CORRECTED-California and Mexico sign pact to fight climate change

Mon Jul 28, 2014 5:40pm EDT
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(In paragraph 7, please read that Mexican lawmakers implemented a carbon tax last year, not "are considering implementing" a carbon tax)

By Rory Carroll

SAN FRANCISCO, July 28 (Reuters) - California Governor Jerry Brown and Mexican environmental officials signed a pact on Monday aimed at reducing greenhouse gas emissions, an agreement that could eventually expand the market for carbon credits.

The six-page memorandum of understanding calls for cooperation in developing carbon pricing systems and calls on the partners to explore ways to align those systems in the future.

"California can't do it alone and with this new partnership with Mexico, we can make real progress on reducing dangerous greenhouse gases," said Governor Brown.

California operates a carbon cap-and-trade system, which sets a hard limit on the carbon output from large businesses and requires them to either reduce emissions or purchase credits to meet the target. The state is on track to meet its goal of 1990 emissions levels by 2020.

California plans to link its nearly two-year-old market with a similar effort in the Canadian province of Quebec, but officials are eager to expand its reach further to keep carbon prices stable and enhance the program's environmental impact.

Mexico is the world's 11th largest emitter of greenhouse gases, with electricity generation accounting for the largest share of output, followed by transportation and industry.

In June 2012, then-President Felipe Calderon signed into law a goal to cut Mexico's emissions 30 percent by 2020 from projected business-as-usual levels. Lawmakers last year implemented a modest carbon tax to help achieve the goal.   Continued...