In recent years, there has been some congressional support for a mandatory reduction program. In the absence of action by the federal government to establish a national program that directly addresses GHG emissions, a number of states (and local governments, whose activities are not covered in this report ) have taken action in this arena. Some states view their GHG policies as economic opportunities. Mandatory Programs to Reduce Greenhouse Gases

Mandatory programs to require GHG reductions represent the most aggressive end of the state action spectrum. Regional Greenhouse Gas Initiative

One of the more significant climate change developments at the state level is the Regional Greenhouse Gas Initiative (RGGI, pronounced "Reggie"). Although RGGI is one of the more aggressive state programs addressing climate change, the program has received some criticism and may face upcoming challenges. For example, if a RGGI state lowers its emissions by importing more power from a non-RGGI state, the emissions reductions in the RGGI state may be offset by an emission increase in the exporting state. Western Climate Initiative

Seven U.S. states and four Canadian provinces are participating in the Western Climate Initiative (WCI). The states and provinces set a regional, economy-wide target to reduce GHG emissions to15% below 2005 levels by 2020. The recommendations include a cap-and-trade system that would cover emissions from electricity generation and large industrial and commercial sources in 2012. In addition, states are working on other mechanisms that would require GHG emission reductions. The electricity-generating sector is often considered a primary candidate for emission reduction, because in most states electric power plants account for the highest percentage of carbon dioxide emissions. The LCFS aims to reduce the carbon intensity of California's transportation fuels by 10% by 2020. In May 2007, 30 states formed the Climate Registry, which aims to establish a standard system for GHG emissions reporting. Almost half (23) of the states have joined one of the three regional emission (all GHGs or just carbon dioxide) reduction programs: the Midwest Accord, WCI, and RGGI. With this range of state activity, it is difficult to predict the precise consequences of state-led climate change actions. For automotive manufacturers, the California motor vehicle regulations—which at least 16 states have indicated they plan to implement if EPA approves the waiver (discussed above)—will likely have the effect of dividing the market, potentially requiring the manufacture of a different class of cars to meet the new standards (scheduled to apply in 2009). Patchwork of Regulations

One concern shared by many observers, particularly industry stakeholders, is that state climate change programs (in lieu of a federal program) will create a patchwork of regulations across the nation. The possibility of legal challenges creates considerable uncertainty regarding the future of state climate change actions, particularly the more aggressive programs.
In the absence of a federal climate change program, a number of states have taken actions that directly address greenhouse gas (GHG) emissions. States' efforts cover a wide range of policies. Although much of the early activity was largely symbolic, the more recent state actions have been more aggressive.
Twenty-three states have joined one of the three regional partnerships that would require GHG (or just carbon dioxide) emission reductions. Set to take effect in 2009, the Regional Greenhouse Gas Initiative (RGGI) is a partnership of 10 Northeast and Mid-Atlantic states that creates a cap-and-trade system aimed at limiting carbon dioxide emissions from power plants. Seven western states (and four Canadian provinces) have formed the Western Climate Initiative, which set an economy-wide GHG emissions target of 15% below 2005 levels by 2020. In addition, six states (and one Canadian province) signed the Midwestern Greenhouse Gas Reduction Accord, which aims to establish a multi-sector, GHG cap-and-trade program in the Midwest. The latter two programs are still in the early development stages; RGGI is on schedule for 2009, and participating states have already held one emission allowance auction.
California has addressed GHG emissions on several fronts. To complement its statewide emissions reduction regime, California established GHG performance standards that would effectively limit the use of coal-generated electricity in California. In 2004, California issued regulations to reduce greenhouse gases from motor vehicles. At least 16 other states have indicated they intend to follow California's new vehicle requirements. In addition, the state has also taken action to reduce the carbon intensity in its transportation fuels.
Predicting the precise consequences of the state-led climate change actions is difficult. Some actions, particularly the mandatory emission reductions, may create economic effects, especially in the automotive manufacturing and electricity-generating sectors. Industry stakeholders are especially concerned that the states will create a patchwork of climate change regulations across the nation. This prospect is causing some industry leaders to call for a federal climate change program. If Congress seeks to establish a federal program, the experiences and lessons learned in the states may be instructive.
Although some states are taking aggressive action, their possible emission reductions may be offset by increased emissions in states without mandatory reduction requirements. This is perhaps the central limitation of state climate change programs in actually affecting total greenhouse gas emissions. Legal challenges represent another obstacle for state programs, particularly for the more aggressive, mandatory programs.