How will emissions allowances be distributed under the WCI agreement?
Each WCI Partner jurisdiction will have an emission allowance budget under the cap-and-trade program that is consistent with its jurisdiction-specific emissions goal for 2020. Each Partner has the flexibility to decide how best to allocate its allowance budget within its jurisdiction. For instance, a Partner could “give” allowances to the emitters operating within its jurisdiction, “auction” the allowances to willing buyers, or provide for some combination of the two. The WCI design calls for a minimum auction level of 10% at the start of the program, increasing to at least 25% by 2020. Each jurisdiction may auction a higher percentage if it so chooses. In addition, the WCI Partners have agreed to use a portion of the allowance value for purposes with region-wide benefits, such as energy efficiency and low-carbon technology development. The WCI has established the Cap Setting and Allowance Distribution Committee. to recommend methodologies for establishing the regional WCI GHG emission
