States begin cap-and-trade of their own

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STEVE CHIOTAKIS: Since there’s no national cap-and-trade system for greenhouse gases, some states are doing their own. Minnesota will start requiring utilities to weigh the cost of carbon when deciding where to get their energy. And that could hurt out-of-state coal-fired power plants. Here’s Marketplace’s Nancy Marshall Genzer.

NANCY MARSHALL GENZER: Minnesota wants to discourage its utilities from building coal-fired power plants, or buying power from coal-fired plants in other states like North Dakota.

Minnesota has calculated the cost of any future fees on carbon at up to $34 per ton. Minnesota utilities have to get state permission when they want to build a new power plant or import energy. Starting in 2012, they’ll have to include the cost of carbon in their applications.

Beth Goodpaster is a staff attorney with the Minnesota Center for Environmental Advocacy.

BETH GOODPASTER: We know that carbon regulation is coming. We don’t know exactly the form of it, we don’t know exactly the price tag, so let’s analyze a few different scenarios.

North Dakota says Minnesota is violating the U.S. Constitution, which says states can’t regulate each other’s businesses. California came up against the same argument when it was formulating a new carbon tax. Out-of-state power plants said they were being discriminated against.

Bill Becker heads the National Association of Clean Air Agencies. He says Congress could head-off the interstate squabbling with a national cap-and-trade system.

BILL BECKER: Until Congress takes action, what we’re left with is states and localities throughout the country having to take matters into their own hands.

Even if that offends their neighbors.

In Washington, I’m Nancy Marshall Genzer for Marketplace.