^(IP^CC),²⁰⁰⁵^,^{IPCC S}^p^ecia^l
^Re^por^{t C}^a^r^b^oⁿ^Dⁱ^ox^ide^C^a^pt^ur^e^and^St^or^a^g^e^,^S^u^m^m^a^r^y^for^Polⁱ^c^y^m^ak^e^r^s^.
⁶⁸^T^h^{e p}^e^rcen^t^a^{ge o}^f^Calⁱ^f^o^rnⁱ^a^{’s el}^ect^ri^ci^t^y^gen^e^rat^e^d^f^r^o^m^co^al^sh^ou^l^d^d^ecrease,^b^ecau^{se a l}^a^{rge co}^al^-fⁱ^r^ed^p^l^an^t
^(Moha^v^e^f^a^c^ilit^y⁾^w^a^{s shut dow}ⁿ^a^t^the^eⁿ^d^of²⁰⁰⁵^{. Ca}^lif^ornia^Eⁿ^e^r^gy^Co^m^m^{ission, G}^r^{oss S}^y^ste^m^E^l^e^c^t^ricⁱ^t^y
^P^r^od^uc^tio^{n, a}^t^htt^p^://w^ww^.e^ne^r^g^y^.^c^a^.^g^o^v^/^e^l^e^c^t^ricⁱ^t^y^.
⁶⁹^W^a^s^h^ing^t^{on Sta}^t^e^D^e^pa^r^t^m^e^{nt of}^C^o^m^m^unity^,^T^r^a^d^e^a^{nd Ec}^on^om^{ic D}^e^v^e^lopm^eⁿ^{t, 200}^7,²⁰^{07 Bie}ⁿⁿⁱ^al^Eⁿ^e^r^gy
^Re^por^t:^I^s^s^u^e^s^an^{d An}^aly^s^is^f^o^r^th^e^W^a^s^h^ing^t^oⁿ^St^ate^Le^gis^l^at^ur^e^a^{nd G}^o^v^e^r^nor^{, p. 7,}^a^t^htt^p^://w^ww^.^c^te^d.w^a^.g^ov^/.
⁷⁰^C^a^lif^or^nia^Ene^r^g^y^C^o^m^m^is^sⁱ^{on, 200}^6,^Iⁿ^v^eⁿ^t^o^r^y^{of C}^a^lif^orⁿⁱ^{a G}^r^e^e^nho^us^e^G^a^s^Em^is^sⁱ^oⁿ^s^aⁿ^d^Si^nk^s^:¹⁹⁹⁰^to²⁰⁰⁴^,
^Dra^f^{t Sta}^f^f^Re^{port, p}^.¹²^.
⁷¹^Se^e^H^o^lly^{, C}^h^rⁱ^s^,^“^C^a^lif^or^nia^P^U^C^I^s^s^u^e^s^I^O^U^G^r^ee^nhous^e^R^u^le^s^;^Muni^Nⁱ^x^e^s^C^o^a^l^D^e^a^l^,”^T^h^{e E}ⁿ^erg^y^Daⁱ^l^y^,
^Dece^m^b^{er 1}⁵^,²⁰⁰⁶^.

state.⁷² Moreover, this utility does not own generating units in Montana⁷³ and is unlikely to ⁷⁴
construct conventional coal-fired plants in the near future. Other power companies in the state
are not subject to this standard.
To complement California’s statewide GHG reduction program, the governor issued an executive
order (signed January 18, 2007) establishing a low carbon fuel standard (LCFS). The LCFS aims
to reduce the carbon intensity of California’s transportation fuels by 10% by 2020. California ⁷⁵
currently relies on petroleum-based fuels for 96% of its transportation needs. Achieving the
carbon intensity reduction is expected to replace 20% of the state’s gasoline consumption with ⁷⁶
less carbon-intensive fuels. The LCFS would apply to all refiners, blenders, producers, and
importers of transport fuels.
The order states that transportation fuels shall be measured on a full fuel cycle basis. Thus,
regulators must factor in all of the energy used and potential GHGs emitted during the fuel’s
development (extraction or production), delivery (via vehicle or pipeline), and final use
(combustion). Corn-based ethanol, for example, is expected to play a role in meeting California’s
LCFS. To comply with the full fuel cycle assessment, regulators must consider the energy needed
to produce fertilizers, operate farm equipment, transport corn, convert corn to ethanol, and
distribute the final product. For more information on these issues, see CRS Report RL33290, Fuel
Ethanol: Background and Public Policy Issues, by Brent D. Yacobucci.
The LCFS executive order enhances alternative fuel legislation (AB 1007) that California passed ⁷⁷
in 2005. AB 1007 requires the California Energy Commission (CEC), in partnership with other
agencies, including CARB, to develop and adopt a State Alternative Fuels Plan. CEC adopted
such a plan October 31, 2007. The executive order directs CEC to supplement this plan with a
compliance schedule for meeting the 2020 LCFS target. The State Alternative Fuels Plan states ⁷⁸
that CEC will work with CARB “over the next year” to develop a compliance schedule. As of
the date of this report, the compliance schedule remains under development.
Another state action that may affect a state’s sources of electricity generation is the adoption of a
GHG (or carbon) adder. In general, adders require utilities to weigh the future costs of GHG
emissions when considering different energy investment options (e.g., fossil fuels, renewable
energy supplies). For example, California’s Public Utilities Commission requires investor-owned

⁷²^P^e^{r co}ⁿ^v^ersatⁱ^o^{n (Dece}^m^b^{er 1}^,²⁰⁰⁸^{) w}ⁱ^t^h^st^aff^f^r^o^m^M^oⁿ^t^an^a^P^u^b^lⁱ^c^S^e^rvi^{ce Co}^mmⁱ^ssi^oⁿ^.
⁷³^Se^e^N^o^rthw^e^s^te^{rn Ene}^r^g^y^w^e^bs^ite^{, “}^A^{bout U}^s^,”^a^t^htt^p^://w^w^w^.northw^e^s^t^e^r^ne^ne^rgy^.^c^o^m^/^.
⁷⁴^P^e^{r co}ⁿ^v^ersatⁱ^oⁿ^s^(Decem^b^e^{r 1}^,²⁰⁰⁸⁾^wⁱ^t^h^p^e^rsoⁿⁿ^e^l^f^r^o^m^t^h^{e M}^oⁿ^t^an^a^P^u^b^lⁱ^c^S^e^rvi^{ce Co}^mmⁱ^ssi^oⁿ^an^{d t}^h^e
^Montaⁿ^a^Envⁱ^r^o^nm^eⁿ^ta^{l I}ⁿ^f^o^r^m^a^t^{ion C}^e^nte^r^{; a}ⁿ^{d a}^c^onv^e^r^s^a^tio^{n w}^{ith pe}^r^s^o^nne^l^f^r^om^N^o^r^t^hw^es^te^rⁿ^Ene^r^gy⁽^D^e^c^e^m^b^e^r
³^,²⁰⁰⁸⁾^.
⁷⁵^Ex^e^c^u^tiv^e^O^r^de^r^S-^01-⁰⁷^{, s}ⁱ^gⁿ^e^d^J^a^nua^r^y^{18, 2}⁰⁰⁷^.
⁷⁶^C^a^lif^or^nia^O^f^fⁱ^c^e^of^the^G^o^v^e^r^nor^,^The^R^o^le^{of a}^Low^C^a^r^b^on^Fue^l^Staⁿ^d^a^r^dⁱⁿ^Re^ducⁱ^{ng G}^r^e^eⁿ^h^ous^e^G^a^s^Em^is^sⁱ^ons
^and^Pr^ote^c^tⁱ^{ng O}^u^r^Ec^o^nom^y^{, J}^aⁿ^u^a^r^y^{18, 20}⁰⁷^.
⁷⁷^T^h^e^g^o^v^e^r^nor^sⁱ^gⁿ^e^d^A^B¹⁰⁰^{7 S}^e^pte^m^be^r^{29, 2}⁰⁰⁵^.
⁷⁸^CEC,^St^a^t^{e A}^l^t^e^rn^a^tⁱ^{ve F}^u^el^{s P}^l^an^,^(Decem^b^e^r^2007),^p.¹⁸^{, a}^t^htt^p^://w^w^w^.e^ne^rgy^.^c^a^.^g^o^v^/^a^b100^7/.

