Look to RGGI for GHG-Curbing Model, States Urge EPA

Nine Northeastern and Mid-Atlantic states on Monday urged the Environmental Protection Agency (EPA) to model state programs to reduce carbon dioxide emissions from power plants on the Regional Greenhouse Gas Initiative (RGGI), the market-based cap-and-trade regulatory program in which the states participate. 

The EPA should recognize the RGGI model as an “effective system” of emission reduction for GHG emissions from the power sector because it is a proven model, it is cost-effective, and it aligns with the regional nature of the electricity grid while fostering regional cooperation, the RGGI states said in comments submitted to the federal agency on Monday.

RGGI, the nation’s first regional mandatory carbon emissions reduction program, is composed of individual carbon dioxide budget trading programs that are based on each participating state’s legal authority. Under RGGI, a regulated power plant in participant states—including Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont—must hold carbon dioxide allowances that are equal to its emissions to demonstrate compliance for each three-year control period. RGGI’s second control period began in January 2012 and extends through December 2014.

The states have, meanwhile, capped power sector carbon dioxide emissions at 165 million short tons for 2013 but are seeking to reduce the regional cap to 91 million tons in 2014. The cap will thereafter be reduced by an additional 2.5% each year to 78 million tons in 2020.

RGGI states say they have effectively slashed power sector carbon dioxide emissions by about 40% since 2005 (from 162.5 million tons to 92 million tons in 2012)—substantially more than the 17% reduction target set by President Obama this June in his Climate Action Plan. Most of this reduction is due to “successful energy efficiency programs” and “better utilization of a cleaner power system” that has seen the overall carbon dioxide emission rate of the fossil fuel–fired power sector in RGGI decline from 1,694 pounds/MWh to 1,393 pounds/MWh (1,026 pounds/MWh to 841 pounds/MWh, including zero emission sources), the states said.

“Thus, in the 15 years between 2005 and 2020, the RGGI states will have achieved a 39% reduction in the emission rate from fossil fuel-fired power plants and a 45% reduction in the emission rate of the entire power sector,” the states said in their comments. “This reduction in the emission intensity of electricity generation in the RGGI states is due in part to the ramping up of renewable energy sources, pursuant to state renewable portfolio standards that provide for steep increases in the percentage of renewable energy sold in each state.”

The states’ investment of auction proceeds from just the first three years of the program (2009–2011) has also reduced energy bills by more than $1 billion and added a net of $1.6 billion to the economies of the RGGI states, the states also said, citing an independent study completed by the Analysis Group.

Significantly, the states urged the EPA to ensure that all states have a common target to reach, even if some states are given more time to reach that target. The agency should allow states “maximum flexibility” in reaching a common target by allowing them to use a mass-based system of compliance, to demonstrate compliance on a regional basis, and to demonstrate compliance on a multi-year basis. The EPA should also ensure that state plans are enforceable and that GHG reductions are verifiable, the states said.

“RGGI demonstrates that market-based programs work and provides EPA with a scalable ‘plug-and-play’ model that can achieve significant emission reductions at a fraction of the cost of many other approaches,” said Collin O’Mara, Secretary of the Delaware Department of Natural Resources and Environmental Control. “RGGI meets the definition of a ‘best system of emission reduction’ and we look forward to working with other states to build upon our region’s success in reducing emissions, reducing energy bills, and supporting job creation.”

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)

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