Regional U.S. carbon markets may merge
WASHINGTON (Reuters) - The eastern U.S. carbon market may link with other U.S. regions ahead of the launch of a federal greenhouse gas legislation to push for new ways to fight climate change, a New York state official said.
"There's still a lot of time for states to do a lot of development, implementation and incubation of policy to help shape and guide where federal climate action will go," Peter Iwanowicz, the head of New York's climate change office, said at a Carbon TradeEx conference on Tuesday.
He said the Regional Greenhouse Gas Initiative, which New York and nine other states launched at the start of the year, could link over time with cap-and-trade carbon markets developing in the West, known as the Western Climate Initiative, and in the Midwest.
RGGI, which regulates carbon dioxide emissions from power plants, has been in a leader in showing carbon markets how to auction permits to pollute to industry, rather than giving them away -- a policy that helped create a glut of permits in Europe's carbon market.
The Eastern market is more limited in scope than the draft climate legislation that U.S. Reps. Henry Waxman and Edward Markey began circulating late last month. But it will have had years of carbon trading experience by the time a U.S. cap-and-trade market forms. The Waxman draft would not form a national greenhouse gases until 2012, and faces tough fights in the U.S. Senate and from industry.
Brian Turner, a climate official with California's Air Resources Board who is based in Washington, did not comment on whether the regions would link up. But he said that states should continue to find ways to fight climate change beyond the federal program because there was no guarantee that a national program would be sufficient.
Iwanowicz said RGGI is also looking into expanding regulation of carbon emissions in sectors of the economy beyond power generation, including trying to cut emissions from transportation fuels, such as WCI plans to do, as well as from heating oil.
(Reporting by Timothy Gardner; Editing by Christian Wiessner)
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