In the absence of a federal program requiring GHG reductions, a growing number of U.S. states are taking action in this arena. Although a majority of states have addressed climate change to some degree (e.g., by creating GHG inventories or state action plans ), the most aggressive actions have come from a smaller group of states, including California and a coalition of states from the Northeast and Mid-Atlantic regions. The first section of this report discusses the activity in California. The second section focuses on the Regional Greenhouse Gas Initiative (RGGI), a cooperative effort of 10 states in the Northeast and Mid-Atlantic regions to reduce carbon dioxide emissions from power plants. The report's final section considers these state-led actions from a federal policymaking perspective, examining the potential effects, limitations, and legal challenges of state-led climate change actions. California has enacted several significant pieces of climate change legislation, each addressing GHG emissions in different ways. This section discusses the actions California has taken to decrease its GHG emissions. For example, the law does not specifically require the use of a market-based system, such as a cap-and-trade program, to reduce GHG emissions. are used to generate electricity for consumers. The new performance standards will affect not only California, but also other states in the West. The LCFS aims to reduce the carbon intensity of California's transportation fuels by 10% by 2020. Starting in January 2009, RGGI states have agreed to implement a cap of 188 million short tons of carbon dioxide emissions from power plants. The cap is intended to stabilize emissions through the end of 2014. In 2015 and each subsequent year, the emissions cap would be lowered incrementally, so that by 2018, the cap would be 10% below the initial level. Some observers consider RGGI to be a model for a possible federal cap-and-trade program, and thus several of RGGI's design elements are generating interest and debate. Issues for Congress

The Regional Greenhouse Gas Initiative (RGGI) and the climate change developments in California raise several issues that may be of interest to Congress. Patchwork of Regulations

One concern shared by many observers, particularly industry stakeholders, is that state climate change programs (in the absence of a federal program) will create a patchwork of regulations nationwide. There are already several lawsuits against state actions that seek to regulate GHG emissions from motor vehicles.
In the absence of a federal program requiring greenhouse gas (GHG) emission reductions, a growing group of U.S. states are taking action in this arena. Significant actions have been undertaken in California and by a coalition of states from the Northeast and Mid-Atlantic regions.
California has undertaken several initiatives that seek to reduce GHG emissions. In 2004, the state issued regulations to reduce GHG emissions from motor vehicles. At least 14 other states have indicated that they plan to implement California's new vehicle requirements. In 2006, California passed two climate change statutes. The first establishes a statewide cap on GHG emissions. The second, once it becomes applicable, effectively limits the use of coal-generated electricity in California. The state has also taken action to reduce the carbon intensity in its transportation fuels.
The Regional Greenhouse Gas Initiative (RGGI), a partnership of10 Northeast and Mid-Atlantic states, sets up a cap-and-trade system aimed at limiting carbon dioxide emissions from power plants. The cap is scheduled to take effect in January 2009 and cap carbon dioxide emissions at 188 million short tons through the end of 2014. In 2015, the cap would begin to decrease, so that by 2018, emissions would be capped at 10% below the initial level. Because some observers see RGGI as a possible model for a federal cap-and-trade program, several of RGGI's design elements are generating interest and debate.
Predicting the precise consequences of these state-led climate change actions is difficult. The actions may affect energy markets to some degree by encouraging the use of fewer carbon-intensive fuels. Many observers suggest that the range of state actions will catalyze federal activity. 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.
The RGGI and climate change activities in California are aggressive, but the resulting emission reductions may be offset by increased emissions in states without such requirements. This is a primary limitation of state climate change programs. Legal challenges to the state actions, particularly those that may affect interstate commerce, represent another obstacle.