Pressure mounts on RGGI to examine steeper CO2 cuts

RGGI states are coming under greater pressure to consider deeper CO2 cuts after much of a key hearing on Friday was taken up looking at the effects of keeping the programme’s emissions cap flat through 2030.

 

The third of four stakeholder meetings was held in Boston, a series of sessions designed to help the nine northeastern US states in RGGI set both rules extending the power-only cap-and-trade system into a fourth trading period beyond 2018, and longer-term CO2 targets under the federal government’s Clean Power Plan.

 

The webstreamed meeting heard a presentation from consultants ICF, which was tasked by RGGI’s regulators to model two 2030 scenarios plus a default ‘do-nothing’ option.

 

Today’s session heard the default option and the weaker of the two scenarios – both of which would effectively either maintain emissions at 2020 levels or increase them over the next decade – although this would still be enough to meet CPP goals.

 

ICF projected that both of those scenarios would keep CO2 prices below $10 a short ton through 2030 – though the ‘do-nothing’ outcome did not see prices above $8 because it allowed greater use of ‘flexibilities’, namely tapping extra units from the programme’s Cost Containment Reserve and a more extensive use of offsets.

 

RGGI states have also pledged to examine a second scenario that would cut the cap by 2.5% a year and eliminate the CCR and offset quotas, but ICF did not present this at today’s session.

 

Several attendees at the meeting urged RGGI to examine the effects of deeper targets. They were among the 58 environmental, public health, and clean energy organisations and businesses that wrote to New York Governor Andrew Cuomo urging him to examine a 5% annual cap reduction.

 

“Governor Cuomo has set aggressive and necessary climate goals for New York. Doubling down on RGGI by requiring power plants to cut pollution in half by 2030 is a way the Governor can ensure New York meets those goals,” said Conor Bambrick, Air and Energy Director for Environmental Advocates of New York, in a statement to the letter.

 

“If we have any hope of meeting the challenges set forth in the Paris Agreement, the states are going to have to lead on climate action,” he added.

 

Environmental campaigners The Sierra Club want RGGI to also consider a 7.5% annual cap reduction to reflect both the average 5% annual cuts seen so far in RGGI since it began in 2009, and the fact that six of the nine RGGI states have signed the ‘Under 2 MOU’ declaration to cut emissions by at least 95% by 2050.

 

But not all at the meeting were demanding more ambition.

 

Derek Furstenwerth of utility Calpine noted that the scenario model presented appeared to put RGGI states at parity with other US states under the CPP, and he saw little need to do more.

 

 “Imposing a lower budget on RGGI states, … I’m not sure that is necessary,” he said, adding that he would instead seek to open up trade with non-RGGI states, something that the scheme’s members are looking into.

 

An official from New York state said the RGGI states were still committed to the September deadline initially mandated under the CPP to unveil its initial policy scenario for compliance, a date that is now in question after the US Supreme Court stayed enforcement of the measure.

 

A date for the fourth and final RGGI programme review stakeholder meeting has yet to be confirmed.

 

By Ben Garside – ben@carbon-pulse.com

 

Carbon Market Compliance Association