Even as some of them fight Washington's new
clean air regulations in court, coal-reliant Midwestern states
are asking the Obama administration to provide rules for an
emissions trading platform that would help them meet the federal
greenhouse gas standards.
Late last month, a coalition of power companies, regulators
and green groups known as the Midwestern Power Sector
Collaborative (MPSC) asked the Environmental Protection Agency
to create ground rules for states that want to trade carbon
emissions permits with other states, an option it feels would
offer one of the cheapest options to meet the agency's proposed
Clean Power Plan.
Meanwhile, state air and energy officials called the
Midcontinent States Environmental And Energy Regulators have met
regularly over the past few months to weigh joint strategies to
comply with the forthcoming regulation.
The Clean Power Plan, the centerpiece of President Barack
Obama's broader climate change strategy, would require states to
collectively cut carbon emissions 30 per cent by 2030. It is due
to be finalized this summer.
In the Midwest, several states oppose the EPA proposal and
some have already tried to sue the agency to block it. Yet
regulators and utilities feel the need to develop the most
cost-effective plan possible should those challenges fail, Nancy
Lange, a Minnesota Public Utilities commissioner, told Reuters.
Last month, Kentucky and Wisconsin joined 13 states in a
case heard at the DC Circuit court aimed at blocking
introduction of the EPA's regulation. Their officials, however,
are observers in the MPSC.
"There is a recognition that if the rule goes forward,
having a plan of action that has been explored and tested and
modeled with your neighboring states is probably a very prudent
strategy," Lange said.
"A larger footprint allows for economies of scale that are
beneficial for consumers," she said.
Inter-state trading - more commonly known as cap-and-trade -
has been effective in reducing emission levels in the U.S.
Northeast, where nine states currently participate in a common
market called the Regional Greenhouse Gas Initiative (RGGI) to
trade carbon permits.
But Midwest utilities and regulators want the EPA to help
establish a voluntary trading platform that states can "opt-in"
in order to meet state targets rather than forming a formal
multi-state market like RGGI where states work toward a common
The Great Plains Institute, a think tank which facilitated
discussions between coal-based power companies, regulators and
green groups in the MPSC, said states want the EPA to establish
guidelines and the market infrastructure for emissions trading.
"No one wants to dictate that any state should be forced to
trade," said Brad Crabtree, vice president of the institute.
But, he added, a carbon market should "be a clear and readily
available option for those who want it."
The EPA plan, which is due to be finalized this summer, has
drawn fierce Congressional opposition, led by Senate Majority
Leader Mitch McConnell of coal state Kentucky and fellow
Republicans, but including some Democrats.
McConnell's hostility to the new regulations took aim at
inter-state trading last week, warning that multi-state
agreements to reduce air pollution require Congressional
approval under the federal Clean Air Act.
In addition to RGGI, California has a carbon market and is
seeking to partner with Oregon and Washington to help each other
comply with the EPA rule.
Opponents have challenged McConnell's argument because the
joint trading programs are voluntary rather than forced on
states by Washington.
Crabtree said Midwestern states are focused on tuning out
the political noise.
"Midwesterners are often seen as pragmatic. When the politics
are settled, this practical approach by states will be the most
sensible way forward given the hand they are dealt," he said.