Regional Climate Initiatives Share Cap and Trade Know-How

The three regional climate initiatives in North America ─ the Northeast and Mid- Atlantic Regional Greenhouse Gas Initiative (RGGI), the Midwestern GHG Reduction Accord (the Accord), and the Western Climate Initiative (WCI) ─ have joined in a cooperative effort to share experiences in the design and implementation of regional cap-and-trade programs, inform federal decision making on climate change policy, and explore the potential for further collaboration among the three regional programs in the future.

Together, these 23 U.S. states and 4 Canadian Provinces account for approximately one-half of the U.S. population, more than one-third of U.S. greenhouse gas emissions, over three-quarters of the Canadian population and one-half of Canadian greenhouse gas emissions. These diverse jurisdictions share a commitment to building a new, green economy and reducing the greenhouse gas emissions that are leading to global warming.

These regional initiatives released a joint white paper, "Ensuring Offset Quality: Design and Implementation Criteria for a High-Quality Offset Program." This paper outlines the common vision shared by the three regional initiatives regarding the key design and implementation criteria necessary to establish a high-quality offset program. That vision includes recognition of the potential value of offsets and a commitment to ensuring their integrity.

All three regional programs incorporate an offset component to reduce compliance costs and increase compliance flexibility for sources covered by the programs. Each regional initiative is committed to preserving the integrity of its program by requiring that emissions reductions achieved through offset projects are real, additional, verifiable, permanent, and enforceable. In addition, the regional initiatives agree that any offset program should be based on uniform standards, not a case-by-case review of specific projects. Offset programs must also have adequate transparency, credible verification, and administrative flexibility.

The regional initiatives have developed this white paper to promote the consistency and integrity of offsets throughout North America. The next step will include applying these quality criteria to specific offset project types. By collaborating on this paper, the participating jurisdictions are moving closer to uniformity among their own programs and aim to inform future federal programs in the United States and Canada. A potential benefit of uniformity is that purchasers of offsets will have greater confidence in the value of the offset, and suppliers will find it easier to meet a consistent set of standards. Another potential benefit is that jurisdictions could accept offsets issued by other jurisdictions, which would enhance the market for offsets.