Regional Greenhouse Gas Initiative wants to be a tougher cap-and-trade system
Posted by David Brooks | Friday, February 8, 2013
New Hampshire’s participation in the carbon cap-and-trade system called RGGI survived a near-death experience in the state Legislature last year, and now the state needs to decide whether it wants to double down on the program and make it tougher. (FYI: This is an unedited version of a story that will run in The Telegraph, when the storm leaves us room!)
The nine-state Regional Greenhouse Gas Initiative has put forward new guidelines that sharply decrease the amount of carbon which power plants can release into the atmosphere, as well as making other changes.
One major charge would allow certain forestry projects to be counted as an offset to pollution, because growing trees removes CO2 from the air. Another would create a financial incentive that would kick in if the price of carbon allowances rises too quickly.
Each RGGI state, including New Hampshire, has the option whether to follow some or all of these rules.
The New Hampshire Department of Environmental Services will hold a public hearing Friday in Concord to discuss the issue.
The biggest change is a proposed immediate reduction in the total amount of carbon dioxide that power plants can release into the air, from 165 million tons to 91 million tons, a 45 percent cut in 2014. This so-called “RGGI cap” is proposed to decline another 2.5 percent each year from 2015 to 2020.
This is the first time since RGGI started in 2009 that such a revision has been proposed.
RGGI is the nation’s first market-based regulatory program designed to cut greenhouse gas emissions. California is instituting a similar program; Europe has had one for close to a decade.
Under RGGI, which is pronounced “reggie,” power plants must have allowances equal to their emissions of carbon dioxide, the most prevalent greenhouse gas. The program issues a certain amount of carbon allowances, and companies or institutions bid to buy them; the resulting money is used by each state to reduce overall energy use.
New Hampshire has received about $40 million from RGGI since 2009, most of which it has spent on grants to improve energy efficiency in homes and businesses.
Opponents describe the program as a hidden tax that raises electricity rates but accomplishes little.
A number of legislators, mostly Republican, tried to get New Hampshire to withdraw from RGGI last year, but the issue failed to pass the state Senate. PSNH has been a vocal opponent of RGGI, which it says contributes to an increase in its rates.
Opposition to the program surfaced in other states, too. It was strongest in New Jersey, with has withdrawn from RGGI.
Other participating states are Connecticut, Delaware, Maine, Maryland, Massachusetts, New York, Rhode Island, and Vermont.
Supporters of RGGI tout the energy-saving benefits. A 2012 analysis UNH claimed that the state’s RGGI income has reduced annual energy use by 182,800 million BTU, saving the state residents and businesses $5.3 million in annual energy costs.