utilities to include a value of $8/ton of carbon dioxide emissions when conducting long-term ⁷⁹
planning or procurement activities. The agency stated that this requirement “will serve to
internalize the significant and under-recognized cost of [GHG] emissions, [and] help protect ⁸⁰⁸¹
customers from the financial risk of future climate regulation.... ” Only a few other states
require some type of GHG adder, and California’s adder may be rendered less relevant due to its
new emission performance standard (discussed above). At this stage, the adders have not been ⁸²
credited with changing any procurement decisions.

State emissions targets are goals by which a state can measure its progress in achieving GHG
emissions reduction. By themselves, state emissions targets do not directly reduce GHG
emissions. The targets are often established by the executive branch of state government (e.g.,
through an executive order) and may not have the support of the state’s legislative branch.
However, a target signals that state officials, at least from one branch of the government, consider
climate change an important issue.
Twenty states have established statewide targets for GHG emissions (see Table 1).⁸³ Three of the
state targets—California, Hawaii, and New Jersey—are mandatory (discussed above). Compared
to the GHG limits and targets set on the international stage in past years, the state targets are less ⁸⁴
stringent. The New England states’ targets are similar, if not identical, because they are part of a ⁸⁵
cooperative plan developed in 2001. Of the 20 states in Table 1, Colorado, Illinois, New ⁸⁶
Mexico, and Utah stand out because they have substantial coal production.
Table 1 compares the states’ GHG emissions in 1990 with emissions from the most recent years ⁸⁷
of available data. The emissions data show the reductions states would need to make to meet
their established targets. Although some of the states appear within reach of their 2010 targets, the
most recent data from many of these states suggest that emissions are not decreasing, but at best
are leveling off. In some states—e.g., Arizona and Florida—emissions have increased
substantially in recent years. More years of data are needed to evaluate progress, primarily
because many of the states issued their GHG targets after 2003. Moreover, the emissions targets

⁷⁹^Ca^lif^ornia^P^u^blic^Utili^tie^{s Com}^mⁱ^{ssion, De}^cⁱ^sioⁿ^05-^04-⁰²^{4, A}^p^ril^7,²⁰^05.
⁸⁰^Calif^o^rⁿⁱ^a^P^u^b^{lic Utili}^{ties Co}^mmissioⁿ^,^Decisioⁿ⁰⁴^-¹²^-⁰⁴⁸^,^Decem^b^e^{r 1}⁶^,²⁰⁰⁴^.
⁸¹^Oregoⁿ^an^{d Co}^l^o^rad^o^.^S^ee^P^e^w^Cen^t^{er o}ⁿ^G^l^o^b^a^l^Clⁱ^m^at^{e Ch}^an^ge^w^e^b^sⁱ^t^e^,^at^h^t^t^p^:^/^/^www^.^p^e^w^clⁱ^m^a^t^e.^o^r^g/^st^at^es.^c^fm^.
⁸²^P^e^w^Cen^t^{er o}ⁿ^G^l^o^b^a^l^Clⁱ^m^at^{e Ch}^an^ge,^“Calⁱ^f^o^rⁿⁱ^a^P^U^{C Carb}^on^A^d^d^e^{r” (cas}^e-st^u^d^y^).
⁸³^Se^v^e^r^a^{l s}^t^a^t^e^s^ha^v^e^a^l^s^o^de^v^e^lope^{d m}^o^r^e^na^r^r^o^w^ta^r^g^e^t^s^,^e^ithe^r^f^o^r^indus^tr^y^or^e^l^e^c^t^rⁱ^c^ity^g^e^ne^r^a^{tion o}^r^only^f^o^r
^c^a^r^{bon diox}^ide^e^m^is^sⁱ^ons^.
⁸⁴^T^h^e^U^.^{S. K}^y^{oto ta}^r^g^e^t^w^a^s^7%^be^low¹⁹⁹⁰^le^v^e^ls^{, a}^v^e^r^ag^e^d^ov^e^r^the^c^o^m^m^it^m^e^{nt pe}^rⁱ^od²⁰⁰⁸^to²⁰^12.^For^m^o^r^e^on
^inte^rⁿ^a^tⁱ^ona^{l c}^lim^a^t^e^a^g^r^eem^eⁿ^ts^a^{nd U}^.^S^.^inv^o^l^v^e^m^e^{nt, s}^e^e^C^R^S^R^e^por^{t R}^L³³⁸²^6,^C^l^im^ate^C^h^an^ge^:^The^K^y^ot^o
^Pr^otoc^o^l^{, B}^a^li^“Ac^tio^{n Pl}^an^,”^an^{d I}ⁿ^te^rⁿ^ati^oⁿ^a^{l Ac}^ti^ons^,^b^y^S^u^{san R.}^F^l^et^ch^{er and}^L^a^rry^P^a^rker.
⁸⁵^N^e^w^Eng^l^a^{nd G}^o^v^e^r^nor^s^/^Ea^s^t^e^r^{n C}^a^na^diaⁿ^P^r^e^m^ie^r^s^,^C^lim^ate^C^h^a^nge^Ac^ti^on^Plaⁿ²⁰⁰¹^{, A}^u^g^u^s^t²⁰^{01, a}^t
^http:^//www^.ne^g^c^.^org^.
⁸⁶^Iⁿ²⁰^07,^C^o^l^o^r^a^do^{, I}^lli^no^is^{, N}^e^w^Me^xⁱ^c^o^{, a}^{nd U}^t^a^h^r^a^nk^e^d⁶^th^{, 9}^th^{, 11}^th^,^an^{d 12}^th^,^resp^ectⁱ^v^el^y^,ⁱⁿ^co^al^p^r^od^u^c^tⁱ^oⁿ^.^S^ee
^U.^S^.^Dep^a^rtm^eⁿ^t^o^f^En^erg^y^,^En^erg^y^In^f^o^r^m^atioⁿ^A^d^mⁱⁿⁱ^stratioⁿ^S^t^atistics,^at^h^t^t^p^://w^ww^.^eⁱ^a^.^d^o^e^.^gov/.
⁸⁷^T^h^e^em^is^sⁱ^ons^da^ta^{in T}^a^ble¹^,^p^a^r^tic^ula^r^ly^the¹⁹⁹^{0 le}^v^e^{ls, m}^a^y^dⁱ^ff^e^r^f^r^o^m^the^of^fⁱ^cⁱ^a^l^e^s^ti^m^a^te^{s prov}^ide^d^by
ⁱⁿ^dⁱ^vi^du^al^st^at^es.^T^h^{e ob}^j^ectⁱ^v^{e o}^f^t^h^{e t}^a^b^l^eⁱ^s^t^o^c^o^m^p^{are e}^mⁱ^ssi^oⁿ^l^e^vel^s^o^v^{er t}ⁱ^m^e^,^an^d^{assess t}^h^{e ch}^al^l^eⁿ^g^{e o}^f
^meetⁱⁿ^{g e}^mⁱ^ssi^oⁿ^s^t^a^rget^s.^Becau^{se so}^{me st}^at^{es o}ⁿ^l^y^h^a^{ve e}^s^tⁱ^m^a^t^e^{s f}^o^{r 1}⁹⁹⁰^l^e^vel^s^,^t^hⁱ^s^rep^o^r^t^u^s^es^d^a^t^a^f^r^o^m^t^h^e
^W^o^r^l^{d R}^e^s^our^c^e^s^Iⁿ^s^tit^ute^f^o^r^a^c^ons^is^te^nt^c^o^m^p^a^r^is^on.

