ORIGINAL REPORTING: How big can New England's regional cap-and-trade program get?
How big can New England's regional cap-and-trade program get? New numbers prove it works and New Jersey and Virginia want in. Who’s next?
Herman K. Trabish, May 1, 2018 (Utility Dive)
Editor’s note: New England’s cap-and-trade market continues to thrive and grow.
The first U.S. cap and trade program designed to reduce greenhouse gas emissions from the electric power sector has proven so successful that some supporters are now wondering if it ought to go national. About the same time the 2009 energy bill's national cap-and-trade plan was being stopped by Senate skeptics, several Northeastern states initiated New England’s Regional Greenhouse Gas Initiative (RGGI). The latest numbers show it is responsible for millions of tons of avoided greenhouse gas emissions (GHGs) and billions of dollars in benefits to electricity users throughout the region. Two new states are now applying to join the current nine members. And several more states have shown a willingness to discuss the privileges of membership with RGGI leaders.
RGGI had an abundance of doubters while the program was being designed between 2005 and 2009. The Edison Electric Institute (EEI), on behalf of U.S. electric utilities, raised questions ranging from whether participating states could handle the cap and manage the trading to whether the concept was constitutional. The program was designed around a cap on emissions of carbon dioxide (CO2) from the electric power generation sector. There is a small provision in the program for other GHGs. The program requires 25 MW and larger power plants in the regionto keep their emissions below an allotted share of the cap. But each participating state issues CO2 allowances, which power plant owners can purchase in regional auctions if they choose to exceed their cap. The auctions create a competitive market through which a cost of CO2 emissions is set. That extra cost for generating electricity is an incentive for fossil fuel-burning power plant owners to use available technologies to reduce emissions. It also gives non-CO2-emitting power plants such as wind and solar projects a competitive opportunity… click here for more
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