Carbon Price Decision Will Shape Northeastern States’ Response to Trump Program Cuts
The nine northeastern U.S. states that make up the Regional Greenhouse Gas Initiative (RGGI) are on the verge of a decision on future greenhouse gas emission cuts that will largely shape their ability to counter the Trump administration’s efforts to gut the country’s emission reduction policies.
“It’s more important than ever for states and regions to lead on climate,” said Jackson Morris, eastern energy director at the Natural Resources Defense Council. “The decision reached by the RGGI states in the coming weeks is going to be a pivotal demonstration of whether we can continue to make progress, even if we see no [federal] progress under Trump.”
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The RGGI states were innovators when they introduced the first carbon cap-and-trade program in the U.S., InsideClimate News reports. Now, after 20 months of public consultations and private negotiations, a decision on whether to pursue deeper reductions is expected within weeks.
“In three of those states—Maine, New Hampshire and Maryland—the Republican governors or their appointees have expressed concerns over the potential costs of deeper emissions cuts,” InsideClimate notes, which means one or more of them could withdraw from RGGI if the wider group decides on a tougher target. “Across the compact, however, there is bipartisan support for increasing RGGI’s ambition. Massachusetts Governor Charlie Baker, a Republican, and New York Governor Andrew Cuomo, a Democrat, are the most outspoken advocates of more stringent goals.”
Sierra Club Eastern Region Deputy Director Mark Kresowik said RGGI might still take a tougher stand, even if it divides the group. “‘This is the future we’re going to have, and if you’re not committed to making climate progress, we’re going to go without you’—I think that’s what these states need to say,” Kresowik told ICN. “Ultimately, Maine and New Hampshire will come along—in part, because their citizens certainly support the program.”
RGGI’s current rules call for states to reduce their utilities’ greenhouse gas emissions by 2.5% per year, and the last nearly two years of dialogue and debate have focused on whether that target should be strengthened—one proposal calls for a target of 3% per year, plus a one-time cut of 6.5% in 2019. InsideClimate explains the program has been a victim of its own success—year after year, utilities have consistently exceeded their carbon reduction targets, so a surplus of pollution credits in the cap-and-trade program has driven down their value.
“That means the prices of the credits are so low that polluters can easily purchase them rather than investing in other steps to cut their own emissions,” explains ICN reporter Marianne Lavelle. “At the most recent auction, in June, credits sold just above the floor price, at US$2.53 per ton—their lowest price in five years. That is a lost opportunity for the states, which use auction revenues for clean energy and conservation programs to help residents cut their electric bills.”
A study released earlier this month by NRDC showed that a tighter cap could bring states an additional $3.2 billion in revenue through 2030. “All of the program’s history suggests we can continue to go after these emissions reductions aggressively without causing a burden to ratepayers,” said Acadia Center policy analyst Jordan Stutt.