Western Climate Initiative, Inc. (WCI) is a 501(c)(3) non-profit corporation which administers the shared emissions trading market between the American state of California and the Canadian province of Quebec as well as separately administering the individual emissions trading systems in the Canadian province of Nova Scotia and American state of Washington. It also provides administrative, technical and infrastructure services to support the implementation of cap-and-trade programs in other North American jurisdictions. The organization was originally founded in February 2007 by the governors of five western states with the goal of developing a multi-sector, market-based program to reduce greenhouse gas emissions; it was incorporated in its current form in 2011.
Structure
Since its reincorporation in 2011 as a non-profit corporation, WCI is governed by a Board of Directors appointed by the participating jurisdictions. Each jurisdiction appoints two voting directors to the Board.
History
The Western Climate Initiative was founded as the Western Regional Climate Action Initiative on February 26, 2007, by the governors of Arizona, California, New Mexico, Oregon and Washington. The founding agreement stated the goal of the WRCAI was to evaluate and implement ways to reduce their states's emissions of greenhouse gases and achieve related co-benefits. These states and future participants in the initiative (collectively known as WCI "partners") also committed to set an overall regional goal to reduce emissions (set in August 2007 as 15 percent below 2005 emission levels by 2020), participate in a cross-border greenhouse gas registry to consistently measure and track emissions, and adopt clean tailpipe standards for passenger vehicles. By July 2008, the initiative had expanded to include two more U.S. states (Montana and Utah) and four Canadian provinces (British Columbia, Manitoba, Ontario and Quebec). Together, these partners comprised 20 percent of the U.S. GDP and 76 percent of the Canadian GDP.
Goals and design
The most ambitious and controversial objective of the WCI was to develop a multi-sector, market-based program to reduce greenhouse gas emissions. Detailed design recommendations for a regional cap-and-trade program to reduce greenhouse gas emissions were released by the WCI in September 2008 and July 2010. By December 2011, California and Quebec adopted regulations based on these recommendations. (The WCI has no regulatory authority of its own.) Key administrative aspects of the regional cap-and-trade program are being implemented in 2012. Power plants, refineries, and other large emitters must comply with the cap in 2013. Other greenhouse gas emission sources, such as suppliers of transportation fuels, must comply with the cap beginning in 2015. Among other things, the Western Climate Initiative lays the foundation for a North American cap-and-trade program, not only in its design and implementation, but in its potential acceptance of greenhouse gas emissions offsets from projects across North America.
Criticisms of WCI
Some observers described the entire project as greenwash designed to avoid committing to the Kyoto Protocol, and cited evidence that much more drastic cuts, up to 40%, could be achieved without affecting investment yield in equities, a good indicator that such cuts would not affect economic prospects in the economy as a whole.
Partners vs. observers
Several U.S. partners, although active participants in the design of the program, announced in 2010 that they would either delay or not implement the program in their jurisdictions. The partnership was therefore streamlined to include only California and the four Canadian provinces actively working to implement the program. As of January 2012, regulations have not been issued by British Columbia, Manitoba, or Ontario, although a carbon tax in British Columbia will be increasing to $30/tonne of CO2 equivalents in July 2012. Several WCI partners also remain active in the International Carbon Action Partnership, an international coordinating body for several such regional carbon trading bodies.