As the federal government looks for ideas to implement a national program that both decreases climate pollution and increases investments in clean energy solutions, it should look no further than the Northeast and our very own Regional Greenhouse Gas Initiative (RGGI).
President Obama’s new Energy Secretary, Dr. Ernest Moniz, delivered his first major policy speech this week at Columbia University’s Center on Global Energy Policy. The nation’s top official on energy matters used the opportunity to offer a full-throated defense of President Obama’s Climate Action Plan, whose multi-faceted approach aims to
· roll back harmful greenhouse gas pollution by strengthening building codes
· modernize the power grid, investing in clean energy innovation
· establish new appliance efficiency standards
· impose tough restrictions on carbon emissions from power plants – major contributors to climate change
While Secretary Moniz was making the case for reigning in emissions in the electricity sector, 140 miles to the north, officials at the New York State Department of Environmental Conservation were holding the first in a series of public hearings on proposed rules to strengthen RGGI.
RGGI is a multi-state collaborative formed to establish a regional cap on the amount of carbon pollution released by power plants throughout the region. Since the program’s launch in 2008, the Northeast has significantly outpaced the rest of the nation in per capita reductions in greenhouse gas emissions. RGGI functions as a cap-and-trade system in which generators demonstrate compliance through the purchase of allowances at auctions held quarterly. The proceeds from the auctions are directed back to the participating states and utilized, in part, for investments in energy efficiency and clean energy projects. Since its inception, RGGI has delivered approximately a half billion dollars to New York alone. The programs supported with RGGI revenues have been responsible for guiding thousands of important projects in every region of the state from concept to completion.
On June 25, 2013, President Obama issued a memorandum directing the United States Environmental Protection Agency (EPA) to establish power sector carbon pollution standards, starting with a draft rule for new power plants by September 20, 2013 and regulations for existing facilities by July of 2014. The President instructed the EPA to work with the states, as they will be responsible for implementing and enforcing the new regulations, to develop economically sound market-based initiatives to drive down carbon pollution in the power sector.
New RGGI rules, which will go into effect in January of 2014, will immediately lower the cap on carbon allowances offered through the regional auctions by 45% and place participating states on track for annual reductions through at least 2020. Lowering the cap will also very likely drive up the cost of compliance driving more funding to the states for clean energy projects and other consumer benefits.
The success of RGGI in the Northeast suggests that the establishment of a similar carbon cap-and-trade program on the federal level could provide a significant boost to the clean energy economy while providing for a uniform mechanism to reverse the impacts of climate change. The Obama administration would be wise to take advantage of our experience and advance RGGI as the national model for controlling greenhouse gas pollution from the power sector.