Va. moves closer to joining regional climate program

Source: Benjamin Storrow, E&E News reporter • Posted: Wednesday, September 27, 2017

BALTIMORE — Conversations between Virginia and the Regional Greenhouse Gas Initiative are “beyond the introductory phase,” the director of the commonwealth’s air quality division said yesterday.

The statement comes amid a flurry of state climate action. Virginia Gov. Terry McAuliffe (D) issued an executive order in May directing state regulators to explore potential partnerships with existing cap-and-trade programs (Climatewire, May 17).

The ink on McAuliffe’s order had barely dried before RGGI, a cap-and-trade program encompassing nine Northeastern states, announced a proposal last month to cut greenhouse gas emissions by 30 percent between 2021 and 2030 (Climatewire, Aug. 24).

Virginia could now join the RGGI fold, with state officials focused on how to link the commonwealth with the compact’s carbon-cutting regimen.

“We would attempt to follow the RGGI rule, the new RGGI rule, as closely as possible,” Mike Dowd, director of the Virginia Department of Environmental Quality’s Air Division, said in an interview yesterday on the sidelines of a RGGI meeting here. “Obviously we don’t want to go forward with a rule that RGGI says is dead on arrival. So before we go ahead with our rule, we want to make sure we’ve crossed our T’s, dotted our I’s with RGGI, make sure everyone is cool with the rule, what we’re doing, things like that.”

Virginia’s addition to RGGI’s ranks would represent a major victory for the greens (Climatewire, July 10). The commonwealth’s annual emissions are nearly equal to RGGI’s largest emitter, New York. It would also be the first RGGI state with a significant coal mining industry.

But several hurdles remain before Virginia can join the carbon-cutting compact. RGGI’s existing members auction off a set number of carbon allowances and use the proceeds on energy efficiency measures and other programs. But conducting an auction would require approval of Virginia’s Republican-led Legislature, which is unlikely to look kindly on a proposed carbon-cutting partnership.

So Virginia officials are instead looking at how to link to RGGI by allocating carbon allowances.

“We’re talking about allocations, we’re thinking about set-asides, we’re thinking about where the cap will start. Those are the discussions now that we’re having,” Dowd said.

An even bigger hurdle is the outcome of this fall’s gubernatorial election. Lt. Gov. Ralph Northam, a Democrat, has pledged to uphold McAuliffe’s order. A poll released yesterday by the Wason Center for Public Policy at Christopher Newport University gave Northam a 6-point lead over Republican Ed Gillespie, who has called the order a “job-killing” regulation.

The election takes place against the backdrop of mounting state climate action. RGGI’s carbon cap had been scheduled to stop declining in 2020. The proposal unveiled in August calls on setting a cap of 75 million tons in 2021, which would then decline by 3 percent annually through 2030. It also would readjust the number of carbon allowances power plant owners can hold in reserve and withhold allowances when compliance costs fall below projected levels.

Each of RGGI’s nine members now must approve the tightened cap, a process that could take up to a year.

Virginia is not the only state looking to join RGGI. Expansion prospects loomed over the meeting yesterday in Baltimore, where compact officials gathered to discuss the proposed tightening of the region’s carbon cap.

At one point, a New Jersey official listening to the meeting online asked a question about how RGGI proceeds are spent. The Republican and Democratic candidates running to succeed Gov. Chris Christie (R) in this fall’s gubernatorial election have pledged to rejoin the program.

Later, another questioner asked if New Jersey officials had been in contact with RGGI.

“We’re aware of the political statements that have been made by candidates running for governor,” said Lois New, a RGGI representative and acting director of the New York State Department of Environmental Conservation’s Office of Climate Change. “That’s as far as it’s gone. They haven’t approached us.”

Conversations with Virginia are more advanced. Virginia officials have said they want to release a proposal for linking with RGGI by November. The speed of those conversations was evident yesterday.

In opening remarks to the gathering, Maryland Secretary of the Environment Ben Grumbles praised RGGI’s reforms while acknowledging the presence of Virginia officials in the crowd.

“It is truly a strengthening of the RGGI program, and we think it’s also going to lead to a broadening of this program,” he said.