Aug. 22 (Bloomberg) -- California, four other western states and British Columbia agreed to cut greenhouse gas output to 15 percent below 2005 emission levels by 2020 to curb a forecast rise in global temperatures.

California, Washington, Oregon, Arizona and New Mexico in February announced plans to set an emissions target this year and develop a market-based system to help businesses in those states reach that goal next year. In a statement today, the states and British Columbia agreed to the cuts.

``This is the first step to create a regional process to enhance the steps each state is taking on their own,'' Tom Peterson, an adviser to the Western Climate Initiative, said today in a phone interview. ``The states can help each other address climate change in a more cost-effective way.''

Governors of the states, which account for nearly one-fifth of the U.S. population, said in February they are seeing decreased snowfall, drought and worsening fires from the impact of global warming. Utah and Canada's Manitoba have joined the group and haven't yet adopted the cuts in their plans.

Today's agreement is the latest by state governments to respond to global warming absent federal requirements under President Bush's administration. California last year passed the first state law to reduce heat-trapping gases, following regulatory efforts by New York and other northeastern states.

States to Link

``Our collective commitment will build a successful regional system to be linked with other efforts across the nation and eventually the world, California Governor Arnold Schwarzenegger said today in a separate statement.

Washington in May enacted a law to reduce emissions to 1990 levels by 2020 and to 50 percent below that by 2050. Oregon this month passed a law to cut the gasses 75% below 1990 levels by 2050.

The states plan to meet the reductions by increasing use of renewable energy sources such as wind and solar power, forcing automakers to trim tailpipe emissions, and improving efficiency of home appliances and other big electrical equipment.

The plans lays groundwork for a European-style system across the region that will limit emissions and allow businesses to buy or sell pollution credits if they exceed, or fall short, of their goals. The states want to link up to other systems, such as the northeast's Regional Greenhouse Gas Initiative, and to Europe's trading plan.

The Next Step

``The second step will be trying to encourage trading between markets and to foster the development of a national system,'' said Peterson, who also directs the Center for Climate Strategies in Harrisburg, Pennsylvania.

Massachusetts last week said it may hold auctions of greenhouse-gas permits as early as April to prepare power utilities for emissions trading and generate as much as $125 million a year to boost energy efficiency and security.

The first of 10 states in the Regional Greenhouse Gas Initiative to post draft rules for a cap-and-trade system, the state said it would hold an auction in the second quarter of next year, more than six months before the program is slated to start on Jan. 1, 2009.

To contact the reporter on this story: Christopher Martin in New York at cmartin11@bloomberg.net.

Last Updated: August 22, 2007 14:33 EDT