Bottom-up policy lessons emerging from the Western Climate Initiative's development challenges

Cap-and-trade has become a key climate policy strategy, in part due to concerns about the political feasibility of carbon taxes. However, federal cap-and-trade legislation remains elusive within North America, and it is increasingly likely that a global carbon market will be composed of a patchwork of regional bottom-up schemes. The challenges faced by the Western Climate Initiative (WCI), the most comprehensive GHG trading system currently being developed in North America, are examined. The WCI has had mixed success and several lessons concerning the political and technical requirements for bottom-up, regional GHG trading are offered. Although substantial administrative progress has been achieved, only two of its original eleven partners will be ready for trading in 2013. Creating a carbon market is more than a technical or political challenge - it is a social process. The WCI experience highlights the importance of the logic of collective action, the need for jurisdictions to see individual benefits, the role of evidence from other policy contexts, and the need for broad agreement about the purpose of policy. These factors can significantly shape the chances of survival for the carbon market even before actual trading begins. Policy relevance An analysis is provided of the political and administrative challenges facing the creation of the Western Climate Initiative, the largest multi-jurisdictional sub-national North American GHG cap and trade system initiated to date. Policy factors for both the coalescence and partial disintegration of the system are discussed for all 11 original partner jurisdictions. Key lessons are highlighted for policy and strategy that may be of use in other bottom-up initiatives of this type: acknowledging the multi-level governance aspects of climate policy (including the need for jurisdictions to see individual benefits), paying attention to the dynamics of collective action, the centrality of broader political and economic discourse in defining interpretations of the opportunities and costs of cap-and-trade, and the need for broad agreement about policy purpose.