As the Obama Administration drafts rules to control carbon emissions from power plants, advocates say there is a proven model in the Northeast for the nation to follow.
The focus now is on a market-based system that Vermont helped create called the Regional Greenhouse Gas Initiative.
The Environmental Protection Agency last week announced new greenhouse gas reduction standards for new gas and coal-fired power plants. The EPA is also starting the process of writing new rules for existing power plants. And it’s this effort that is likely to lead regulators to look to the cap-and-trade plan already in place in the Northeast.
The Regional Greenhouse Gas Initiative – known as RGGI – was the first mandatory, market-based effort to reduce the pollution that causes climate change.
Here’s how RGGI works: nine Northeast and Mid-Atlantic states set a cap on carbon emissions from the electricity sector. The emissions are then sold at an auction, with states reinvesting the proceeds in renewable energy programs and energy efficiency efforts.
Peter Shattuck is with the non-profit research group Environment Northeast. He said RGGI has exceeded expectations.
“There’s now four-plus years of experience with RGGI, everything from the architecture of the program, tracking emissions, auctioning allowances. That’s all now been proved to be effective,” he said. “And on top of that, you have the success of bringing down emissions faster than expected and at lower cost.”
Vermont Natural Resources Secretary Deb Markowitz said EPA Administrator Gina McCarthy made clear recently that the RGGI states can use their cap and trade program to help meet the pending EPA carbon reduction requirements.
“Which I think is great news. It’s great news for Vermont; it’s also great news I think for the country because this model has worked,” she said. “It’s not only resulted in a reduction of carbon but it’s also been a great way to infuse our effort to reduce our energy use through conservation and efficiency.”
Markowitz said the region will also see other environmental benefits from the EPA’s carbon reduction efforts. As power plants cut carbon, they will also reduce other pollutants.
“We’re the exhaust pipe of the Midwest coal. This is where all of the particulates, and mercury, all of the air pollution from those plants end up in the Northeast,” she said.
If the RGGI cap and trade system does become a model for the country to follow, it will put a New England stamp on climate change policy. The EPA’s initial effort to regulate CO2 pollution under the federal Clean Air Act came about because of a legal action brought by Massachusetts, Vermont and 10 other states.
But some states that host coal-fired power plants are likely to resist the new EPA rules. David Farnsworth is with the Regulatory Assistance Project in Montpelier, which advises governments on energy and environmental policy. He said states in the Midwest may initially resist but could be persuaded by RGGI’s record, in particular the money it’s brought back to the states for investments in energy efficiency
“When you’re investing in efficiency like a lot of the RGGI states are, you find that money staying in the state and stimulating the local economy,” he said.
“So I think once the (carbon reduction) standard is set and even the most resistant states come to terms with that, then they’re going to look around for the cheapest way of complying,” Farnsworth said. “And I think RGGI will match up.”