Climate Change and Reducing Greenhouse Gas Emissions: RGGI States Announce Proposed Program Changes; Additional 30% Emissions Cap Decline by 2030

Proposed RGGI Program Improvements

The proposed changes outlined today build upon RGGI’s success and strengthen the program moving forward. They draw on past experience, ongoing trends, modeling results, economic analyses, and stakeholder and expert commentary.

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% 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% of the regional cap. The CCR trigger price will be $13.00 in 2021, and rise at 7% 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% 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 reoffered for sale. The ECR trigger price will be $6.00 in 2021, and rise at 7% per year, so that the ECR will only trigger if emission reduction costs are lower than projected.

RGGI’s Track Record of Success

Through RGGI's implementation and through complementary state policies, the RGGI states have shown that economic benefits, consumer savings, public health improvements, and greenhouse gas emissions reductions can go hand-in-hand.

 Reducing emissions: The RGGI states have already significantly reduced power sector carbon emissions, cutting them almost in half. The 2030 cap proposed today will be more than 65% lower than RGGI’s 2009 starting cap, continuing the participating states’ progress in reducing greenhouse gas emissions.

 Auctioning and reinvestment: RGGI's auctioning of allowances has especially been praised as an innovative program design element. These quarterly regional auctions have generated more than $2.7 billion in proceeds for reinvestment in strategic programs to benefit consumers and build a stronger and cleaner energy system in the RGGI states.

 Economic benefits: Independent reports by the Analysis Group have found that RGGI is generating billions of dollars in net economic benefit and tens of thousands of job years. Investments funded through RGGI proceeds improve the cost-effectiveness and reliability of the grid by reducing peak demand, which in turn lowers wholesale power prices and helps avoid the need for costly infrastructure investments.

 Health benefits: Other studies, such as a recent independent report by Abt Associates, have found that RGGI has generated public health benefits which have saved hundreds of lives, prevented thousands of asthma attacks, and saved $5.7 billion in health-related economic costs.

 Regular, comprehensive program review: Finally, the program review process itself has been a highly successful and important program element. As part of the previous program review (much of which took place in 2012), changes were implemented which strengthened and improved RGGI's market-based system. At that time, the RGGI states committed to regular, comprehensive evaluation and improvement, and to begin the next review no later than 2016. The RGGI states have kept that commitment, and have emerged with a proposal for a stronger program which will ensure additional emission reductions out to the year 2030. The RGGI states intend to initiate another program review in 2021 to evaluate the performance of the program changes being proposed today.

Statements from RGGI State Agency Heads

"With today’s announcement, the RGGI states are demonstrating our commitment to a strengthened RGGI program that will utilize innovative new mechanisms to secure significant carbon reductions at a reasonable price on into the next decade, working in concert with our competitive energy markets and reliability goals," said Katie Dykes, Chair of the Connecticut Public Utilities Regulatory Authority and Chair of the RGGI, Inc. Board of Directors. "I am grateful to the hundreds of stakeholders who have provided insightful comments and feedback to us throughout our review process. As a charter member of the nation's first market-based carbon emission reduction program, Connecticut is proud to join with our sister states in taking this critical next step forward which will keep Connecticut on track to meet our ambitious carbon reduction targets, while helping families and businesses in our state invest in renewables and energy efficiency."

Pages: 1 · 2 · 3 · 4

Health, Fitness and Style, News and Issues, Health and Science, Issues, Government, Senior Women Web, Articles, Sightings, What's New Add comments

Climate Change and Reducing Greenhouse Gas Emissions: RGGI States Announce Proposed Program Changes; Additional 30% Emissions Cap Decline by 2030

RGGI’s Track Record of Success

More Articles