Proposed program changes to the Regional Greenhouse Gas Initiative (RGGI) would see the nine Northeast and Mid-Atlantic states commit to reducing “carbon emissions by an additional 30 percent in the ten years following the program’s current 2020 target” according to the Conservation Law Foundation (CLF). RGGI is the nation’s first market-based cap-and-trade program.
The program changes were immediately endorsed by Rhode Island Governor Gina Raimondo.
“It’s more important than ever that states take control of their future,” said Raimondo in a statement, “President Trump put states like Rhode Island in harm’s way when he pulled the United States out of the Paris Accord, leaving us on our own to address the realities of a changing climate. So we need to take our own steps to build a green and renewable future.”
Said CLF attorney Phelps Turner, “With the Trump Administration making every effort to turn back the clock on environmental progress, it falls to state and regional collaboration to lead the way in protecting public health and defending clean air and water. For nearly a decade, RGGI has been a sterling example of the positive impact such collaboration can have on both the environment and the economy, and today’s new commitments represent a significant contribution to our work to leave a cleaner and safer home for future generations.”
The successful program was under review when President Donald Trump announced the United States’ withdrawn from the Paris Climate Accords. RGGI was launched in 2009. According to CLF, the “program has reduced emissions from the power sector by 45 percent and saved consumers $618 million on their energy bills. It has also created thousands of jobs along with more than $2.9 billion in regional economic growth. What’s more, by reducing emissions, it has prevented more than 8,000 asthma attacks, 39,000 lost work days, and 300 premature deaths.”
The proposed improvements include:
- A regional cap of 75,147,784 tons of CO2 in 2021, which will decline by 2.275 million tons of CO2 per year thereafter, resulting in a total 30 percent reduction in the regional cap from 2020 to 2030.
- Additional adjustments to the RGGI cap, to account for the full bank of excess allowances at the end of 2020. The amount of this adjustment will be calculated in 2021 according to a formula to be established in the revised Model Rule, and it will be implemented over the period from 2021-2025.
- Modifications to the Cost Containment Reserve (CCR) size and trigger price. The proposed CCR size from 2021 onwards will be 10 percent of the regional cap. The CCR trigger price will be $13 in 2021, and rise at 7 percent per year, ensuring that the CCR will only trigger if emission reduction costs are higher than projected
- Implementation of an Emissions Containment Reserve (ECR) in 2021, wherein states will withhold allowances from circulation to secure additional emission reductions if prices fall below established trigger prices. The states implementing the ECR will withhold up to 10 percent of the allowances in their base budgets per year. At this time, Maine and New Hampshire do not intend to implement an ECR. Allowances withheld in this way will not be re-offered for sale. The ECR trigger price will be $6 in 2021, and rise at 7 percent per year, so that the ECR will only trigger if emission reduction costs are lower than projected.
What was announced yesterday was a proposal. The RGGI states will seek stakeholder comment on the draft program elements in a public meeting to be held on September 25th in Baltimore MD. State -specific meetings will be added as needed.