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A cooler future on the horizon: nine eastern states move to cap global warming pollution from power plants.

Article Excerpt
In the Eastern United States, nine states, from Delaware to Maine, emit as much global warming pollution as all of Germany and make up the world's third-largest economy. Europe, however, has mandatory limits on carbon dioxide pollution, as well as an emissions trading system to mitigate the costs of compliance. Here in the United States, no such thing exists, and on a national level plans have yet to materialize. And yet the stakes have gotten so high that a group of pioneering Eastern states are not waiting for the federal government to act. They are establishing a system similar to Europe's, commonly referred to as cap-and-trade.

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The Regional Greenhouse Gas Initiative is the first of its kind in the United States and involves an unprecedented level of cooperation among state governments, industry, and environmental groups coordinated by NRDC. The cap-and-trade system applies only to power plants, which will have to work collaboratively to find the cheapest way to keep greenhouse gas emissions below a regional limit.

"Companies in the Northeast will reduce their carbon risk now," says Dale Bryk, a senior attorney at NRDC and adviser to the group of nine governors who established the system. "They'll learn how to comply with new regulations at the lowest possible cost. And this will give them a competitive advantage in what will inevitably be a carbon-regulated world."

For the cap-and-trade system to succeed, each state has to adopt internal rules consistent with those of every other state. In essence, what the nine governors have said to one another is this: If we all make comparable commitments to reduce emissions, then we can trade. Each power plant will be required to have a permit, or an "allowance", for every ton of carbon dioxide it emits, but it can buy allowances if that's cheaper than reducing emissions by improving efficiency, for example. NRDC is pushing for a requirement that would force plants to pay for each allowance (rather than getting them for free), in effect making regulating carbon emissions simply another cost of doing business. That decision will be made...