Background

The weight of scientific evidence shows that the earth is warming because of human activity – specifically the emission of greenhouse gasses – and the consequences of that warming could be catastrophic. Although uncertainty remains, we know enough to begin taking action now to reduce greenhouse gas emissions.

With only 4% of the world’s population, the United States produces almost a quarter of all greenhouse gases.(1) According to the U.S. Department of Energy, despite ongoing voluntary reduction programs, U.S. emissions increased more than 10% since 1990 and, at the present rate, U.S. carbon emissions are projected to increase by more than 40% in the next 20 years.(2)(3) Although the Bush administration has acknowledged that global warming is a serious problem, it has strongly opposed any international or domestic mandatory actions to reduce emissions, and has even opposed the mandatory reporting of emissions from large sources. Instead, the administration favors long-term scientific and technological research that gives the appearance of action while ignoring the emission reductions that can be achieved using existing technology.

International Background

The Kyoto Protocol is a landmark international agreement that, for the first time, establishes binding commitments for industrialized countries to reduce their global warming emissions. The Kyoto Protocol asks the United States to reduce its emissions by 7% from its 1990 levels by 2012. Other industrial nations have emissions goals ranging from growth targets (e.g., for economies in transition) to an 8% reduction for the European Union.(4) Developing countries do not have emission reduction commitments at this time, in accordance with the principle of “differentiated commitments” established in the (Senate-ratified) 1992 Rio Treaty on climate change.(5)

More than 100 countries have ratified the protocol, including 15 European Union nations, Canada, and Japan.(6) The Bush administration, however, has pulled out of international climate negotiations, rejecting the Protocol as unfair to American businesses because of its potential cost and the lack of reduction targets set for developing countries.

Domestic Background

Despite a campaign promise to control global warming pollution from power plants, the Bush administration has opposed efforts to enact any mandatory emission reductions. Instead, the administration has introduced power plant legislation (Clear Skies Initiative) that would ignore global warming and weaken implementation of the existing Clean Air Act. The administration also opposed the Climate Stewardship Act, introduced in 2003 by U.S. Senators Joseph Lieberman (D-CT) and John McCain (R-AZ), which would have required reductions from power plants, vehicles, and other major emissions sources.(7) The bill was narrowly defeated in the Senate but received a surprisingly strong 43 votes. U.S. Representatives Wayne Gilchrest (R-MD) and John Olver (D-MA) introduced a House companion on March 30, 2004. The bill has strong support from a large, bipartisan group of Representatives.(8)

The administration has also proposed a voluntary national goal of limiting global warming emissions intensity (the emissions per unit of Gross Domestic Product). However, not only is the goal voluntary, but the target level is equivalent to “business as usual” emission projections.

A voluntary national greenhouse gas registry was created in 1993 as part of the Clinton administration’s Climate Change Action Plan.(9) However, the registry fails to provide any framework or standardization that would make recorded emissions credible or verifiable and has clearly failed to constrain emissions growth in the U.S. Multiple entities can record the same reductions or sequestration increases and may claim emission reductions without any reference to their companies’ total emissions. Such features allow companies to claim reductions while increasing overall pollution. These two loopholes greatly undermine the registry’s intent and effectiveness. Moreover, because it is voluntary, only a small portion of U.S. emission sources are participating in the reporting system. The Bush administration is currently revising the national registry, but as of early 2004 appears to be retaining many of the existing problems.

The Need for State Action(10)

In the absence of a cohesive national policy addressing greenhouse gases, it is up to the states to lead the United States in combating global warming pollution. Many states have already created their own programs.

New Jersey and Maine have taken the most progressive steps to date, requiring all stationary sources to report direct emissions of carbon dioxide and methane. Wisconsin also requires large emitters to report CO2 emissions. West Virginia has recently introduced legislation that would do the same, but the bill did not come to a vote before the legislative session ended. Illinois, Maine, Oregon, Texas, and Washington have passed legislation requiring new or improved programs to inventory greenhouse gas emissions, and Georgia, Maryland, New York, North Carolina, and Vermont have introduced various bills to address greenhouse gas production. California has passed legislation regulating carbon dioxide emissions from vehicles. California also has developed the most comprehensive and credible voluntary reporting program, the California Climate Action Registry, which requires participants to report entity-wide emissions. Beyond greenhouse gas reporting, New Hampshire and Wisconsin have voluntary registries that allow the reporting of emission reductions.

Perhaps even more promising are the regional efforts undertaken by some states. Because climate change is not an isolated issue, regional efforts can save states money and reduce “leakage” that results when a company can register reductions in one state by offsetting those reductions in another state. The Northeastern states have launched the Regional Greenhouse Gas Initiative, pursuant to which they are developing a cap-and-trade program to reduce carbon dioxide emissions from power plants, and are developing plans to launch a Regional Greenhouse Gas Registry. These programs may be designed to allow any other interested state to join them, and may be expanded to include all stationary sources and all greenhouse gases. California, Oregon, and Washington also are working together to establish new policies and programs to reduce greenhouse gases through the Governors’ West Coast Global Warming Initiative.

State Greenhouse Gas Databases that require reporting of greenhouse gases are the first step to establishing the infrastructure needed to support a future cap-and-trade program. State registries will allow companies to help shape that emerging policy. States can have a tremendous impact on climate by designing cost-effective and environmentally-sound regulatory programs that will reduce emissions and provide a model for the nation. Several states produce more emissions than entire countries – Texas’ emissions exceed France’s and California emits more than Brazil.

While some businesses will oppose any new regulation, many companies have recognized that federal regulation is inevitable and have identified opportunities for competitive advantage in a carbon-constrained economy. These companies are interested in supporting and helping to shape emerging climate policies at the state level. Policies that promote energy efficiency, in particular, can aid businesses by streamlining costs. Early actions by companies such as Dupont, BP, and Stonybrook Farms have received favorable media attention.

According to a 2000 poll by American Viewpoint (a Republican Washington D.C. polling firm), Fortune 500 executives overwhelmingly believe that global warming is a serious problem, and 34% support Kyoto Protocol measures to address it, including carbon credit trading. Most expect federal regulations limiting greenhouse gas emissions by 2010.(11)

The Greenhouse Gas Database Act does not require greenhouse gas reductions. Rather, it provides a low-cost means for states to monitor sources of greenhouse gas emissions, and provides the framework and protection for businesses to voluntarily reduce emissions. The database will also serve as a tool to better analyze statewide emission footprints and benchmark within and among industrial sectors – an essential first step in designing a sustainable energy or emissions reduction program.

The Pew Center on Climate Change has produced several reports about the state role in climate change, greenhouse gas emissions reporting, and various other policy issues.