RGGI states agree to cut utility emissions by another 30%

Source: Arianna Skibell, E&E News reporter • Posted: Thursday, August 24, 2017

The governors of nine Northeastern and Mid-Atlantic states have committed to cut carbon emissions from power plants by an additional 30 percent through an updated cap-and-trade program.

The Regional Greenhouse Gas Initiative (RGGI), the first market-based regulatory program to reduce heat-trapping emissions, established a cap on the issuing and auctioning of tradeable allowances for carbon dioxide. Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont participate in the program.

The updated plan unveiled today would add downward cap adjustments to account for extra emission allowances and establish new tools to soak up extra allowances that aren’t sold. The move could reduce emissions by over 132 million tons by 2030. The proposed updates will go through a series of notices and comment periods before they are finalized.

Connecticut Gov. Dannel Malloy (D) praised the effort, which would lead to an overall 65 percent carbon reduction since the program began in 2009.

“Despite what deniers say, there is no doubt that climate change is real and is happening, and that the burning of fossil fuels contributes significantly to the dangers we face,” Malloy said in a statement.

“No matter the mood in Washington, Connecticut and the other RGGI states will continue moving forward with this highly effective and innovative regional initiative, and with other efforts to support energy efficiency and the deployment of clean energy systems within our borders.”

To address lower-than-expected compliance costs and allowance prices that boost the economy but don’t necessarily reduce emissions, the updated program would use a tool called an emissions containment reserve, or ECR. A team of researchers at the nonprofit Resources for the Future had proposed the mechanism, which could continue to reduce emissions even when prices are low (E&E News PM, Aug. 22).

“Today’s action demonstrates again that RGGI is a leader in [greenhouse gas] emissions regulation,” RFF researcher Anthony Paul wrote in an email. “The ECR is a path-breaking innovation in market-based environmental policy design. It brings a sharing of benefits between the environment and the economy.”

The bipartisan deal came as the Trump administration continues to roll back Obama-era climate policies like the Clean Power Plan. In the wake of this and President Trump’s professed intent to withdraw from the Paris Agreement, more states are pledging independent action. New York, California and Washington state have launched the U.S. Climate Alliance, which has since gathered support from nine other states and the territory of Puerto Rico.

And in coming months, RGGI is likely to expand its reach. New Jersey is expected to rejoin the program after a hiatus under Gov. Chris Christie (R), and Virginia Gov. Terry McAuliffe (D) has signaled interest in joining the effort as well.

The announcement brings the nine participating states closer to the conclusion of the program’s 2016 review, which has lasted over a year and included eight public meetings; more than 120 comments from experts, policymakers and organizations; and almost 30,000 personal comments.

The news has drawn accolades from across government, nonprofit and academic circles. Natural Resources Defense Council President Rhea Suh said RGGI’s “bold plan” will cut power plant emissions while creating economic benefits.

“Within the past month, California and the RGGI states have shown the world there are still climate leaders here in the U.S.,” she said in a statement. “Now we need other state, city, and federal officials to follow suit.”

Vicki Arroyo, executive director of the Georgetown Climate Center, said the proposal demonstrates continuing state leadership on climate change and clean energy.

“Today’s announcement demonstrates that despite federal rollbacks, we can expect states and communities to pursue more smart investments, more energy efficiency, more renewable energy, and more clean energy job opportunities,” Arroyo said in a statement.

“It also shows that once again northeast and mid-Atlantic states are stepping up at a time when our country so desperately needs real leadership on pollution, energy, and climate issues.”

RGGI states will now seek stakeholder comment on the draft program. A public meeting is scheduled for Sept. 25.