The ambitious plan to confront carbon pollution in the Midwest is facing delays, raising concerns that the multistate cap-and-trade program won't launch on schedule in 2012.
The Midwestern Greenhouse Gas Reduction Accord is an aggressive framework that would reduce emissions up to 20 percent in six states and one Canadian province, stripping carbon from far-flung sources like transportation, power plants, paper mills and other industrial tenants. But potential for a slowdown is looming before the accord goes before individual legislatures for approval.
Some states, like Minnesota, Illinois and others, are unlikely to take up controversial climate policy this year because of approaching gubernatorial elections and stubborn economic difficulties, according to sources. Moreover, the economic modeling meant to showcase the effects of the cap-and-trade program on state families and economies is still incomplete, further slowing the process.
"It's taken much, much longer than anyone anticipated," Bill Grant, who heads the Midwest office of the Izaak Walton League of America and was appointed to the regional climate program by Minnesota Gov. Tim Pawlenty, said of getting the modeling results.
Shifting state contours and congressional lurching are adding complexities. All of the program's six states are entering gubernatorial election cycles this year. Changes are promised. Four states -- Kansas, Michigan, Minnesota and Wisconsin -- will have new governors because of resignations and term limits. Incumbents in Iowa and Illinois, meanwhile, face uncertain contests.
That could have seismic effects on the regional program, which has benefited from supportive, and predominantly Democratic, executives in those states. Pawlenty in Minnesota is the only Republican in the fold, and he was adored by environmentalists for symbolizing a Republican renegade that supported climate policies. That was then. Pawlenty went mute on global warming last year as he positions for a potential run for the presidency.
"To the extent that we get a mix of Republicans and Democrats [as governors], it's going to influence how many states are at that point in a position to move forward" with the program, said Grant, calculating that Republican executives are unlikely to participate, given the sharpening political divisions around climate change. "It is that partisan at this point. Very starkly so."
Lots of work, little time
The Midwestern accord is one of three regional plans that aim to cap greenhouse gas emissions as a way to pressure Congress into addressing climate change nationally. The accord rivals the Western Climate Initiative for having some of the most aggressive carbon abatement policies anywhere. Both systems are scheduled to begin capping emissions in January 2012 through a financial market that charges fees for releasing carbon dioxide into the atmosphere.
"I think a lot would have to happen fairly quickly for 2012 to work," said Doug Scott, director of the Illinois EPA and a participant in the Midwestern accord, noting that the start time might slip. "You're talking about going back to lots of states [for approval]. But as I said, that's still the date that we've got out there."
The more modest third program, the Regional Greenhouse Gas Initiative, is already cutting carbon output from 233 utilities along the East Coast. It does not regulate a wide range of industries like its emerging counterparts, but is considered a success by many for administering the first involuntary carbon market in the country.
The Midwest's challenges are not easy to overcome quickly. Accord participants have drafted a model rule that can be taken to state legislatures for approval. But that can't happen until the economic modeling results are in hand, because lawmakers won't know what impact the program will have on their constituents.
The Western initiative is poised to launch on schedule, though several governments in the group of seven states and four Canadian provinces will likely join in later years. Arizona formally opted out of the program earlier this month.
Rules can't be conjured 'overnight'
Although the Midwestern accord hasn't suffered any state retreats, its overall makeup is less certain than that of the Western program. That led one Western official to wonder "who's really committed to moving forward" in the heartland.
"It takes a while to write these rules. They don't just appear overnight. There's of course a lot of coalition building that goes into building the program and making sure everyone understands how it works," said the official, who agreed to speak freely without attribution. "If they haven't sort of started their rule-writing process, it's hard to start [capping carbon] in 2012."
The Midwestern program made waves when it was announced two years ago. It was meant to show that coal-hungry states are determined to address their emissions. The group's governors raced to release preliminary outlines of the accord last spring in hopes of influencing Midwestern Congress members to support federal cap-and-trade legislation introduced by Democratic Reps. Henry Waxman of California and Edward Markey of Massachusetts.
When Congress narrowly passed the bill last June, action within the accord appeared to slacken as a national climate program seemed just around the corner, said Michael Noble, executive director of Fresh Energy, a Minnesota group contributing to the accord.
"I think a lot of the policymakers have been thrown off stride a little bit by the passage of Waxman-Markey last summer, suggesting that federal action was imminent," he added. "I think that took a little bit of the wind out of the regional sails."
Will the delays be followed by dropouts?
The accord won't stop working toward its goal of preparing Midwestern states for future carbon prices and applying pressure on Congress to act nationally, said Scott of the Illinois EPA. He and other participants believe that it's still possible to launch the program on time, if momentum accelerates and states act fast.
The group has developed detailed assessments related to jobs and transmission in the region. It has also recommended deeply studied scenarios related to energy efficiency, renewable power and other policies for chopping carbon output. And accord members continue to work with the other regional programs to link all three initiatives together, an attempt to, in effect, create a de facto federal climate policy.
"We'll keep moving on our thing, so in the event that something doesn't happen [in Congress], we won't have lost a lot of time waiting on something to happen federally," Scott said.
There are darker possibilities being mentioned among members, however. Missing the program's scheduled 2012 launch would be a delay that could be overcome. The Western program, for example, now plans to phase in states over time as they become ready to participate.
But what happens if, say, several Midwestern states abandon the plan altogether?
"If it were only three states that were to adopt, a decision would have to be made as to whether that really represented critical mass for going ahead or not," said Grant of Minnesota.