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California joins other states, Canadian provinces in proposing 'cap and trade' program

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Four Canadian provinces and seven western states, including California, are proposing market rules for trading and cutting greenhouse gas emissions. KPCC's Molly Peterson reports.

Molly Peterson: The rules are part of the Western Climate Initiative. It aims to cut human-caused global warming by issuing a set number of pollution permits to industry. Then it would enable trading below a fixed cap for harmful emissions. Adam Rose, a research professor in USC's School of Policy, Planning and Development, says the planned cap-and-trade market would cover industries from power plants, to cement factories, to transportation.

Adam Rose: So in, for instance, California, that represents about 80-plus percent of its emissions.

Peterson: California's also the only state that already has laws on the books authorizing it to participate. The initiative's draft rules form a course to steer by for six states still fashioning laws, and for affected industries. For example, the program recommends auctioning off a minimum of 10 percent of carbon permits to start.

That would raise revenue from polluting companies that states can direct towards control measures. That number's far less than California mandates, but more than industries would prefer. USC's Adam Rose says companies are pushing for a national market they say would be cheaper.

Rose: The national system can probably achieve the outcome at lower cost; industry typically is supporting the national effort, but in part I think because they think they can have greater influence at the national level.

Peterson: Plans like that have stalled in Congress, and President Bush has opposed a countrywide climate market. So the Western Climate Initiative and similar efforts in the midwestern and northeastern United States will keep bubbling along in the background as election season continues. Both major-party candidates for president have endorsed some form of a national cap-and-trade scheme.