were typically created in conjunction with GHG reduction policies—some of them mandatory
limits on specific industries or segments of state activities—whose implementation may not be
reflected in the available emissions data.
Table 1. Statewide Greenhouse Gas Targets Compared with Emissions Data from
1990 and Recent Years of Available Data
^{Greenhouse Gas E}^missions
^{(million metric tons of C}^O²^e^quivalent)
^State^{Greenhouse Gases}
^Target(s)¹⁹⁹^{0 200}⁰²⁰⁰^{1 200}²²⁰⁰^{3 200}⁴²⁰⁰⁵
^AZ^a²⁰⁰^{0 levels by}²⁰²^{0; 5}^0%^below^{70 93}^{95 94}⁹⁶¹⁰⁵¹⁰⁷
²⁰⁰^{0 levels by}²⁰⁵⁰
^CA^b²⁰⁰^{0 levels by}²⁰¹^{0; 1}⁹⁹⁰^levels
^{by 2}⁰²^{0; 8}^0%^{below 19}^{90 levels}^{412 442}^{449 447}^{453 458}⁴⁵⁹
^b^y²⁰⁵⁰
^CO^c^20%^{below 20}⁰⁵^{levels by}²⁰²⁰
^{and 80}^{% below 2}⁰⁰⁵^{levels by}^{82 104}^{108 108}^{107 111}¹¹⁵
²⁰⁵⁰
^CT^d¹⁹⁹^{0 levels by}²⁰¹^{0; 1}^0%^below^{44 47}^{45 44}^{46 48}⁴⁷
¹⁹⁹^{0 levels by}²⁰²⁰
^FL^e²⁰⁰^{0 levels by}²⁰¹^{7; 1}⁹⁹⁰^levels
^{by 2}⁰²^{5; 8}^0%^{below 19}^{90 levels}^{208 264}^{263 267}^{271 285}²⁹¹
^b^y²⁰⁵⁰
^HI^f¹⁹⁹^{0 levels by}²⁰²⁰²³²¹²¹²²²³²⁵²⁶
^IL^g¹⁹⁹^{0 levels by}²⁰²^{0; 6}^0%^below^{231 277}^{266 268}^{269 274}²⁸⁵
¹⁹⁹^{0 levels by}²⁰⁵⁰
^MA^h¹⁹⁹^{0 levels by}²⁰¹^{0; 1}^0%^below^{89 88}^{88 89}^{92 89}⁹⁰
¹⁹⁹^{0 levels by}²⁰²⁰
^MEⁱ¹⁹⁹^{0 levels by}²⁰¹^{0; 1}^0%^below^{21 25}^{25 26}^{26 26}²⁶
¹⁹⁹^{0 levels by}²⁰²⁰
^MN^j^15%^{below 20}⁰⁵^{levels by}²⁰^15;
^30%^{below 20}⁰⁵^{levels by}²⁰^25;^{99 118}^{114 117}^{120 119}¹²³
^80%^{below 20}⁰⁵^{levels by}²⁰⁵⁰
^NH^k¹⁹⁹^{0 levels by}²⁰¹^{0; 1}^0%^below^{16 19}^{18 19}^{22 23}²²
¹⁹⁹^{0 levels by}²⁰²⁰
^NJ^l¹⁹⁹^{0 levels by}²⁰²^{0; 8}^0%^below^{124 137}^{135 135}^{137 139}¹⁴⁴
²⁰⁰^{6 levels by}²⁰⁵⁰
^NM^m²⁰⁰^{0 levels by}²⁰¹^{2; 1}^0%^below
²⁰⁰^{0 levels by}²⁰²^{0; 7}^5%^below^{58 66}^{66 64}^{66 68}⁶⁹
²⁰⁰^{0 levels by}²⁰⁵⁰
^NYⁿ^{5% b}^{elow 199}⁰^{by 2}⁰¹^{0; 1}^0%^{233 244}^{236 230}^{244 244}²³⁹
^{below 199}^{0 levels by}²⁰²⁰
^OR^o^{Stabilize by 201}^{0; 1}^0%^below
¹⁹⁹^{0 levels by}²⁰²^{0; 7}^5%^below^{39 52}^{52 50}^{51 53}⁵⁴
¹⁹⁹^{0 levels by}²⁰⁵⁰
^RI^p¹⁹⁹^{0 levels by}²⁰¹^{0; 1}^0%^below^{10 13}^{14 13}^{13 13}¹³
¹⁹⁹^{0 levels by}²⁰²⁰
^UT^q²⁰⁰^{5 levels by}²⁰²^0.⁶⁰⁷²⁷⁰⁶⁸⁶⁹⁷³⁷⁵

