The Partner jurisdictions of the Western Climate Initiative (WCI) have released an updated economic analysis confirming that its regional plan to reduce greenhouse emissions (GHG) is both environmentally achievable and economically positive. The economic analysis indicates that the WCI Partner jurisdictions can achieve the goal of reducing emissions to 15 percent below 2005 levels by 2020—and realize net cost savings of approximately US$100 billion between 2012 and 2020.

• The WCI Partner jurisdictions can meet their 2020 regional emissions reduction goal while realizing modest net cost savings.
• Policies implemented in conjunction with cap-and-trade, such as energy efficiency and clean car standards, have the potential to significantly reduce emissions and contain costs.
• Carbon allowance banking and offsets are important design elements for achieving emissions reductions and limiting costs.
• Higher-than-expected fuel prices would make it less costly to achieve the emissions reduction goal and would lower the allowance prices. Conversely, lower-than-expected fuel prices, coupled with a faster economic recovery, would raise the allowance price.

The report updates a 2008 economic analysis and incorporates new data reflecting expanded WCI membership (to include Manitoba, Québec, and Ontario), the 2008—2009 economic recession, and various economic model improvements identified after extensive consultation with stakeholders

The updated economic analysis considered a range of scenarios with varying assumptions about future economic growth, fuel prices, and other factors. In each instance, the analysis showed that the WCI program would deliver net cost savings—even when the assumptions resulted in different carbon allowance prices. These findings are similar to the results of other recent economic analyses.

Links to the Report and Supporting Materials

• Updated Economic Analysis of the WCI Regional Cap-and-Trade Program
• July 7, 2010 Release Statement
• Highlights of the Analysis
• Updated ENERGY 2020 Model Inputs and Assumptions

Stakeholder Call

The WCI Economic Modeling Team will hold a stakeholder conference call to present the analysis and results on Tuesday, July 13 from 10:00 am to 11:00 am Pacific.  To join the call dial 1-800-868-1837 and enter participant code 659537#.  A PowerPoint presentation is available here.