Governor Signs Historic Regional Agreement

Today at the 2007 National Governors Association Winter Meeting Governor Schwarzenegger signed an historic agreement with the Governors of Arizona, New Mexico, Oregon and Washington to reduce greenhouse gas emissions in the Western United States. The Governor also challenged the federal government to follow California's lead and take bold action with two new environmental initiatives: a national market-based cap and trade system for greenhouse gas emissions, and a nation-wide Low Carbon Fuel Standard.

Governor Schwarzenegger establishes the nation's largest and most comprehensive regional greenhouse gas reduction program with four other states.

The agreement tackles all emissions sources and, like California's Global Warming Solutions Act (AB 32), is market-based. The Western Regional Climate Action Initiative commits California, Arizona, New Mexico, Oregon and Washington to:

• Set regional GHG reduction goals within the next six months.


• Create a blueprint for a regional market-based program by August 2008 to meet these goals.


• Participate in a multi-state registry to track and manage GHG emissions.


• Continue promoting clean and renewable energy, increasing energy efficiency, advocating for sound regional and national energy policies and identifying new measures to fight global warming.

The agreement is larger and goes further than others. In the absence of federal action to curb GHG emissions, states must lead the way.

In 2003, California, Oregon and Washington created the West Coast Global Warming Initiative, and in 2006, Arizona and New Mexico launched the Southwest Climate Change Initiative.
The Northeastern and Mid-Atlantic states' Regional Greenhouse Gas Initiative (RGGI) focuses specifically on greenhouse gas emissions from power plants. Currently New York, Connecticut, Delaware, Maine, New Hampshire, New Jersey and Vermont participate in the RGGI effort.
The agreement achieves Governor Schwarzenegger's vision for the west.

In June 2006 Governor Schwarzenegger called on the Western states to join California's fight against global warming by establishing a regional greenhouse gas (GHG) reduction program-using market-based mechanisms, such as cap and trade-to reduce harmful emissions.

Governor Schwarzenegger calls for a nation-wide market for greenhouse gas emissions.
The Governor's leadership set the stage for a national goal and a market to meet it. AB 32 authorizes the California Air Resources Board to develop regulations and market mechanisms, including greenhouse gas (GHG) emissions trading, to achieve California's historic reduction targets.

GHG emissions trading is a system where companies and other emitters are given credits that represent the right to emit a specific amount of GHG. The total number of credits on the market cannot exceed the emissions cap. Emitters that exceed the cap must buy credits from those who emit less. Like other commodities, credits are bought and sold by brokers on financial markets.
Credit trading allows emitters to choose if or how they will reduce their output while reducing harmful GHG emissions overall.

Trading achieves a healthy economy and strong environment by giving businesses flexibility while reducing emissions overall. Just a month after signing AB32, Governor Schwarzenegger directed the California Air Resources Board to ensure that the state's emissions trading system will sync with others to achieve maximum market efficiency.

Markets must be compatible with one another so that trading can occur quickly and effectively. In October, Governor Schwarzenegger met with New York Governor Pataki to explore how California's future emissions trading market and RGGI can be linked to provide greater market opportunities.

Under the Governor's direction, California's program will also be compatible with the European Union Emissions Trading Scheme and the Chicago Climate Exchange.



Elizabeth Ashford Perry
Deputy Communications Director
Office of Governor Arnold Schwarzenegger
elizabeth.ashford@gov.ca.gov
(916) 322-3651 - Telephone
(916) 324-6357 - Facsimile