updated 9/23/2008 4:33:52 PM ET 2008-09-23T20:33:52

Seven western states and four Canadian provinces on Tuesday proposed a comprehensive program to cut greenhouse gas emissions from power plants, manufacturers and vehicles.

The Western Climate Initiative would establish a regional market to trade carbon emissions credits and is designed to keep down costs for those affected. It covers more polluters than other regional plans adopted in the United States, Canada and Europe.

“We’re sending a strong message to our federal governments that states and provinces are moving forward in the absence of federal action, and we’re setting the stage for national programs that are just as aggressive,” Gov. Arnold Schwarzenegger said in a statement.

The plan is aimed at cutting the region’s carbon emissions below 2005 levels by 2020, a roughly 15 percent reduction.

The idea is to allow industries that emit greenhouse gases to buy and sell credits for their emissions. Businesses that cannot cut their emissions enough can buy the right to pollute from cleaner companies.

The plan was drafted by Arizona, California, Montana, New Mexico, Oregon, Utah, and Washington, and by the Canadian provinces of British Columbia, Manitoba, Ontario and Quebec.

Whether lawmakers in each state will now adopt the regulations is unclear. In Utah, for example, legislative leaders fear the state’s businesses would be put at a disadvantage in a global economy.

“We want to make certain we do not unnecessarily harm Utah businesses,” Senate President Jon Valentine, a Republican, said. “You can end up with such an aggressive approach that it hurts businesses in Utah and makes us not competitive.”

Most large industrial polluters, automakers and coal-based utilities are lobbying state legislatures to wait for a uniform federal program. Congress failed this year to enact global warming legislation — adding to the push for a regional program.

“Doing nothing is going to cost us a whole lot more in the future,” Washington Gov. Chris Gregoire told reporters in a conference call.

Oregon Gov. Ted Kulongoski called the framework “a solid starting point” that would help the state meet its goals.

While environmental groups generally support the proposal, they said it might allow states to be too easy on industry if they impose only the minimal benchmarks — setting the stage for state-by-state campaigns to strengthen the rules.

“It basically would amount to a giant handout to polluters unless the states take further action,” said Bernadette Del Chiaro, director of the clean energy program at Environment California.

California air regulators said the program would combat global warming in the most cost-effective manner, spur green technologies, clean up the region’s energy supplies and reduce dependence on foreign oil.

The idea is to allow industries that emit greenhouse gases to buy and sell credits for their emissions. Businesses that cannot cut their emissions enough can buy the right to pollute from cleaner companies.

They could also invest in so-called offset projects — such as planting trees — to achieve up to 49 percent of their emission reductions, a controversial strategy that environmentalists say would let polluters off the hook for cutting their own emissions.

The proposal by the western states is much broader than a new carbon market being launched this week by 10 northeast states. The Regional Greenhouse Gas Initiative caps emissions from power plants.

Under the plan released by the Western Climate Initiative, utilities and industries could begin trading emission credits on Jan. 1, 2012, and transportation and heating fuels would have until 2015.

Each state would decide how to distribute emission credits — selling at least 10 percent to polluters through an auction and possibly giving away the rest for free at the beginning of the program.

If fully implemented by all states and provinces, the market would cover nearly 90 percent of the region’s emission reductions, according to the California Environmental Protection Agency.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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