A coalition of seven U.S. States and four Canadian provinces unveiled a proposal Wednesday for establishing a carbon cap-and-trade program by 2012.

The proposal by the group, the Western Climate Initiative, aims to limit the greenhouse gas emissions that businesses and industries produce by setting up a system for trading of emission allowances. The group's goal is to cut greenhouse gas emissions to 15 percent below the 2005 levels by 2020.

The move is expected to promote green technologies. Businesses could lessen their emissions by putting in solar or wind power generation technologies. Companies that couldn’t lower their pollution level could buy credits from those that could.

The cap-and trade system will begin by regulating industrial facilities such as power plants that emit 25,000 metric tons of greenhouse gases or more annually.

Emissions from the use of biofuels are exempt.

The Western Climate Initiative was founded by a group of governors last year to develop programs for reducing greenhouse gases, which contribute to climate change. California, Montana, New Mexico, Arizona, Utah, Oregon and Washington as well as the Canadian provinces of Ontario, Columbia, Quebec and Manitoba are members of the group.

The proposal would help California meet the goals set by the California Global Warming Solutions Act of 2006, which requires the state to cut emissions to the 1990 levels by 2020.

In June, Californian regulators released a proposal outlining how the state would reach its goals. The plan stated that the cap-and-trade program being designed by the Western Climate Initiative would play a key role (see California Offers Plan to Clear the Air).

The Western Climate Initiative still has to work out details of the program, including how its members would divvy up carbon credits.

The draft plan has drawn criticism from an environmental group, Environment California, which said the proposal could make it easy for companies to continue to pollute the air by buying credits. The proposal should include provisions that require companies to reduce emissions as well, the group’s spokesman told the San Francisco Chronicle.

The public will be able to comment on the proposal at an August 13 workshop in San Diego.