RGGI Ponders Possible Trading With Non-Member States

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By Martha W. Kessler

April 29 — Officials from participating states in the Regional Greenhouse Gas Initiative (RGGI) plan to spend the next several months evaluating potential modifications to the program, including the possibility of allowing trading with states that are not participants in the regional cap-and-trade program.

RGGI officials indicated the participating states anticipate complying with the Clean Power Plan using a mass-based emissions standards approach. Consequently, Lois New, director of the Office of Climate Change in the New York Department of Environmental Conservation, said during a stakeholder meeting in Boston on April 29 that the program is seeking input on the minimum compatibility requirements under which RGGI states could opt to trade allowances with states that choose not to become participants in the RGGI program.

The first question is, RGGI said in a request for stakeholder comment, should RGGI states consider allowing trading with states that do not become participants in the RGGI program? And if so, what program design features and other conditions should be aligned with RGGI program elements in order for RGGI states to be able to trade with those other states?

“There is a whole suite of things to consider,” New told participants, that includes distribution of allowances, treatment of newly constructed emission sources and allowance tracking systems, among other issues.

RGGI also said it welcomes the possibility of additional states becoming participants in the Northeastern trading program, and that in order for a state to join it would be required to adopt a regulatory program and conduct business that is consistent with the RGGI model rule and related administrative processes.

The current RGGI members states are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.

Expanding Efforts

In welcoming the RGGI members states and other stakeholders, Judith Judson, commissioner of the Massachusetts Department of Energy Resources and a RGGI director, said that since the program's inception, carbon pollution from the power sector across the region has been reduced by 40 percent, while the RGGI auctions have generated $2.4 billion for the member states.

The stakeholder meeting held in Boston is part of review process underway by participating states to consider the program's successes, impacts and design elements and to determine how RGGI should proceed.

New told participants the organization hopes to issue a program review report and information regarding potential modifications by September.

During the discussion period, several participants, including officials from the Sierra Club and other environmental, health and clean energy organizations, called on RGGI to adopt 5 percent annual carbon reductions between 2020 and 2030, citing a recent study by Synapse Energy Economics Inc., that said the 5 percent figure is necessary for states to meet their energy sector carbon-related goals.

In addition, Amanda De Vito Trinsey, an associate with the New York firm of Couch White LLP, urged RGGI to expand its efforts into the transportation sector as a parallel initiative.

In a statement issued as the RGGI stakeholders meeting took place in Boston, a coalition of 58 environmental, health and clean energy organizations called on New York Gov. Andrew Cuomo (D) to push for an extension of RGGI cap reductions that will require an annual 5 percent reduction in carbon pollution from power plants.

Stakeholder comments may be submitted to RGGI until 5 p.m. EST on May 9 by e-mail to info@rggi.org.

To contact the reporter on this story: Martha Kessler in Boston at mkessler@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

For More Information

Program review materials for the April 29 RGGI meeting are available at http://www.rggi.org/design/2016-program-review/rggi-meetings.

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