1. Jeff Wennberg, Senior Consultant The Center for Climate Strategies
Western Climate Initiative: status report New England Restructuring Roundtable Boston, MA December 5, 2008
Jeff Wennberg, Senior Consultant
The Center for Climate Strategies

2. The Western Climate Initiative (WCI) was launched in February 2007 by the governors of Arizona, California, New Mexico, Oregon, and Washington, signaling a long-term commitment to significantly reduce regional greenhouse gas emissions. Since the WCI first formed, the states of Montana and Utah and the Canadian provinces of British Columbia, Manitoba, Ontario, and Quebec have joined the partnership.
12/05/2008

3. Western Climate Initiative

4. WCI Quick Facts
The final recommended program design was released September 23, 2008;
GHG region-wide reduction goal: 15% below 2005 by 2020;
Will cover 90% of regional emissions when fully implemented;
The first compliance period is set to commence January 1, 2012;
12/05/2008

5. WCI Quick Facts
Covered sectors include electricity, industry, transportation and residential and commercial fuel use;
The seven states and four provinces represent over 70 percent of the Canadian economy and 20 percent of the U.S. economy;
12/05/2008

6. WCI and North America Population
WCI includes Partners and Observers
12/05/2008

7. WCI and North America GDP
WCI includes Partners and Observers
12/05/2008

8. WCI Sector Coverage
The WCI cap-and-trade program will cover emissions of the six main greenhouse gases from the following sectors of the economy:
Electricity generation, including imported electricity
Industrial and commercial fossil fuel combustion
Industrial process emissions
Gas and diesel consumption for transportation
Residential fuel use
12/05/2008

9. WCI Phase 1
1/1/2012 – 12/31/2014; First compliance period covered sources:
electricity, including imported electricity;
industrial combustion at large sources;
industrial process emissions for which adequate measurement methods exist.
12/05/2008

10. WCI Phase 2
1/1/2015 – 12/31/2017; Second compliance period covered sources:
same as Phase 1, plus
transportation fuels;
residential, commercial and industrial fuels not otherwise covered.
12/05/2008

11. WCI Electric Sector
The point of regulation is the First Jurisdictional Deliverer (FJD).
For sources within WCI jurisdictions, the FJD is the generator.
For power that is generated outside the WCI jurisdictions (or generated by a federal entity or on tribal lands) for consumption within a WCI Partner jurisdiction, the FJD is the first entity that delivers that electricity over which the consuming WCI partner jurisdiction has regulatory authority.
12/05/2008

12. First Jurisdictional Deliverer
Graphic by World Resources Institute
12/05/2008

13. WCI Large Industrial Sector
The point of regulation will be at the point of emission;
12/05/2008

14. WCI Small Industrial, Commercial and Residential Sectors
The point of regulation will be where the fuels enter commerce in the WCI Partner jurisdictions, generally at a distributor;
The precise point is to be determined and may vary by jurisdiction.
12/05/2008

15. WCI Transportation Sector
The point of regulation will be where the fuels enter commerce in the WCI Partner jurisdictions, generally at the terminal rack, final blender, or distributor;
The precise point is to be determined and may vary by jurisdiction.
12/05/2008

16. WCI Emissions Threshold
25,000 metric tons of carbon dioxide equivalents (CO2e) or more;
Mandatory reporting data may be used to adjust this threshold for specific industries where necessary.
12/05/2008

17. WCI Reporting
Mandatory monitoring for the six GHG gasses to commence January, 2010;
Reporting of 2010 emissions will begin in early 2011;
Entities subject to reporting are those with annual emissions of 10,000 metric tons of CO2e or more;
Third party verification of reported emissions required.
12/05/2008

18. WCI Offsets
Use of offsets limited to no more than 49% of the total emission reductions by source;
Priority project types:
Agriculture (soil sequestration and manure management);
Forestry (afforestation/reforestation, forest management, forest preservation/conservation, forest products);
Waste management (landfill gas and wastewater management).
Partner jurisdictions may accept offset credits from developing countries through the Clean Development Mechanism (CDM)
12/05/2008

19. WCI Banking and Borrowing
Banking is allowed without limit except to prevent market manipulation;
Borrowing is not allowed.
12/05/2008

20. WCI Allowance Distribution
Auction a minimum of 10% (regionally) in 2012 (not binding on individual Partners);
Growing to 25% in 2020;
Partner jurisdictions may auction a greater portion;
Auctions will be regionally conducted.
12/05/2008

21. WCI Preliminary Economic Modeling Results
12/05/2008

22. WCI Work Moving Forward
Develop FJD model;
Set emissions caps and methodology;
Complete economic modeling;
Issue model reporting rule;
Develop regional auction design;
Develop early reduction recognition plan.
12/05/2008

23. Florida
Governor’s Energy & Climate Action Team recommended observer status with RGGI and WCI ( );
Action Team recommended potentially joining both WCI & RGGI;
Florida 4th largest economy in U.S.
2007 Population = 18,251,243
2007 GDP = $609,899 million
Projected 2020 economy-wide emissions equal 70% of California.
12/05/2008

24. Florida
12/05/2008

25. Questions? Western Climate Initiative Center for Climate Strategies
Center for Climate Strategies
Jeffrey Wennberg
15 Grandview Terrace, Rutland, VT 05701, (802)
12/05/2008