The new Western regional plan to cap and trade greenhouse gas emissions faces a tough road in state legislatures where the details must be worked out and attracting investment in new technologies to offset emissions during tough economic times.

GRANTS PASS — The new Western regional plan to cap and trade greenhouse gas emissions faces a tough road in state legislatures where the details must be worked out and attracting investment in new technologies to offset emissions during tough economic times.

The leading issue for states will be just how many of the emissions permits will be sold to utilities, manufacturers and oil companies, and how many will be handed out free of charge to get the ball rolling, observers said.

There is also going to be wrangling over just what sorts of offsets for CO2 emissions really work and will be permitted to be traded.

The timber industry, for example, feels that cutting trees for lumber then planting new trees is more effective than letting old growth forests stand.

But a scientific review of 500 research plots around the world published in the journal Nature found leaving old growth forests standing stored more carbon.

"The extra challenge now — besides getting the allocations right, dealing with the offset issues, dealing with complex regulatory issues — I think will be finding the dollars to stimulate the innovation needed," said Bob Dopelt, executive director of the University of Oregon's Climate Leadership Initiative.

The Western Climate Initiative would establish a regional market to trade carbon emissions credits and is designed to keep costs down for those affected. Seven Western states and four Canadian provinces on Tuesday proposed the program to cut greenhouse gas emissions from power plants, manufacturers and vehicles.

Oregon Gov. Ted Kulongoski has suggested a minimum of 10 percent of the emissions allocations be auctioned, but environmental groups would like 100 percent, and industry generally doesn't want any.

Jeremiah Baumann, a program director for Environment Oregon, said the allocations amount to currency worth billions of dollars, and it is not fair to taxpayers to hand them out for free.

But lobbyist Erica Hagedorn said CO2 emitters she represents are afraid the costs are too high for not enough return, especially in Oregon, where so much of the electricity is produced by carbon-free hydroelectric power, and little comes from burning coal, a major CO2 source.

Though there is support for cap and trade in the Oregon Legislature, particularly among controlling Democrats, there will be a tough fight over the details, said Rep. Jackie Dingfelder, D-Portland, chairwoman of the House Energy and Environment Committee.

She said the goal is to allocate the costs in a fair way.

Utilities in Oregon and Washington, though generally supportive of combating global warming, are concerned that allocations will be fair, so ratepayers don't suffer.

In the Washington Legislature, Rep. Hans Dunshee, D-Snohomish, said he believed the costs of doing nothing were greater than the cap and trade program, but there was still a lot of opposition from business.

Not all states have figured out how to deal with the details.

New Mexico Gov. Bill Richardson said he will appoint a panel to make recommendations, some of which may need legislation.

"We realize, here in the West, that we cannot wait for the federal government to get off its hands," he said.