US States Move Ahead with Plans for Greenhouse Gas Cuts

August 13, 2006 – Vol.11 No.21

U.S. STATES MOVE AHEAD WITH PLANS FOR GREENHOUSE GAS CUTS.

While the US government continues to drag its feet on legislation to cut greenhouse gas emissions, a group of states is moving forward.

The seven participating states in the Regional Greenhouse Gas Initiative (RGGI), which include Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York and Vermont (and will include Maryland by June 2007), have agreed to proposed rules for a cap-and-trade system to reduce carbon dioxide from power plants.

Under the rules, the states will launch a trading system that will utilize allowances of CO2 emissions. Beginning in 2009, emissions from powerplants will be capped at approximately current levels. The cap will remain in place until 2015. After that, emissions will be cut to achieve a 10 percent reduction by 2019. (Without the cap and the 10 percent cut, emissions would grow by 35 percent, RGGI says.)

In the cap-and-trade program the participating states will issue one allowance or permit for each ton of emissions per conventionally fueled powerplant with a capacity of 25 megawatts or more.

Powerplant operators will be able to use offsets to achieve a net reduction in CO2 emissions and those offsets can be purchased outside of the RGGI region. Offsets might include natural gas end-use efficiency, landfill gas recovery, reforestation, and methane captured from farming. The proposed rules include allowances that will be dedicated to energy efficiency programs, new clean energy technologies and ratepayer rebates.

RGGI expects average annual household electric bills to increase $3 -21 per year if the program takes effect on January 1, 2009 as planned. The last hurdle will be the state legislatures who must approve the program. Visit RGGI at http://www.rggi.org/