^{Greenhouse Gas E}^missions
^{(million metric tons of C}^O²^e^quivalent)
^State^{Greenhouse Gases}
^Target(s)¹⁹⁹^{0 200}⁰²⁰⁰^{1 200}²²⁰⁰^{3 200}⁴²⁰⁰⁵
^VA^r²⁰⁰^{0 levels by}²⁰²⁵¹³⁰¹⁴³¹⁴¹¹³⁹¹⁴³¹⁴⁷¹⁴⁸
^VT^s¹⁹⁹^{0 levels by}²⁰¹^{0; 1}^0%^below^{7 8}^{8 8}^{8 8}⁸
¹⁹⁹^{0 levels by}²⁰²⁰
^WA^t¹⁹⁹^{0 levels by}²⁰²^{0; 2}^5%^below
¹⁹⁹^{0 levels by}²⁰³^{5; 5}^0%^below^{84 99}^{100 93}^{95 99}¹⁰⁰
¹⁹⁹^{0 levels by}²⁰⁵⁰
^Source:^Prepa^{red by t}^{he CRS with data from t}^{he following: state targets compiled by Pew Ce}^{nter o}ⁿ^Global
^{Climate Change, at http://www.p}^{ewclimate.org; GHG emissions data from World Resources In}^{stitute, Climate}
^{Analysis Indicators Tool, at http://cait.wri.}^{org/ (GHG data ex}^{cludes land use c}^hanges).
^a.^{Arizona Exec}^{utive Order}²⁰^06-¹³^(Septembe^{r 7,}²⁰^06).
^b.^{California Executive O}^{rder S-3-0}^{5 (Ju}^{ne 1,}²⁰^{05) set t}^he²⁰^{10 a}ⁿ^d²⁰^{20 ta}^{rgets; AB 3}²^(discussed^b^elow)
^{made the 2}⁰²⁰^target^mandatory.
^c.^Colorad^{o Executive O}^{rder D-0}⁰^{4-08 (A}^{pril 22, 2}⁰⁰^8).
^d.^{Connecticut Pu}^{blic Act No. 04-}²^{52 (J}^une^14,²⁰^04).
^e.^{Florida Executive Order}^07-¹²^{7 (July 1}^{3, 20}^07).
^f.^{Hawaii Governor Lingle signed t}^h^e^{Global Warming Solutions Act of 20}^{07 (Act}²³^{4) into law Jun}^{e 3}^{0, 20}^07.
^{The act mandates}^{statewide GH}^{G emission reductions.}
^g.^Annou^nceme^{nt from Illinois Governor Blagojevich (February}¹^{3, 2}^{007), related to E}^xecutive^Order²⁰^06-1¹
^{(October 5,}²⁰^06).
^h.^Massach^{usetts Climate Protection Plan of 2}⁰⁰⁴^(Spring²⁰^04).
^i.^{Maine LD 8}⁴⁵^{(HP 62}^{2) (effective}^Septembe^{r 1}^{3, 20}^03).
^j.^{Minnesota Gove}^{rnor Pawlenty , s}^{igned into law the Next}^Ge^nerati^{on Ene}^{rgy Act}^{May 2}^{5, 2}⁰⁰^7.
^k.^{The Climate Change Challenge (}^December²⁰^01).
^l.^{New Jers}^{ey Gover}^{nor Corzine si}^{gned into law the Global Warmin}^{g Response Act (A}³³^{01) J}^{uly 6, 2}^007,
^{which re}^quires^{mandatory emissi}^{on reductions.}
^m.^{New Me}^{xico Exec}^{utive Orde}^{r 0}⁵^{-033 (J}^une^{9, 2}⁰⁰^5).
^n.^{New York State En}^{ergy Plan (J}^un^{e 20}^02).
^o.^{Oregon Gover}^{nor Kulongoski signed HB 3}⁵⁴³^{into law Augu}^{st 6,}²⁰⁰^7.
^p.^{Rhode Island Gree}^nhouse^{Gas A}^{ction Plan (July 20}^02).
^q.^Annou^{nced by}^{Utah’s Depart}^men^{t of Environm}^{ental Q}^{uality (DEQ) on Jun}^{e 2}^{0, 20}^08.
^r.^{Virginia Governor Kaine signed E}^{xecutive O}^rder^{59 (2}⁰⁰^{7) Dece}^mber^{21, 2}⁰⁰^7.
^s.^{This target is discussed in Vermo}^{nt’s state plan,}^{Fueling Vermont’s F}^{uture: Vermont Comprehensive Energy Plan}
^{and Vermont Greenhouse Gas Action Plan}^{(July 19}^98).
^t.^{Washington Gover}^{nor G}^regoire^{signed SB 600}^{1 into law May}^{3, 2}^007.

Reliable GHG emissions data are a keystone component of any climate change program. To
implement effective solutions to climate change, policymakers need up-to-date and accurate

information detailing the volume and sources of GHG emissions in their states. Precise
monitoring is particularly vital for market-oriented approaches to GHG control. Whether a
market-oriented program is based on tradeable emissions credits or a carbon tax, reliable and
transparent emissions data would be the foundation for developing the allocation systems,
reduction targets, and enforcement provisions.
The federal government has several programs in place that either track or estimate GHG
emissions:
• Power plants subject to the 1990 Clean Air Act acid rain program must monitor ⁸⁸
and report to EPA various air pollutants, including carbon dioxide.
• The Department of Energy administers a voluntary GHG reduction registry. This
program started in 1994, pursuant to Section 1605(b) of the Energy Policy Act of ⁸⁹

1992 (P.L. 102-486).

• The EPA prepares an annual inventory of the nation’s GHG emissions and sinks,
which is submitted to the United Nations in accordance with the Framework
Convention on Climate Change.
Many states have developed, or begun to develop, their own GHG tracking programs. Although
tracking programs may overlap in purpose and terminology, for this report, tracking programs are
divided into three categories: mandatory reporting, registries, inventories.
Mandatory reporting programs allow states to monitor GHG emissions from precise sources.
Although the primary purpose of mandatory reporting is typically to support an emission
reduction program, a reporting program can potentially provide benefits without an
accompanying reduction requirement. For example, if companies’ GHG emissions were made
publicly-available and thus comparable, the companies might have an incentive to reduce ⁹⁰
emissions voluntarily. However, there is some concern that emissions may increase under a
mandatory reporting program, especially if companies suspect that the state will establish a
mandatory reduction regime in later years. For instance, facilities may attempt to “game” the

⁸⁸^Se^c^tion⁸^21,¹⁹⁹⁰^C^l^e^aⁿ^Aⁱ^r^A^c^t^A^m^e^ndm^eⁿ^ts⁽^P^.L^{. 1}^01-⁵⁴^9,^{42 U}^S^C⁷⁶^51k⁾^.^For^m^o^r^e^inf^o^r^m^a^tion^r^e^g^a^r^d^ing
^f^e^de^r^a^{l pr}^og^r^a^m^s^s^e^e^C^R^S^R^e^por^t^R^L³¹⁹³^1,^C^lim^ate^C^h^a^nge^:^Fe^de^r^a^{l Law}^s^a^{nd P}^o^lic^ie^s^Re^la^te^{d t}^o^G^r^e^e^nhous^e^G^a^s
^Re^duc^tio^ns^,^by^B^r^eⁿ^{t D}^.^Y^a^c^obuc^cⁱ^a^{nd L}^a^r^r^y^P^a^r^k^e^r^.
⁸⁹^{For m}^o^re^inf^o^rm^a^{tion o}ⁿ^th^{is pr}^o^g^r^a^m^{, se}^e^http://www^.e^ia^.doe^.g^ov^/oia^f^/¹⁶⁰^5/^f^r^ntv^r^gg^.htm^l.
⁹⁰^T^h^is^noti^oⁿ^is^aⁿ^a^l^og^ous^t^o^t^h^e^a^r^g^u^m^e^nts^{in s}^u^pp^or^t^of^EP^A^’^s^T^o^xⁱ^c^R^e^le^a^s^e^Iⁿ^v^e^ntor^y⁽^T^R^I⁾^P^r^og^r^a^m^,^w^h^ic^h
^re^quire^{s f}^a^c^ilitie^{s to subm}^{it a}ⁿⁿ^u^a^l^da^ta^c^onc^e^rⁿⁱ^ng^theⁱ^r^re^le^a^s^e^s^{of c}^h^e^m^ic^a^l^{s to the}^eⁿ^vⁱ^r^onm^eⁿ^{t. T}^h^e^T^R^{I prog}^ra^m^is
^g^e^ne^r^a^ll^y^c^ons^ide^r^e^d^a^s^u^c^c^e^s^s^,^a^s^r^e^le^a^s^e^s^ha^v^e^de^c^r^e^a^s^e^d^sⁱ^nc^e^the^pr^og^r^a^m^’^s^inc^e^p^tion.^R^a^be^{, B}^a^r^r^y^,^2002,
^G^r^e^e^nhous^e^&^State^h^ous^e^:^T^h^e^E^v^olvⁱ^ng^St^ate^G^o^v^e^r^nm^eⁿ^{t R}^o^leⁱⁿ^C^lim^ate^C^h^an^ge^,^P^r^e^p^ared^f^o^{r t}^h^{e P}^e^w^Cen^t^{er o}ⁿ
^G^l^o^b^a^l^Clⁱ^m^at^{e Ch}^an^ge.

