Challenges and opportunities for regulating greenhouse gas emissions at the state, regional and local level.

• Author: Doyle, Jim

ABSTRACT

Addressing climate change is one of the great challenges of our age. While the current president has signaled that this will be a top priority under his administration, previous administrations have not pursued a comprehensive regulatory or diplomatic strategy to counteract the causes and consequences of climate change. Until recently, the federal government's efforts in this area have been limited almost exclusively to climate-related research, energy research, and voluntary emission reduction programs to curb greenhouse gas emissions. As a result, states such as Wisconsin--as well as tribes and local governments--have taken the lead to explore solutions to the challenges posed by global warming.

Wisconsin, in particular, boasts a nationally recognized, utility funded, statewide energy efficiency program; a renewable portfolio standard; and mandatory carbon dioxide emission reporting. Governor Jim Doyle's Global Warming Task Force has recommended dozens of additional steps to further address climate change at the state level, and Wisconsin's legislature is poised to act on that package of proposals during its current session. Other states around the country are also active in adopting proposals of their own, and several regional efforts are underway, in various stages, to design and implement regional cap-and-trade programs.

With new leadership in Washington, national climate change policy appears poised to catch up with what has already been happening in states like Wisconsin. This emerging federal policy will present new challenges and opportunities for states. Because of the progress it already has made, Wisconsin is in a very good position to help inform the federal debate, and ultimately, decide for itself how best to craft state initiatives going forward in a way that complements a comprehensive and national approach to the challenge of climate change. This Article highlights some of the actions Wisconsin has taken and how we can move forward alongside a more engaged federal government in the area of climate change policy.

1. INTRODUCTION II. WISCONSIN'S POLICY RESPONSE TO CLIMATE CHANGE A. Focus on Energy: Wisconsin's Statewide Energy Efficiency Program B. Promoting Renewable Energy C. Governor's Task Force on Global Warming D. Merging Clean Energy with Economic Development & Energy Security E. Wisconsin's Role in Regional, National and International Climate Change Initiatives and Cooperative Efforts III. AN EMERGING ROLE FOR STATES IN THE FACE OF FEDERAL ACTION A. The Role of States in Designing a Federal Cap-and-Trade Program B. States Should Innovate on Complementary Policies C. States Should Play a Role in Investing Cap-and-Trade Program Revenues D. States Should Share Lessons Learned IV. CONCLUSION I. INTRODUCTION

   The challenge of climate change remains a global problem requiring a global solution. While President Obama has signaled his desire to lead on this issue, the previous administration failed to develop a comprehensive regulatory or diplomatic strategy to counteract its causes and consequences. As a result, states have for years been adopting their own climate change measures. Wisconsin has been one of those states. We have one of the most well-established and successful energy efficiency programs in the country, a renewable portfolio standard that has been on the books since 2006, and mandatory, carbon dioxide emissions reporting that has been required for over fifteen years. My Global Warming Task Force last year recommended a package of over fifty additional policy measures that garnered broad support from a variety of sectors, and I look forward to our Legislature acting on that reasonable package this year.

   Though progress at the state level is important, federal action is needed--specifically, the enactment of a nationwide, multisector cap-and-trade program. Comprehensive federal action, however, will not obviate the important role that states will play in addressing climate change. First, states must take advantage of what they have already accomplished on climate change policy to help inform the federal debate. Second, as a stronger federal climate change policy emerges, states should endeavor to craft complementary policies of their own that are narrowly tailored to the unique challenges facing different states in combating climate change and will help states transition to a new energy economy.

   Part II briefly summarizes some of the steps Wisconsin already has taken to address climate change. Part III will look at how states like Wisconsin can inform the federal debate, and what the appropriate role will be for states in crafting complementary climate change policy as a more robust federal program begins to take shape.

2. WISCONSIN'S POLICY RESPONSE TO CLIMATE CHANGE

   Wisconsin has been addressing energy and climate issues through voluntary incentive programs, mandatory requirements for electric utilities, government leading by example and groundbreaking research. Along the way, we've benefited from advice provided by concerned stakeholders and by collaborating with like-minded governments all around the world.

   1. Focus on Energy: Wisconsin's Statewide Energy Efficiency Program

      While many states are only now creating energy efficiency programs, Wisconsin began its utility-funded program, now known as Focus on Energy, a decade ago. The program has evolved over the years, and under the law which created it, public utilities in Wisconsin are now required to reinvest approximately 1.2 percent of their annual revenues into energy efficiency and renewable energy initiatives. (1) A majority of Wisconsin utilities have chosen to do so by participating in Focus on Energy. This program administers a $75 million annual budget that is used to fund energy efficiency and renewable energy projects at farms, businesses, and residences.

      As Focus on Energy has gained financial strength and continued to grow, it has also earned national recognition. The American Council for an Energy-Efficient Economy rated Wisconsin as one of the top ten states in terms of energy efficiency policies, programs and practices in its 2008 State Energy Efficiency Scorecard. This was in large part due to our Focus on Energy program, which is a three-time winner of EPA's ENERGY STAR[R] Award for Sustained Excellence. But more important than ratings and awards is the actual energy and money savings and environmental benefits that Focus on Energy has helped Wisconsin residents and business owners realize in its years of operation. In 2007 alone, Focus on Energy helped over 12,800 businesses reduce their energy consumption and generate over $22.6 million in annual energy savings. Focus on Energy also assisted 214,800 Wisconsin families in finding ways to make their homes more energy efficient, thereby saving them over $9.9 million dollars in energy costs. (2) In the midst of our nation's economic downturn, I take comfort in our experienced and established Focus on Energy program, which stands ready to help Wisconsin energy consumers continue to manage their energy costs through energy efficiency and educate them on their energy alternatives.

      While I have been pleased with the financial and energy savings Focus on Energy has helped Wisconsin residents and businesses realize in the past several years, I also challenged my government agencies to lead by example. I asked them to reduce the energy used in state buildings by at least 10 percent by 2008 and 20 percent by 2010. I have directed our Department of Administration to develop sustainable building operation guidelines for state facilities. (3) I have even asked the Department to look beyond brick and mortar to prioritize the purchase of more energy efficiency equipment for our state agencies. I am confident that by leading by example, all of us in Wisconsin can witness and measure the benefit of energy efficiency and renewable energy use in our daily lives.

   2. Promoting Renewable Energy

      Wisconsin was one of the first states to establish a mandatory renewable portfolio standard (RPS) through a 1999 law that required electric providers to obtain 2.2 percent of their electricity sales from renewable resources by 2012. In 2006, based on the recommendations of a Task Force I convened, we passed a new law raising the RPS to 10 percent renewables by the year 2015. We are on track to meet our targets. Wisconsin now has nearly 450 megawatts of installed wind power capacity, with numerous additional wind projects in the planning or construction...