A Postive Plan to Cut Emissions

August 21, 2005 – Vol.10 No.22

A POSITIVE PLAN TO CUT EMISSIONS.

In a plan known as the Regional Greenhouse Gas Initiative, nine states in the U.S Northeast will likely go ahead and set up a market-driven system to control carbon dioxide emissions from more than 600 power plants.

And the group - Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont - may grow. Maryland, the District of Columbia, Pennsylvania, the Eastern Canadian Provinces and New Brunswick would be official observers that could possibly join the group. To add to the merriment, California, Washington and Oregon are considering a similar agreement that could conceivably tie in with the East Coast scheme eventually.

Under the proposal, greenhouse gas emissions would be capped at current levels for a total of 150 million tons of CO2 per year. Each state will have its own limits. Enforcement would start in 2009, but by 2015 the cap would get screwed on tighter and states would be required to begin reducing emissions up to 10 percent by 2020.

States would initially sell the emissions allowances and would use the proceeds to offer incentives to build more low or zero-emission power generating capacity like wind or solar energy.

Presumably the cap and trade system would allow operators of plants that can’t meet the cap trade credits with those who can. (They can pay to continue emitting greenhouse gases - for a price.) However, those that can exceed reductions should be able to sell their cleanliness at market-determined prices. Profits made from the sale of credits could be used to build even more clean capacity In other words, it could be lucrative to be a green energy developer in states belonging to the Regional Greenhouse Gas Initiative in coming years.

The question is will the Bush Administration, or powerful utility companies, sue to stop the pact. If the nine states (and perhaps others) begin to make alliances across the border with Canada, the Administration, that has already rejected an international treaty to mitigate global warming, may claim the states can’t make deals across borders without Washington’s consent. Interstate commerce can be controlled by Washington as well.

The Bush Administration showed its willingness this week to usurp states rights by including a line in the new fuel economy standards for light trucks by saying that “a state law that seeks to reduce motor vehicle carbon dioxide emissions is both expressly and implicitly preempted."

The line is a slap in the face to California and other states, including some of the same states that are promoting the Regional Greenhouse Gas Initiative. According to news reports, a White House official, who spoke on condition of anonymity, said under federal law the U.S. government, not the states, sets fuel economy standards. California (for instance) can regulate carbon dioxide from cars only if it does not constitute a new fuel economy standard.

If the Administration is trying to stop states from reducing greenhouse gas emissions from cars it seems likely it will try to stop states from reducing the same emissions from power plants.