| September 25, 2008 |  |
Northeast States’ Auction Sets Precedent For Nation, Science Group Says
Group Urges Other State Compacts, Federal Government, To Take Notice
CAMBRIDGE, Mass. (September 25, 2008) – The Regional Greenhouse Gas Initiative (RGGI), a partnership among 10 Northeastern states, today will conduct the first U.S. auction of permits to emit carbon dioxide under a mandatory cap-and-trade system. RGGI covers electric power plants located in all six New England states, New York, New Jersey, Delaware and Maryland.
"The Northeast, the national leader in combating global warming, is doing its share to protect its character and economy," said Lance Pierce, director of the Climate Program at the Union of Concerned Scientists (UCS), which is headquartered in Cambridge. "The region's forests, farms, coastlines and air quality are already feeling the effects, and RGGI state officials understand that the choices they make today and over the next decade can help the region avoid the worst consequences of climate change."
The permit program, which goes into effect on January 1, will cap the total emissions allowed from the 10 RGGI states' electricity plants at the same level through 2014 and then cut them by 10 percent by 2019. Each plant will have to obtain a permit, or an allowance, for each ton of carbon dioxide it emits.
The RGGI permit program includes several design elements that set key precedents for a national cap-and-trade program, according to UCS. The states will auction most of the permits, rather than give them to plants for free. The states also will spend any auction revenue on programs that help homeowners, businesses and industries make their buildings more energy efficient and on initiatives that support the development of renewable energy sources.
"By investing auction revenue in energy efficiency and clean energy, Northeastern states will cut their electricity consumption and the energy we use will be cleaner," said Pierce. "Those investments also will help our regional economy by creating local jobs, keeping energy costs affordable, and shielding ratepayers from energy market volatility. After all, when you use solar panels and wind turbines, you're using free, domestic fuel that never runs out."
UCS, which generally supports cap-and-trade systems, believes that the RGGI cap may be too high. The cap was set in 2005 and allowed for what officials assumed would be modest growth in emissions. New data, however, indicate that emissions have decreased significantly since then. State officials attribute the drop to milder weather, a slowing economy, and electric utilities switching to cleaner fuel.
"It's good that emissions have dropped, but that means the pollution cap likely will be higher than the level power plants will be emitting when the program goes into effect," said Pierce. "The lesson here is that up-to-date, accurate emissions data are crucial, and that cap-and-trade systems should include a provision for updating the cap within a reasonable time before it actually takes effect. State regulators must be able to quickly assess how much global warming pollution the plants are actually emitting and, if necessary, lower the cap."
Kevin Knobloch, president of UCS, said that although the RGGI program may need to be adjusted, it is still ahead of the rest of the country. "We know that RGGI is being closely watched by California officials implementing that state's global warming legislation and the Midwest Governors Association, which is working with its member states to cut emissions," he said. "The next president and Congress need to recognize that Americans are rightfully worried about climate change and want their leaders to take action. Northeastern states should take pride in playing what hopefully will prove to be a catalytic role."
The Union of Concerned Scientists puts rigorous, independent science to work to solve our planet's most pressing problems. Joining with citizens across the country, we combine technical analysis and effective advocacy to create innovative, practical solutions for a healthy, safe, and sustainable future.
