close

Client Login

  • Home
  • >>
  • Delphi Blog
  • >>
  • Delphi provides insight into California’s post-election role in cap-and-trade

Delphi provides insight into California’s post-election role in cap-and-trade

The Delphi Group’s CEO, Mike Gerbis, was quoted in an October 21 story in the Calgary Herald on the challenges facing North American cap-and-trade programs in the face of California’s November 2 midterm election.

California is a partner state in the Western Climate Initiative (WCI), a group of Canadian provinces and US states committed to reducing greenhouse gas (GHG) emissions. Partner jurisdictions have dedicated themselves to reducing overall GHG emissions to 15% below 2005 levels by 2020. To contribute to this goal, WCI partners will begin implementing a cap-and-trade program in 2012. California has acted as a vanguard in climate change action, and has played a pivotal role in the program’s development due to its political leadership and significant economic capacity.

The November 2 ballot includes an initiative (Proposition 23) to halt California’s climate change legislation until state unemployment reaches less than 5.5% for four consecutive quarters (see Delphi’s previous coverage). With current unemployment over 12%, if this proposition passes, California will be forced to step down from the WCI’s program. The potential of losing the state’s political and economic support has raised questions about the long-term viability of WCI cap-and-trade. As noted in the Calgary Herald, the state’s participation provides psychological and economic support, and as the largest participating economy would act as a boon to the system’s efficiency and liquidity.

The Delphi Group’s CEO, Mike Gerbis, offers the following perspective on remaining WCI partners continuing with their cap-and-trade agenda: "It certainly will be more challenging, but I think they will move forward . . . It's always more challenging when there are fewer of you." The capacity and resolve of WCI partners committed to 2012 cap-and-trade, including British Columbia, Quebec, and Ontario, will continue with or without California, but the jurisdictions will face increased challenges if the state were forced to withdraw participation.

By Cheryl Johnson, .(JavaScript must be enabled to view this email address)