system by deliberately increasing emissions (or over-reporting them) in order to gain additional ⁹¹
allowances once a reduction program is established.
A few states already require, and others are in the process of developing, GHG emissions
reporting to complement an emissions reduction program. Some states require reporting of GHG
emissions that are not included in reduction programs. For example, someof the RGGI states
mandate reporting of non-CO2 GHG emissions. In addition, other states currently have a
mandatory reporting program that is not linked with an emissions reduction requirement. Both of
these types of reporting activities are listed below, in the order of when the program started or is
scheduled to start:
• Wisconsin: In 1993, the state established a mandatory reporting program that
includes carbon dioxide reporting for facilities generating over 100,000 tons ⁹²
annually.
• New Jersey: Certain facilities in New Jersey that report air pollutant emissions
must also submit emission data for carbon dioxide and methane. This ⁹³
requirement went into effect in 2003. New Jersey is developing a mandatory
reduction program (discussed above) that will entail a more comprehensive
reporting regime.
• Maine: Facilities in Maine that emit any criteria pollutant over a specific
reporting threshold must also report GHG emissions. This provision went into ⁹⁴
effect July 2004.
• Connecticut: Starting in 2006, facilities subject to federal reporting under Title V ⁹⁵
of the Clean Air Act must submit GHG emissions data on an annual basis.
• California: See the above discussion regarding the implementation of AB 32,
which includes mandatory GHG emission reporting.
• North Carolina: Facilities with Title V permits (under the Clean Air Act)⁹⁶that
submit annual air pollutant emission inventories to the state will be required to ⁹⁷
include GHG emissions in their 2009 submission (due June 30, 2009).
• New Mexico: Beginning in 2009, all electrical generating units of 25 megawatts
capacity or higher, petroleum refineries, and cement manufacturing plants will be

⁹¹^T^h^is^noti^oⁿ^a^s^s^u^m^e^s^tha^t^a^llow^aⁿ^c^e^s^w^ould^be^a^lloc^a^t^e^d^ba^s^e^{d u}^p^oⁿ^pa^s^t^pe^r^f^or^m^a^nc^e^,^ins^t^e^a^d^of^s^o^l^d^thr^oug^h^aⁿ
^a^u^c^{tion pr}^oc^e^s^s^.
⁹²^Wⁱ^s^c^ons^{in C}^h^a^p^te^r^N^R⁴^38.⁰³^.
⁹³^N^e^w^Je^r^s^ey^A^d^mⁱ^nis^t^r^a^tiv^e^C^ode^7:2⁷^-²^1.^3.
⁹⁴^Ma^ine^D^e^pa^r^t^m^e^{nt of}^Envⁱ^r^onm^eⁿ^ta^l^P^r^ote^c^tion^R^u^le^s^,^C^h^a^p^te^r¹³^{7 (}^p^e^r³⁸^MR^SA^{, Se}^c^tion⁵⁷⁵⁾^.
⁹⁵^C^oⁿⁿ^e^c^tic^ut^Pub^lic^A^c^{t N}^o^{. 04-}²^{52 (}^J^une^14,²⁰⁰⁴⁾^.
⁹⁶^So^urc^e^s^subje^c^t^to^the^T^itle^V^pe^rm^{it re}^quire^m^e^{nts g}^e^ne^ra^ll^y^inc^l^ud^e^m^a^{jor sourc}^e^s^tha^t^e^m^{it or}^ha^v^e^the^p^o^te^ntia^l^to
^em^{it 100}^to^ns^pe^r^y^e^a^r^of^aⁿ^y^r^e^gula^t^e^d^p^o^ll^utaⁿ^t^,^pl^us^s^t^a^tⁱ^ona^r^y^{and a}^r^e^a^s^our^c^e^s^t^h^a^t^e^m^{it or}^ha^v^e^poteⁿ^tia^{l to}^e^m^it
^le^s^s^e^r^s^p^e^cⁱ^fⁱ^e^d^am^ounts^of^h^azar^dous^aⁱ^r^p^o^ll^utaⁿ^ts^.^Se^e^C^R^S^R^e^p^o^r^t^R^L³⁰⁸⁵^3,^Cle^a^{n Air}^Ac^{t: A}^Su^mmary^{of the}^Ac^t
^aⁿ^d^{Its Ma}^j^o^{r Requ}^iremen^ts^{, by}^J^a^m^e^s^{E. Mc}^Ca^rthy^e^t^a^l^.
⁹⁷^Moreⁱⁿ^f^o^rm^a^{tion re}^g^a^rding^this^prog^ra^m^{is a}^v^a^ila^ble^a^t^http^://da^q^.^s^ta^te^.n^c^.^us/^m^onitor/e^m^inv^/^f^o^r^m^s/
^G^H^G^_^Iⁿ^s^t^r^u^c^tions^.^pdf^.

required to report GHG emissions. The initial report will only include CO² ⁹⁸
emissions; reporting of other GHGs will be required in later years.
• Oregon: In October 2008, the Oregon Environmental Quality Commission
established a GHG emission reporting requirement for entities that emit more
than 2,500 metric tons of CO² annually. Title V sources will report 2009 ⁹⁹
emissions in 2010; all other sources will report 2010 emissions in 2011.
• Washington: In March 2008, the state enacted H.B. 2815, directing the
Department of Ecology (DEC) to develop a GHG emission reporting system.
Starting in 2010, the statute requires emission reporting from entities that emit
more than 10,000 t CO² annually and vehicle fleets emitting more than 2,500
tCO²e annually.
In general, state GHG registries are voluntary programs that allow facilities to submit and
officially record emissions data. The states’ voluntary registry programs encourage participation
through incentives. Perhaps the primary incentive is the opportunity for participants to create an
official record of emissions reductions, which the parties hope will count as emissions credits in
future mandatory reduction programs. At a minimum, participants typically receive some public
recognition for their efforts, which may help promote a company’s environmental stewardship
profile. Five states have passed legislation to establish GHG registries, of which three are now ¹⁰⁰
under way:
• New Hampshire: The New Hampshire GHG Registry went into effect in 2001.
The registry is intended to record emissions reductions in a state database that
can be used in addressing possible future requirements.
• California: The California Climate Action Registry began operations in 2002.
This state registry is arguably the most comprehensive, as participants register all
of their GHG emissions for operations in California; other state (and federal)
registries cover only emission reductions. The registry has over 100 participants.
• Wisconsin: The Wisconsin Voluntary Emission Reduction Registry, a registry of
voluntary reductions of GHG emissions, went online in 2003.
Numerous states are joining forces to establish a national registry, which may link with regional ¹⁰¹
registries that were previously created. In May 2007, 30 states formed the Climate Registry,
which aims to establish a standard system for GHG emissions reporting. As of August 2008, 39

