The WCI is an agreement between seven states and four provinces to cut greenhouse gas emissions by 15 per cent from 2005 levels by 2020. The reduction would be through a cap-and-trade program that represents a clear departure from current Canadian and American federal climate change plans. With an incoming U.S. administration signaling its readiness to take more aggressive action, some observers argue the WCI is more hot air than a plan for concrete action.

For Pamela Lacey, senior managing counsel with the American Gas Association, the WCI remains relevant even if a national framework eventually replaces the patchwork of climate change laws developing across the U.S. “We will have eventually, and I hope sooner rather than later, a uniform national law that will address what we’re doing on climate change. On the other hand, the states are working out a lot of ideas that are going into the congressional draft bills.”

As a result, her organization, which represents natural gas utilities across the country, has been busy lobbying at consultations for the WCI, which will begin capping emissions in 2012. Lacey notes the WCI is particularly relevant since no one yet knows when any federal rules would come into play.

For his part, Obama has already laid out plans to deal with what he called a lack of leadership by the U.S. federal government on climate change. While he praised state governors for taking action, he lamented the policies of U.S. President George W. Bush during a Nov. 18 Internet posting.

“That will change when I take office,” he said. “My presidency will mark a new chapter in America’s leadership on climate change that will strengthen our security and create millions of new jobs in the process. That will start with a federal cap-and-trade system. We’ll establish strong annual targets that will set us on a course to reduce emissions to their 1990 levels by 2020 and reduce them an additional 80 per cent by 2050.”

During the November Speech from the Throne the Canadian federal government laid out specific promises on what it plans to do about climate change, including a vow to have 90 per cent of the country’s electricity come from so-called low-emitting sources such as hydro, wind and nuclear power by 2020.

More controversially, the pledge included clean coal as one option for reaching that goal. The government also talked about joining the cap-and-trade system mentioned by Obama under a North American framework.

Companies in Canada have tended to have a wait-and-see, and perhaps somewhat skeptical, approach to the WCI pact between the seven western states and four provinces.

“The WCI is planning to roll itself out in 2012, which is exactly the time when the U.S. feds are likely to have their program ready to go. So, in the U.S., the federal government can simply pre-empt state programs — they don’t have this constitutional problem that we have in Canada,” says Gray Taylor, leader of the climate change and emission trading practice group at Bennett Jones LLP. He believes the WCI is largely a “political ploy” to force the federal, Alberta, and Saskatchewan governments into tougher standards.

Rick Hyndman, the senior policy adviser for climate change at the Canadian Association of Petroleum Producers, also doubts the WCI, which will allow companies that exceed their allowances to buy credits from less polluting businesses, will come together.

“It seems to us that it is extremely ambitious to try and do an allocation that applies to the wide range of jurisdictions that have signed up for the WCI," asking why a state or province that exceeds its targets would voluntarily choose to purchase credits elsewhere. He suspects the four provinces involved all believe they’ll benefit since they have significant hydro resources or, particularly in the case of Ontario, have plans to shut down coal-fired electricity plants. But for the system to work, someone has to pay. “Everybody can’t be a seller of permits under this scheme. I don’t think it’s a done deal yet.”