Colorado not ready to crack down on carbon: the Ritter administration is watching--but not joining--a regional cap-and-trade plan.

• Author: Best, Allen
• Position: [PLANET-PROFIT REPORT] CURBING CARBON

THE MARKET-BASED CAP-AND-TRADE mechanism for reducing carbon dioxide and other greenhouse emissions is coming rapidly--perhaps as soon as 2012 in the West.

Colorado is on the sidelines, taking notes. Despite the campaign of Gov. Bill Ritter to establish a clean energy economy, he elected not to join the Western Climate Initiative. Rules for the emerging market are instead being hammered out by seven states and three Canadian provinces. Their goal is to reduce greenhouse gas emissions 15 percent by 2025, and between 50 percent and 85 percent by mid-century.

Few people still debate the merits of reducing greenhouse gas emissions. But there's a lively debate about how to achieve those reductions. The debate is particularly sharp in Colorado, where there are vast stores of coal, gas and oil. Some say the state's economy could be wrecked by a well-intentioned but impractical market mechanism that fails to recognize the role that hydrocarbons will play for decades more. Renewables such as wind and solar cannot begin to fill that gap, they say.

The Ritter administration is only observing Western Climate Initiative deliberations because it expects this and other regional efforts to be superseded by federal action.

"Everybody thinks the feds will come up with a cap and trade," says Ginny Brannon, climate change manager for the Colorado Department of Public Health and Environment. "And if it is viable, these regional initiatives will collapse into that."

If Congress does not act, Colorado can reconsider whether the Western Climate Initiative is a good fit, she says.

Even as the dust settles on the "is it real?" debate about global warming, arguments are growing about how to best reduce emissions. One side advocates a straightforward carbon tax. The Wall Street Journal last year polled 50 economists, and 47 of them said the carbon tax would most effectively stimulate innovations.

A handful of states already have such watered-down taxes on carbon, commonly called public benefits fees, usually applied to electricity bills. The money is then redirected to energy efficiency and renewable energy projects. British Columbia in July began imposing a tax on gasoline, oil and gas that will escalate until 2012.

In Colorado, a group called Clean Energy Progress proposed a similar tax, a "fee" of $3 per ton of C[O.sub.2] emissions. The group's leader, J. Thomas McKinnon, a professor of chemical engineering at the Colorado School of Mines, said the tax would have...