⁹⁸^Rule^m^a^kⁱ^ng^(T^itle^{20, Cha}^p^te^{r 2}^,^P^a^{rts 73}^aⁿ^d⁸⁷^{) f}^r^om^the^Ne^w^Me^xⁱ^c^o^Envⁱ^ronm^eⁿ^{t De}^pa^rtm^e^{nt, a}^t
^http:^//w^w^w^.nm^e^nv^.s^ta^te^.nm^.^us^/^a^q^b^/^g^hg^/^g^hg^r^r^_^inde^x^.^h^t^m^l^.
⁹⁹^T^h^e^Ore^g^{on rule}^m^a^kⁱ^ng^{is a}^v^a^ila^ble^a^t^ht^tp:/^/www^.de^q^.s^ta^te^.or^.^us^/^a^q/c^lim^a^t^e^/^doc^s^/^Fina^lG^H^G^R^u^le^.pdf^.
¹⁰⁰^T^h^{e o}^t^h^e^{r t}^w^o^st^at^{es are M}^aⁱⁿ^{e an}^d^G^e^o^r^gi^a.^M^aⁱⁿ^{e’s regi}^st^ryⁱ^sⁿ^o^t^y^e^t^o^p^e^ratⁱ^oⁿ^a^l^,^bu^t^t^h^{e st}^at^{e d}^o^{es h}^a^{ve a}
^m^a^nda^tor^y^r^e^por^ting^r^e^q^u^ir^e^m^eⁿ^{t (}^d^is^c^u^s^s^e^{d be}^l^o^w⁾^{. G}^e^or^gⁱ^a^,^inste^a^d^of^tra^c^k^ing^GH^G^e^m^{issions, e}^s^ta^blishe^{d a}^re^gⁱ^stry
^f^o^{r c}^ountiⁿ^g^the^of^f^s^e^tting^re^duc^ti^onsⁱⁿ^G^H^G^em^is^sⁱ^ons^obtaⁱ^ne^d^b^y^c^a^r^{bon s}^e^que^s^t^ra^ti^on.^N^o^{t c}^o^uⁿ^t^e^{d a}^s^one^of^the
^fⁱ^v^e^st^at^es,^Ne^w^Jer^s^e^y^rep^eal^ed^{a p}^r^evi^o^u^s^l^y^en^act^ed^regi^st^r^y^p^r^o^g^ra^mⁱⁿ²⁰⁰⁴^.
¹⁰¹^New^Eⁿ^gl^an^d^an^d^Mi^d^-^A^t^l^aⁿ^tⁱ^c^s^t^at^{es are d}^e^vel^o^pⁱⁿ^g^t^h^{e E}^a^st^ern^C^lⁱ^m^at^{e R}^e^gi^st^r^y^.^In^ad^dⁱ^tⁱ^oⁿ^,^t^h^{e L}^a^{ke M}ⁱ^chⁱ^g^an
^Aⁱ^{r Directo}^r^{s Co}ⁿ^s^o^r^ti^u^m^(LADC^{O) is w}^o^rkⁱⁿ^g^oⁿ^{a reg}ⁱ^stry^f^o^{r se}^v^e^{ral states in}^th^{e Mid}^w^est.

states have joined the registry to support both voluntary and mandatory reporting schemes in the ¹⁰²
participating states.
At least 42 states have developed GHG inventories. Inventories typically provide estimates of
emissions for various categories: economic sector (e.g., energy, agriculture), emissions source
(e.g., automobiles, power plants), GHGs (e.g., carbon dioxide, methane). In general, states create
their inventories by following guidelines developed by the Environmental Protection Agency
(EPA) that are based on internationally recognized standards. Inventories are often used to obtain
an overall assessment of a state’s emissions levels and sources, and are perhaps best suited for
monitoring trends and/or developing comprehensive strategies. Although some states have
performed inventory updates, most of the states’ inventories only cover 1990 emission levels.

At least 38 states have either completed or are in the process of preparing climate change action
plans (see Figure 3). Typically, state action plans are drafted by a climate change task force,
composed of members with diverse backgrounds and expertise. In general, task force members
examine their state’s sources of GHG emissions, and identify and rank the policy options that are
most appropriate (i.e., cost-effective, politically feasible, etc.) for controlling emissions in their
state. Often the state action plan is made available for public comment, revised if necessary, and
then submitted for approval to state officials.

¹⁰²^{For m}^o^re^inf^o^rm^a^{tion se}^e^http^://^www^.the^c^lⁱ^m^a^t^e^r^e^g^istr^y^.^org^.

Figure 3. States with Completed (Orange) and
Under-Development (Blue Lines) Climate Change Action Plans
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^{0000000000000000000000000000000000}^{0000000000000000000000000000000000}^{000000000000000000000}^{0000000000000000000000000000000}^{0000000000000000000000000000000}
^{0000000000000000000000000000000000}^{0000000000000000000000000000000000}^{000000000000000000000}^{000000000000000000000}^{0000000000000000000000000000000}
^{0000000000000000000000000000000000}^{000000000000000000000}^{000000000000000000000}
^{00000000000000000000000000000000000000000}^{00000000000000000000000000000000000000000}^{00000000000000000000000000000000000000000000}^{00000000000000000000000000000000000000000000}^{00000000000000000000000000000000000000000000}
^{00000000000000000000000000000000000000000}^{00000000000000000000000000000000000000000}^{00000000000000000000000000000000000000000000}^{00000000000000000000000000000000000000000000}
^{000000000000000000000000000}^{000000000000000000000000000}
^{000000000000000000000000000}^{000000000000000000000000000}
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^{000000000000000000000000000000000000000}^{000000000000000000000000000000000000000}
^{000000000000000000000000000000000000000}^{000000000000000000000000000000000000000}
^{000000000000000000000000000000000000000}^{000000000000000000000000000000000000000}
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^Sour^ce:^Prepa^{red by t}^{he Congr}^{essional Research Service with da}^{ta from U.S. EPA Climate Change Divisi}^{on and}
^{Pew Center on}^{Global Climate.}^{Online links to individual state action plans are available th}^rough^E^{PA’s website,}
^{at http://www.epa.gov/climatechange.}
Reflecting the fact that states have different economic sectors, natural resources, and political
structures, state climate change action plans can vary substantially. Some state action plans focus
more on indirect, “no regrets” strategies, such as improved energy efficiency, which will likely
yield benefits irrespective of climate change effects. Other state action plans are more
comprehensive and recommend a portfolio of direct efforts that address GHG emissions.
Although the state climate change action plans may recommend an array of policy options, the
plans do not necessarily result in direct actions to reduce GHG emissions. However, the number
of completed state plans indicates the interest that a majority of states have in addressing climate
change mitigation on some level.

The climate change activity in the states raises several issues that may be of interest to Congress.
This section discusses some of the potential effects of state action in lieu of federal legislation.
This section also examines the limitations of state actions, both from a climate change policy
perspective and in the context of legal challenges.

