From: Timothy Gardner, Reuters
Published October 17, 2006 12:00 AM

California U.S. Northeast to Unite on Forming CO2 Market

NEW YORK -- California Gov. Arnold Schwarzenegger said Monday his state will work with New York and other eastern states to create a market that will cut emissions linked to global warming.

Schwarzenegger met with New York Gov. George Pataki to discuss the plan Monday, the latest move by the Republican governors to bypass President Bush's policy on heat-trapping gases. Bush favors voluntary means of cutting the gases most scientists say could lead to stronger storms, heat waves and flooding by melting glaciers.

"No state can fight this war alone," Schwarzenegger told reporters at an energy-efficient apartment building. "Our cooperation can be a model to the rest of the states."

Last month, Schwarzenegger signed into California law the Democratic-sponsored Global Warming Solutions Act of 2006, which mandates economy-wide caps on emissions to reduce greenhouse gases by 25 percent by 2020.

Pataki spearheaded the Regional Greenhouse Gas Initiative after Bush withdrew from the the 160-nation Kyoto Protocol on global warming in 2001.

The RGGI agreement is based on a successful U.S. trading program to reduce smog-forming pollutants. It would cut carbon dioxide output from power plants in seven Northeastern and mid-Atlantic states by 10 percent by 2019.

Schwarzenegger said he will sign an executive order that calls on California to develop a market-based program that permits emissions trading with the European Union, the RGGI and other jurisdictions.

"I want to develop a framework that allows us to work together in the same system as they do," Schwarzenegger said of the RGGI.

The governor, who is running for re-election in November, faced opposition on the plan. A spokesman for his Democratic rival, state Treasurer Phil Angelides, said in a statement that only federal laws would allow the states to form an emissions exchange.

Schwarzenegger said recently he would sell his emissions-spewing Hummer sports utility vehicles but said he has "absolutely" no regrets about driving them in the past. "The important thing is to move forward," he said.

Schwarzenegger has a Hummer that runs on hydrogen instead of gasoline and it is touring the world to show people what fuels of the future can be, he said.

A Schwarzenegger spokesman said details have not been worked out on where the multi-state emissions market would be based or how it would work.

The European Union launched its Emissions Trading Scheme last year and billions of dollars worth of credits have traded on it. In emissions markets, companies are forced to cut output of the gases by a certain amount. Companies that do so can sell credits for the right to pollute to companies that have not.

Schwarzenegger also met Monday with New York Mayor Michael Bloomberg, also a Republican, to tour an emissions trading desk at Credit Suisse.

Source: Reuters

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