Midwest Governors Sign Greenhouse Gas Accord

Nine members of the Midwestern Governors Association (MGA) have signed the Midwestern Regional Greenhouse Gas Reduction Accord, an agreement that calls for greenhouse gas reduction targets and the development of a market-based carbon cap-and-trade system. Wisconsin Governor — and MGA Chairman — Jim Doyle said that with this accord, the Midwest is set to “become the Saudi Arabia of renewable energy.”

The agreement calls for support of the “rapidly growing wind energy, corn ethanol and biodiesel industries,” and for recognition of the “potential for robust cellulosic biomass and solar industries.” It doesn’t assign definite public funds to any of these sectors, leaving that up to individual states. However, it’s very clear that the region as a whole must work together to build and improve its energy and carbon capturing infrastructure, an undertaking that will take significant public investment.

The accord is part of the MGA’s Energy Security and Climate Stewardship Platform, which recognizes the threat of global warming and the obligation of political leaders to transition to a lower carbon energy economy. It looks to act upon the recognized threats, as well as the subsequent opportunities.

Signed by governors of nine of the 11 member states of the MGA, as well as the premier of the Canadian province of Manitoba, the accord creates a consortium in the Midwest similar to the Regional Greenhouse Gas Initiative in the East and the Western Regional Climate Action Initiative. Notably, however, the MGA agreement does not set any definite numbers or targets but rather mandates that the signing parties will work together to establish them, as well as to develop a monitoring system. And while citing the success of the Midwest’s own Chicago Climate Exchange, the agreement doesn’t stipulate exactly how the proposed cap-and-trade system would be run, but does resolve to complete its development within a year.

Midwestern energy companies and entrepreneurs can be almost certain that more electricity will be coming from non-fossil fuel sources and that more money will be put into developing carbon sequestration systems. With an eye to the region’s corn and farmers, corn ethanol and biodiesel figure prominently in the accord. Corn-based biofuels have been heavily criticized as large federal subsidies prop up the economics and ignore the overall energy inefficiencies. With both the Energy and Farm Bills being rehashed in Congress, it seems inevitable that the economics and carbon costs of corn biofuels will at some point catch up with the Midwest’s biggest crop.

The Midwest accord paves the way for large public investment from state governments as the signatory states move to put into action the intentions they have outlined. More importantly, the Midwest, in forming their own coalition similar to those in the east and west, puts further pressure on the federal government to match the states’ efforts to fight global warming and develop domestic clean technologies.