Many states generate significant emissions of GHGs. If individual U.S. states were classified as
sovereign nations, 18 U.S. states would rank in the top 50 for nations that annually emit the ¹⁰³
primary GHG: carbon dioxide. Compared with other nations, Texas, the combined Midwest
Accord states, the WCI states, the RGGI states, and California rank as top carbon dioxide emitters
(Table 2).
Table 2. Top-Ranked Carbon Dioxide Emissions by Nation,
U.S. States, and U.S. Regional Partnerships (2005 data)
^CO²^Emissions^CO²^Emissions
^{Country, State, or Group}^{(million metric tons)}^{Country, State, or Group}^{(million metric tons)}
^{United States}^5,89²^Texas⁶⁷³
^{China 5,57}⁷^RGGI^states⁶⁴³
^Europea^{n U}^nion^4,10²^Canada⁵⁵⁹
^{Russian Federation}^1,55⁸^{United Kingdom}⁵³⁹
^{Japan 1,24}⁹^Italy⁴⁷⁷
^{India 1,22}²^South^Korea⁴⁷⁵
^Germa^{ny 829}^Iran⁴⁴⁷
^{Midwest Accord states}⁸¹³^Mexico⁴¹¹
^{WCI states}⁷⁸⁸^California³⁹⁶
^Source:^Prepa^{red by CRS with d}^{ata from World Resources In}^{stitute, Climate Analysis Indicators Too}^{l, at}
^{http://cait.wri.org/}^{. Note that the}^{carbon dioxide data excludes lan}^{d use cha}^nges.
^Note:^{Midwest Accord states include Illinois}^{, Iowa, Kansas, Michigan, Minnesota, and Wisconsin.}^{WCI states}
^{include Arizona, Calif}^{ornia, New Mexico, Montana, Orego}^{n, Utah, and Washington. RGG}^{I states in}^c^lude
^{Connecticut, Delaware, Maine, M}^{aryland, Massach}^{usetts, New}^Ha^{mpshire, Ne}^{w Jers}^{ey, New York, Rhode Island}
^{and Vermont. In addition, the em}^{issions data for China entails som}^{e unce}^{rtainty. More}^recent^estim^{ates (from}
^{other source}^{s) indicate that Chin}^{a has s}^urpa^{ssed the U}^{nited States in GH}^{G emissions. For more inf}^{ormation, see}
^{CRS Report RL346}^59,^{China’s Greenho}^{use Gas Emis}^sions^{and Mitigation Policie}^s^{, by Ja}^{ne A. Leggett, Jef}^f^{rey Logan,}
^{and Anna}^Mackey.
Almost half (23) of the states have joined one of the three regional emission (all GHGs or just
carbon dioxide) reduction programs: the Midwest Accord, WCI, and RGGI. The states in these
regional programs account for a substantive percentage of U.S. carbon dioxide emissions (about
38%). However, the remaining 27 states are pursuing considerably less aggressive climate change
policies. With this range of state activity, it is difficult to predict the precise consequences of
state-led climate change actions. This section highlights possible effects from state actions.
A central argument in support of state climate change action is that states can serve as laboratories
for policymaking. States can test different ideas and policies on a smaller scale, and help

¹⁰³^T^h^{is is ba}^se^{d o}ⁿ²⁰⁰⁵^da^ta^f^r^om^t^h^e^W^o^{rld Re}^so^ur^c^e^s^Institu^te^{, Cli}^m^a^t^e^Aⁿ^a^l^y^s^{is Indic}^a^t^{ors T}^{ool, a}^t
^http:^//c^a^it.w^r^i.org^/^.

determine which climate change solutions are most effective. For example, there has been some
debate regarding how a cap-and-trade program might work on a national level. Although the
federal acid rain program, which involves sulfur dioxide emissions trading, is generally
considered a success, emissions trading programs for other purposes have encountered problems ¹⁰⁴
during implementation.State and regional programs offer the opportunity to iron out logistical
details that are crucial in a cap-and-trade system:
• How high to set the emissions cap.
• Which sources to regulate.
• How to allocate emissions allowances.
• Whether to allow the use of offsets as compliance alternatives.
• Whether to include a safety valve and, if so, how high to set it.
State programs can inform federal policymakers in other ways. The political process by which
states create climate change policy can be enlightening and perhaps adaptable on the federal
level. For instance, by examining the development and passage of state legislation, federal
policymakers may better understand the motivations of different stakeholders and learn how best
to frame the issues.
Emission reduction programs will likely have economic effects on consumers, businesses and ¹⁰⁵
manufacturers, and possibly interstate commerce.The most immediate effects of the emissions
programs (at least the ones furthest along in development) will be on the automotive
manufacturing and electricity generation sectors.
For automotive manufacturers, the California motor vehicle regulations—which at least 16 states
have indicated they plan to implement if EPA approves the waiver (discussed above)—will likely
have the effect of dividing the market, potentially requiring the manufacture of a different class of
cars to meet the new standards (scheduled to apply in 2009). For automotive companies, this
raises the issues of the technical means of meeting the standard, marketing, ensuring compliance,
and pricing. Depending on how the emission limits are to be met, they may also influence fueling
infrastructure. State governments will need resources to enforce the standards. Consumers in
regulated states may face higher prices for vehicles.
Regarding the electric power industry, the mandatory reduction requirements will likely promote
generation from low carbon-intensive fuels, while curtailing generation from high carbon-
intensive fuels, such as coal. The GHG performance standards in California and Washington will
reach into neighboring states as well, effectively barring electricity imports generated by

¹⁰⁴^F^o^{r exam}^p^l^e,^t^h^{e S}^o^u^t^h^e^rⁿ^Calⁱ^f^o^rⁿⁱ^{a’s Regi}^oⁿ^a^l^Cl^ean^Aⁱ^{r In}^cen^tⁱ^{ves M}^a^rket^(RE^C^L^A^IM^),^w^hⁱ^c^h^w^a^s
^im^plem^eⁿ^te^{d in 1}⁹⁹⁴^to^r^e^duc^e^e^m^issⁱ^ons^of^nitr^og^eⁿ^ox^ide^s⁽^N^O^x⁾^a^{nd s}^u^lf^ur^di^ox^ide⁽^S^O²⁾^,^s^a^w^a^50-^f^o^ld^inc^r^e^a^s^eⁱⁿ
^N^O^x^a^llow^a^nc^e^pr^ic^e^s^dur^ing^t^h^e²⁰⁰^0-²⁰^{01 C}^a^lif^or^nia^eⁿ^e^r^gy^c^r^isⁱ^s^{. T}^h^e^Eur^o^pe^aⁿ^Uⁿⁱ^on’^s^G^H^G^tr^a^d^ing^s^y^s^t^em^ha^s
^a^l^s^o^e^x^pe^rⁱ^eⁿ^c^e^d^dr^a^s^tic^s^w^ing^s^{in a}^llow^a^nc^e^pr^ic^e^s^durⁱⁿ^g^its^s^t^a^r^t^-^{up y}^e^a^r^s^,^m^a^kⁱ^ng^plaⁿⁿⁱ^ng^a^nd^d^e^cⁱ^sⁱ^on-^m^a^kⁱ^ng
^dif^fⁱ^c^u^{lt f}^o^{r pa}^rtic^ipa^ting^eⁿ^titie^s.^{For a}^d^diti^ona^l^inf^o^rm^a^{tion on}^the^{EU tra}^d^ing^sy^ste^m^{, se}^e^{CRS Re}^{port RL}³³⁵⁸^1,
^C^lim^ate^C^h^an^ge^:^The^Eur^o^pe^aⁿ^Uⁿ^ion^’^s^Em^is^sⁱ^oⁿ^s^Tr^a^dⁱⁿ^g^Sy^s^t^e^m⁽^E^U^-^ETS)^{, by}^L^a^rr^y^P^a^rk^e^r^.
¹⁰⁵^T^h^{e q}^u^e^stⁱ^oⁿ^o^f^w^h^et^h^e^{r an}^dⁱⁿ^w^h^at^ci^rcu^m^st^an^{ces st}^at^{es can}^reg^u^l^at^{e i}ⁿ^t^e^rst^a^t^e^co^mm^erce^ma^y^rai^s^{e l}^e^gal
^que^s^tio^ns^{, w}^h^ic^{h a}^r^e^br^ie^f^l^y^dis^c^us^s^e^{d be}^low^.

