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Steve Chiotakis: Legislation to use market forces to reduce carbon emissions is stuck in Congress. But some states are already out in front with their own market-based programs. And with the economy in the dumps, they have even more reason to rev it up. Ashley Milne-Tyte reports.

Ashley Milne-Tyte: Ten states in the Northeast have already banded together to form a regional cap and trade program. They've set a limit or cap on total carbon emissions from power plants. The plants can then buy and sell permits allowing them to release greenhouse gases.

The idea is that plants that reduce their emissions quickly can sell their permits to those that can't cut emissions as fast. The permits are sold at auction and the individual states get the money.

Terry Tamminen of Seventh Generation Advisors says for some states, that money couldn't come at a better time.

Terry Tamminen: So in the case of New York as an example, they, of the recent auctions, were able to get about $200 million, and Governor Patterson carved off about $90 million of that to help balance his state budget.

Other states could start to see similar income. Two groups of states in the West and Midwest are trying to ramp up their own cap and trade programs.

Barry Rabe teaches public policy at the University of Michigan. He says these regional efforts could eventually form one big carbon market.

Barry Rabe: And in fact there has been pretty active conversation, even to the point of shuttle diplomacy, between some of these states and regional leaders.

And it's not just U.S. states eager to take part. He says some Canadian provinces and Mexicans states are involved in the talks as well.

I'm Ashley Milne-Tyte for Marketplace.