Midwestern Greenhouse Gas Reduction Accord Still Drafting Regional Cap-and-Trade Program


The next few months are likely to be very active when it comes to climate change legislation. Wisconsin legislators are expected to unveil comprehensive climate change legislation in the next week that could prove to be controversial. Climate change legislation narrowly passed in Congress earlier this year, and is now being debated in the U.S. Senate. World leaders are meeting in Copenhagen over the next few weeks in an effort to reach agreement on ways for countries to limit their CO2 output.

Despite all of the action surrounding climate change at the international, federal, and state levels, there is still another entity seeking ways to impose regulations on manufacturers, businesses, and utilities here in the Midwest. Implemented in November 2007, the Midwestern Greenhouse Gas Reduction Accord is comprised of signatories from six states (Iowa, Illinois, Kansas, Michigan, Minnesota, and Wisconsin) and one Canadian province (Manitoba). The purpose of the Accord is to draft model legislation that would include a regional cap and trade program.

Although the Accord stopped meeting earlier this year, staff has continued drafting final recommendations implementing a cap and trade program. According to some officials linked with the Accord, the purpose of the Accord is a fallback if no federal legislation is enacted.

Some believe that Midwestern Accord officials would try to link Midwestern states with two similar regional programs on the East and West Coasts, known as the Regional Greenhouse Gas Initiative and Western Climate Initiative. The theory is that if Feds fail to act, the three regional entities could step in and impose a cap and trade scheme.

While most of the focus has been at the federal and state levels, the Accord is quietly working on both a cap and trade program and “complementary policies,” such as a low carbon fuel standard. A low carbon fuel standard would discourage Canadian crude oil derived from the oil sands in Alberta, Canada, where the Midwest receives a significant amount of its oil.

Thus, while most people are closely watching climate change legislation in Washington, D.C. and Madison, businesses would be wise to continue to monitor what is taking place with the Midwestern Accord.