conventional coal-fired power plants. Because coal-fired plants tend to produce lower-cost
electricity, the result of these requirements may be to increase electricity prices within the states
that limit emissions, and possibly lower prices in states without such emission standards.
If the GHG limitations lead to energy price increases in the regulated states, businesses and
manufacturers may factor this cost into location decisions. There is some concern that regulated
industries will have a financial incentive to move (and thus transfer jobs) to states (or nations) ¹⁰⁶
that do not limit GHG emissions. Others fear that emission limits will raise the cost of living
and doing business within those states, although in theory such effects can be at least partially ¹⁰⁷
addressed through the design of the emissions reduction program.
One concern shared by many observers, particularly industry stakeholders, is that state climate
change programs (in lieu of a federal program) will create a patchwork of regulations across the
nation. A patchwork system of standards may hinder a company’s efficiency and possibly create
economic burdens for firms that operate in multiple states. The prospect of regulations that vary
from state to state is driving some companies to support a federal climate change program with
comparable requirements across the entire United States.
Climate change has been described as the “ultimate global commons problem.”¹⁰⁸ The global
warming and climate impacts associated with increased GHG emissions in the atmosphere cannot
be linked with specific emission sources. Unlike localized reductions in other air pollutants (e.g.,
sulfur dioxide, particulate matter), when an emissions source reduces its carbon dioxide
emissions, it does not generate a corresponding local climate change benefit unless there are
similar widespread reductions globally or at least in wide areas.
From a practical standpoint, the actions of one or a group of states or nations cannot by
themselves reduce the global accumulation of GHG emissions in the atmosphere. However, as
discussed above, actions now under way by many states in the United States may create examples
and/or models that will prove instructive in more widespread applications. Moreover, when
business and industry have confronted a growing patchwork of state requirements, these sectors
have historically begun to favor a national policy—as has begun to happen in the case of state-
level actions on climate change. However, the lack of a national program or a truly global
approach to GHG emissions reductions does limit what individual states can accomplish in
actually reducing GHG emissions and accumulations.
Legal challenges may further limit the effectiveness of state action. The possibility of legal
challenges creates considerable uncertainty regarding the future of state climate change actions,

¹⁰⁶^T^h^is^is^a^l^s^o^a^c^eⁿ^tr^a^l^a^r^g^u^m^e^{nt a}^g^aⁱ^ns^{t ha}^vⁱ^ng^f^e^de^r^a^{l em}^issⁱ^{on li}^m^its^w^{ithout c}^o^ope^r^a^ti^{on w}^ith^oth^e^r^la^r^g^e
^e^c^onom^ie^s⁽^e^.g^{., C}^h^ina^aⁿ^{d I}ⁿ^dia⁾^.
¹⁰⁷^A^c^a^p^-^a^nd-^tr^a^d^e^pr^og^r^a^m^w^{ith a}ⁿ^a^u^c^tion^s^y^s^t^em⁽^a^s^dis^c^us^s^e^{d a}^b^o^v^e⁾^,^f^o^r^ins^t^aⁿ^c^e^,^w^{ould g}^e^ne^r^a^te^r^e^v^e^nue^s^tha^t
^co^u^l^{d b}^e^f^uⁿⁿ^el^ed^t^o^p^a^rtⁱ^e^{s w}^h^o^b^{ear an}^un^f^aⁱ^r^p^e^rcen^t^a^{ge o}^f^t^h^{e p}^r^o^g^ra^m^’^{s co}^st^s.^S^ee,^f^o^{r exa}^m^p^l^e,^Natⁱ^oⁿ^a^l
^C^o^m^m^is^sⁱ^{on on E}ⁿ^e^r^g^y^P^o^lic^y^,²⁰⁰⁷^{, A}^lloc^a^ting^A^llow^a^nc^e^s^{in a}^G^r^ee^nhous^e^G^a^s^T^r^a^d^ing^S^y^s^t^em^.
¹⁰⁸^Sta^v^{ins, Ro}^be^rt,²⁰^06,^“^A^Utility^Sa^f^e^t^y^V^a^lv^e^f^o^{r Cu}^tting^CO2^,^”^T^h^e^Envⁱ^ronm^eⁿ^ta^{l Forum}^,^Vol^u^m^e^{23, Num}^b^e^r
^{2, Ma}^r^c^h/A^p^r^il,²⁰⁰⁶^,^p.^14.

particularly the more aggressive programs. There are already several lawsuits against state actions ¹⁰⁹
that seek to regulate GHG emissions from motor vehicles. As discussed above, the April 2007
Supreme Court decision (Massachusetts v. EPA) did not specifically address all of the plaintiffs’
arguments, so uncertainty remains as to the resolution of these cases.
Further litigation confronting other types of state action is anticipated. However, many expected
RGGI to face a legal challenge when the first state’s rule was officially issued, but that did not
occur. Regardless, there is some question as to whether California’s recently enacted GHG ¹¹⁰
performance standards are constitutional. Arguably, the standards disproportionately impact the
neighboring states that have historically exported coal-generated electricity to California
consumers. The legal arguments in these cases are beyond the scope of this report, but many
observers conclude that it is difficult to predict how the courts will interpret and decide upon
these issues. For a more in-depth analysis of various legal issues regarding climate change, see
CRS Report RL32764, Climate Change Litigation: A Growing Phenomenon, by Robert Meltz.
^Jon^a^t^h^aⁿ^L^.^R^a^m^s^e^u^r
^An^al^y^s^{t i}ⁿ^En^vⁱ^r^oⁿ^m^eⁿ^{tal P}^o^lic^y
^j^r^am^s^e^u^r^@^c^rs^.l^oc.^g^ov^{, 7-}⁷⁹¹⁹

¹⁰⁹^For^m^o^r^e^de^ta^ils^{, s}^e^e^C^R^S^R^e^p^o^r^t^R^L³⁴⁰^99,^C^a^lif^orⁿⁱ^a’^s^W^a^iv^e^r^Re^que^s^t^to^C^o^ntr^o^l^G^r^e^e^nho^us^e^G^a^s^e^s^U^nde^r^the
^Cle^{an Air}^Ac^t^,^by^J^a^m^e^s^{E. Mc}^C^a^r^t^hy^a^{nd R}^obe^r^t^Me^ltz^.
¹¹⁰^Se^e^Potts^,^B^r^ia^n,²⁰⁰⁶^{, “}^R^e^g^ula^tⁱⁿ^g^G^r^e^e^nhous^e^G^a^s^L^e^a^k^ag^e^:^H^o^w^C^a^li^f^o^rⁿ^ia^C^a^{n Ev}^a^d^e^the^I^m^pe^ndi^ng
^C^ons^tit^uti^ona^{l A}^tta^c^k^s^,^”^E^l^ect^ri^ci^t^y^Jo^u^rⁿ^a^l^,^Vo^l.^19,^I^s^s^u^e^5,^J^u^ne²⁰⁰^6.