On June 8, 2009, the Advisory Group of the Midwestern Greenhouse Gas Reduction Accord (Midwestern Accord) released its recommendations for a regional economy-wide cap-and-trade program. The recommendations call for an economy-wide cap-and-trade program that would cover electricity, industrial sources, along with residential, commercial, and transportation fuels. By 2020, the program would aim to reduce greenhouse gas emissions from these sectors 20 percent 2005 levels and by 2050 to 80 percent below 2005 levels. The Advisory Groups includes several cost containment mechanisms such as an allowance reserve, limited borrowing, and allowing entities to cover up to 20 percent of their compliance obligation using offsets. While allowance distribution specifics would be left to individual jurisdictions, the Advisory Group recommends that allowance value be used for the following purposes: accelerating transformational investment, mitigating transitional adverse impacts of the program, and addressing harmful impacts due to climate change.

These recommendations have not been approved by the governors of the Midwestern Accord sates. Once the governors have reviewed and responded to the recommendations, the Accord will determine how to proceed at the regional level and what positions to endorse in a potential federal program.

To view the recommendations, click here.