News | Devilish Details: Huntsman’s plan to cut global warming may be the most ambitious in the country—and may do nothing. 

Whatever Utah’s global-warming-denying Legislature might say about the plan, it’s true that, on paper, the Western Climate Initiative—unveiled in broad outlines last month by governors of seven Western states and four Canadian provinces—is the most ambitious attempt yet to regulate carbon dioxide and other greenhouse gases. It is also far from a done deal. Depending on negotiations during the next year, the plan could mean dramatic new restrictions on cars and power plants, or it might mean nothing at all, according to Utahns who have looked at the plan.

The devil is in the details.

In its broad sweep, the Western Climate Initiative “is a huge step forward,” says Sarah Wright, coordinator of Utah Clean Energy, a group promoting renewable energy for the Beehive State. Other U.S. states already have regulatory systems to reduce greenhouse gases produced by electric power plants, but the Western Climate Initiative is the first attempt to extend regulation to automobiles.

“It is filling a void left by no action on the federal front,” Wright says. “Hopefully, it will set the stage for more aggressive action going forward once we have a new [federal] administration.”

Huntsman’s energy office spent the past 18 months with other Western Climate Initiative participants assembling a proposed framework that calls for reducing greenhouse-gas emissions 15 percent by 2020 through a cap-and-trade system. A “cap” is placed on the amount of allowed emissions, and it declines each year. Polluters pay for every ton of greenhouse gases they release. Those who clean up systems can sell unneeded pollution “allowances” to other polluters.

But, for now, no one knows if the pollution allowances will be auctioned to the highest bidder or given away for free. In Salt Lake City on Oct. 16, Huntsman’s energy advisers participated in a work meeting to figure out how the cap-and-trade would work for electric power plants. If not every state participates—Idaho, Colorado, Wyoming and Nevada currently don’t—what’s to prevent power companies from up and leaving Utah?

Power producers PacifiCorp and Bonneville Power have seats at the table, and aggressive lobbying can be expected on all sides.

PacifiCorp, the parent company of Rocky Mountain Power, has a fundamental problem with the cap-and-trade idea, says company spokesman David Eskelsen: There are no existing technologies to reduce coal-fired power-plant emissions. Without new technology, “Cap-and-trade is just a tax on electricity produced by burning coal,” he says. “It doesn’t do anything to reduce emissions of carbon dioxide.”

In comments submitted to Western Climate Initiative planners, PacifiCorp asked to ease regulations on nuclear energy if a cap-and-trade framework is imposed, and implored planners to wait for a national carbon-emissions system.

The Utah Business Climate Change Coalition—a group including Kennecott, Big West Oil and natural-gas company Questar—said charging for pollution rights could cause some companies to move out of state, and questioned if Utah even had the legal right to enforce the plan.

Gov. Huntsman’s Energy Adviser Dianne Nielson says planners understand the difficulties Utah’s home-grown energy producers face in a carbon-regulated world. She says Utah will spend the next three years developing technology to clean up coal-fired power plants, and notes Utah’s short-term carbon-reduction goals don’t depend on cleaning up coal. Just half of the 15 percent reduction would come from a cap-and-trade system with an equal amount promoting energy efficiency or purchasing “renewable” energy, like wind power. Utah’s energy office is even looking at adopting the strict car tailpipe-emission limits California is trying to impose on automakers.

Nielson says the potential impact of global-warming regulations on Utah’s coal beds is one reason Huntsman joined the Western Climate Initiative. Before Utah, no participating states were in the coal-fired power business. Nielson expects Utah’s regulations to be eclipsed by a federal cap-and-trade program, maybe even before the Western Climate Initiative begins. Participating early gives Utah “a seat at the table” to “make sure [future federal regulation] meets a commonsense approach that encourages economic development and clean fossil-fuel use.”

Environmental groups also have misgivings. The Western Climate Initiative doesn’t begin until 2012—a potential incentive for polluters to emit as much gas as possible between now and then. And vehicle fuel wouldn’t be regulated until 2015.

The Western Climate Action Network—a group formed to lobby for greenhouse-gas action and headlined by the mayors of Salt Lake City and Salt Lake County—takes issue with part of the initiative that lets states give away, for free, 90 percent of the pollution allowances industry would trade in the system. “A fundamental core position in the environmental community is that the polluter pays,” says Susan Frank, action network coordinator. In written comments, the group notes Europe’s cap-and-trade giveaways created huge profits for polluting industries.

Some environmental groups worry the whole regulatory system could become a joke, if the Western Climate Initiative lets polluters meet emission limits by cleaning up the other people’s environments—creating so-called “offsets.”

The idea is that, for instance, planting trees in a rain forest does just as much to cure global warming as cleaning up emissions in Utah. But the Union of Concerned Scientists found the Western Climate Initiative would have limited impact on regional greenhouse gases and local pollution if such offsets were widely available.

Other green groups, however, join industry in wanting as many offsets as possible—the Nature Conservancy specifically suggesting investment in international forests.

Kathy Van Dame, of the Wasatch Clean Air Coalition, wants any climate benefits to stay in Utah. She also urges that emissions from Utah’s oil and gas fields eventually be regulated.

After all these details get worked out comes the hard part: selling skeptical Utah lawmakers on the plan. Huntsman will spend the next year trying via a “task force,” ending with a proposal for the 2010 Legislature.