Crossroads for NY Climate Policy

The Regional Greenhouse Gas Initiative, commonly referred to as RGGI, is at a crossroads. The multi-state collaborative in the Northeast and Mid-Atlantic, designed to cap the amount of climate pollution produced by power plants throughout the region, has big decisions to make, and policymakers across the country are paying close attention. Before we get into the details, let’s start with a brief overview of how RGGI works.

Under RGGI, power plants in the nine RGGI states – Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont – have to purchase allowances for each ton of carbon dioxide they release into the atmosphere. The supply of those allowances is capped, and allowances are sold at quarterly auctions. The proceeds from those auctions are then distributed to the RGGI states with an understanding that at least a portion of those funds will be used to drive down climate pollution even further through investments in energy efficiency, renewables, and other carbon abatement programs, which create jobs and protect the environment in communities from Buffalo to Brooklyn, and everywhere in-between. RGGI has raised nearly $1 billion over the life of the program in New York alone.

Now back to the decisions and why they are important, not just for New York and our RGGI partners, but for states across the nation. RGGI is largely viewed as a model for compliance with the EPA’s Clean Power Plan, which aims to reduce climate pollution from power plants nationwide through the year 2030. The Clean Power Plan is currently on hold while legal challenges work their way through the courts. When the Clean Power Plan is allowed to go forward, many states will be looking to RGGI to help them figure out how to comply with the federal requirements.

For the better part of the last year, RGGI states have been conducting a review to determine: what is working well in the program; what areas need improvements; and how to extend the program from 2020 to 2030 so it can be consistent with the Clean Power Plan. The states conducted a similar review back in 2012. That process, thanks to the leadership of New York and partner states like Massachusetts and Connecticut and the advocacy of Environmental Advocates and our coalition partners throughout the region, resulted in a 45-percent reduction in the carbon pollution cap with annual reductions of 2.5-percent each year through 2020.

We have now reached a point in the 2016 review process where negotiations are happening among the RGGI states that will have serious climate policy ramifications through 2030 and beyond. One of the biggest decisions the states will have to make centers around the cap on carbon pollution: will it continue to decline on an annual basis, and if so, by how much?

In New York, we have a State Energy Plan directive to reduce climate pollution, economy-wide, by 40-percent of 1990 levels by 2030 and 80-percent by 2050 – the equivalent of a complete phase out of the use of fossil fuels for power generation, heating, and transportation in the next 34 years. Just think about what that means for a minute – no more gas stations or dirty fossil fuel-burning power plants! The other RGGI states have similar commitments.

Earlier this month, New York approved the Clean Energy Standard, mandating that half of all electricity consumed in this state will come from renewable sources by the year 2030. The renewable energy mandate will play a significant role in New York’s climate policy, but it is only part of the equation. In order to meet the state’s economy-wide climate pollution reduction goals, the cap on power sector carbon pollution must be ratcheted down at an aggressive pace. Research and modeling show that, even with successful implementation of the Clean Energy Standard, the cap on climate pollution from power plants must decrease by 5-percent each year, which is twice the current standard.

This is where leadership from Governor Cuomo and his team will be critical. Earlier this week, Environmental Advocates of New York sent a letter to Public Service Commission Chair Audrey Zibelman and Department of Environmental Conservation Commissioner Basil Seggos, the leaders of the two agencies representing New York in the RGGI negotiations. We are urging them to press their RGGI counterparts to agree to a region-wide carbon pollution cap that will enable us to reach our climate goals. Since RGGI’s inception, ten years ago this month, New York has played a huge role at crucial junctures in shaping the program’s success. Governor Cuomo has the opportunity to lead on climate action once again by setting a model for the nation to follow.