US states could deploy a loose framework of rules to help meet federally-set utility emission goals more cheaply and side-step political wrangling, a think tank said on Tuesday.
States should adopt a “common elements” approach that may enable crediting mechanisms to develop, according to a policy brief by Duke University’s Nicholas Institute for Environmental Policy Solutions.
- It would allow carbon credits to trade even between states adopting absolute emission caps and so-called “rate-based” standards for their power plants.
- This would merely require common standards for crediting emission reductions and common or linked tracking systems to ensure against double counting.
- It could allow market-based mechanisms to develop without requiring their specific endorsement by states
As such, the approach appears similar to the Framework for Various Approaches (FVA) being developed at UNFCCC talks to help meet global emission goals. The FVA would allow nations to make use of markets without explicitly endorsing them, thereby allowing carbon markets to develop worldwide without requiring the consensus of almost 200 nations.
US State officials are drawing up plans on how meet the national-level EPA plan to cut carbon emissions from power plants, with many considering allowing carbon trading between plants as a way of limiting costs.
But the plan is disputed by some lawmakers, and thirteen US states have backed a lawsuit against it.
“The prospect of pursuing market mechanisms, including interstate markets, may raise practical and political challenges for some states … the common elements approach provides an opportunity to capture the advantages of transferring low-cost reductions among states without mandating a top-down compliance strategy to power companies,” the brief said.
By Ben Garside – ben@carbon-pulse.com
