Tuesday, December 13, 2011

Six U.S. States Withdraw from the Western Climate Initiative

This is last month’s news, but I didn’t discover it until a few days ago when I was updating my draft casebook on Climate Change Law & Policy (Aspen, forthcoming 2012, with Hari Osofsky): all the U.S. states except for California withdrew from the Western Climate Initiative (WCI) in November. Having lost Arizona, Montana, New Mexico, Oregon, Utah and Washington, the WCI now consists of California and four Canadian provinces (British Columbia, Manitoba, Ontario and Quebec).

What happened? In 2010, Arizona and Utah both announced that they would remain WCI partners but not participate in the WCI cap-and-trade program. In both states, the governor who had agreed to the pact was no longer in office, and the new governor decided that the program was not in the state’s interest (see, e.g., State of Arizona Executive Order 2010-06). By late 2010, the only U.S. states that had passed enabling legislation for the regional cap-and-trade program were California and New Mexico. Then, New Mexico elected a new governor who didn’t support the pact, and she removed all members of the board working on the regulations four days after taking office on January 1, 2011. In the end, the announcement last month that California would be the only remaining WCI partner in the U.S. was not particularly surprising.

Why did it happen? One part of the answer is “the Great Recession.” Another part comes from acknowledging the instability inherent in sub-national regional agreements like the WCI. Finally, it is instructive to consider the reasons that climate-related regional agreements emerged in the first place. In my article, Regional Climate Regulation: From State Competition to State Collaboration, 1 SAN DIEGO J. CLIMATE & ENERGY L. 81 (2009), I gave three explanations for the high degree of state collaboration in climate change policy:

1) Policy diffusion: that states were creating forums for sharing and developing climate policy information;

2) Cap-and-trade efficiencies: states wanted to use a cap-and-trade approach but needed larger markets to increase efficiency and reduce leakage; and

3) The existence of a regional race to national influence: regions were essentially competing to become the model for federal legislation.

It follows that states presently have less interest in sharing information about climate policy, less interest in a cap-and-trade program, and/or less confidence that there will be federal legislation in the near future. For various (generally depressing) reasons, all three seem to be true.

- Lesley McAllister


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