Kyoto?

[Guest guest]

NEW YORK - The United States, the world's largest emitter of greenhouse gases,

will be left out of global warming decision making when the U.N.'s Kyoto

Protocol takes effect in February.

 

 

Or will it?

Experts say nascent regulatory developments in both East Coast and West Coast

states that would limit emissions and form cap-and-trade carbon markets could

one day force the federal government's hand in forming a national law regulating

carbon.

 

" That's the most likely scenario, " said Claussen, President of

Washington, D.C.'s Pew Centre on Global Climate Change in an interview. " There's

no question that the states are working to fill a vacuum that they see at the

national level. "

 

President George W. Bush pulled out of the Kyoto pact in 2001, arguing that it

was too expensive and wrongly excluded developing nations from a first round of

cuts in emissions.

 

In a cap-and-trade market, businesses have to trim emissions under set limits or

buy credits to continue emitting from companies that have complied with limits.

 

Experts say big industry, such as oil refiners, manufacturers and refiners,

would tire of the costs of complying with a US patchwork quilt of different laws

and different markets. It could become so expensive that they would pressure the

federal government to form a uniform law regulating greenhouse gases.

 

" If in fact, the regional movement gathers steam, this is going to be a

nightmare for corporate America. That means that if (a car company) for

instance, cuts emissions at its plant in California, they can't use that (for

emissions credits) in New York, " said Richard Sandor, Chairman of the Chicago

Climate Exchange, a voluntary carbon dioxide market, where companies like oil

major BP trade carbon credits.

 

New York Governor George Pataki, a Republican, helped form the coalition of East

Coast states that plans to regulate carbon dioxide, by writing to governors of

eastern states last year. It's now known as the Regional Greenhouse Gas

Initiative (RGGI).

 

The group of nine Northeast and Mid-Atlantic states plans to form a carbon

dioxide cap-and-trade market that will launch in 2008. Ahead of that, RGGI

expects to begin limiting carbon dioxide emissions from power plants as soon as

next spring, a RGGI source said. Power plants that cut emissions in 2005 would

earn credits they could sell in 2008 to utilities that prefer buying credits

rather than taking the expensive steps to cut emissions.

 

The same states that make up RGGI have already had success in broadening their

regulation into a federal regulation on emissions, in particular nitrogen oxide

emissions. " States taking action prior to federal legislation creates a quilt or

patchwork that has historically led to calls for more uniform treatment, " said a

RGGI official.

 

California, the US state with the most cars, has already adopted the nation's

first-ever rules to regulate car emissions linked to global warming and the West

Coast Governor's Global Warming Initiative, a coalition of the California,

Washington, and Oregon is moving toward creating cap-and-trade carbon markets.

 

But even with regulation plans forming, the United States will lag Europe. Next

year all 25 European Union nations will start a mandatory carbon emissions

trading system.

 

(Additional reporting by Michael Erman)

 

 

 

Story by Timothy Gardner

 

 

REUTERS NEWS SERVICE