c2es.org

2/27/200715% below 2005 by 2020cap and trade

11/15/2007set emissions targets by 11/15/08~60-80% cuts by ???? (2040?)cap and trade; C inventory, reportingfull implementation by mid-2011

RegionalClimateAlliances

Spring 2008

Nov 15, 2007, in devt

Dec 20, 2005, eff. 1/1/09

Feb 26, 2007, eff. 1/1/12 (goal = -15% of 2005levels by 2020)

June 25, 2008, not eff. yet

RegionalClimateAlliances

Spring 2010

Transportation Climate Initiative(2010 declaration from 11 states)

RegionalClimateAlliances

Spring 2012

XX

X

X

XX

* now only CA and Canadian provinces

RegionalClimateAlliances

Spring 2013

* no action since 2010

and then there were two:

1)Western Climate Initiative (CA, BC, Quebec)-15% of 2005 by 2020- cap and trade programs linked

www.wci-inc.org

2) Regional Greenhouse Gas Initiative (RGGI)

CT, DE, ME, MD, MA, NH, NY, RI, VT

current cap: 91million short tonsCO2/yr

www.rggi.org

RGGI emissions by source

http://www.epa.gov/statelocalclimate/resources/state_energyco2inv.html

Regional Greenhouse Gas Initiative (RGGI)

-set regional limits on GHG emissions from electric power plants & transportation

-based on “Model Rule”, but each state can design their own strategyfor implementation (state targets set for 2009 emissions)

-came into force in 2009

-power plant emissions remain constant through 2014, fall by 10% by 2018REVISED 2012: -40% by 2014, and -50% by 2020

-“cap & trade” mechanism: RGGI states will set GHG cap and then auctionpermits equal to the tons of CO2 allowed by the cap- auctions are quarterly (next one March 11th, 2015)

Basic elements of Model Rule:

1) applicability: applies to fossil fuel-fired electric generating units >25MW(covers 25% of regional GHG emissions)

2) size & structure of cap: a) states must stabilize power sector CO2 emissions at 2009

emissions during implementation (2009-2014)b) then reduce emissions by 2.5%/yr for 2015-2018(total reductions of 10% below 2009 levels by 2018)

3) permitting: each CO2 source must have approved CO2 budget emission monitoring plan (EMP); developed by state energy regulators4) allowance allocation: most CO2 allowances auctioned off (vs. ETS)

25% allowances to support consumer benefit programs5) temporal flexibility mechanisms:

facilities can “bank” or “rollover” CO2 allowancesearly reduction allowances granted for early demonstrated

reductionsextended compliance period

Basic elements of Model Rule: (cont.)

6) emissions monitoring: CO2 unit must install and certify monitoring system, report quality-controlled data (borrows from EPA acid rain program)

7) offsets: awards CO2 offset allowances to projects outside capped sector that sequester/reduce CO2 emissions (limited to 3.3% of unit’s total compliance obligation)-must be “real, additional, verifiable, enforceable, and permanent.”-http://rggi.org/market/offsets/categories-includes SF6 emissions, trees, building HVAC efficiency (nat gas, oil, propane), landfill methane capture

8) price triggers: stage 1: if CO2 allowance cost >$4, CO2 offsets can increase stage 2: if CO2 allowance cost >$10, CO2 offsets increase more,

compliance period extended, international CO2 credits allowed

Carbon Allowance Reserve (as of 2014)

Who stands to gain here?

Who stands to lose?

Or is it that simple?

What would you do as a power company in a RGGI state?

What is leakage? and how does it impact RGGI?

LEAKAGE

- a shift of electricity generation from capped sources subject to RGGI to higher-emitting sources not subject to RGGI.

-impossible to predict ahead of time (market and political forces unknown)

-RGGI proposes to:1) track load vs. generation2) monitor C-intensive nature of non-RGGI power

policy options:1) reduce electricity demand (efficiency), so indirectly reduce leakage

2) limit the amount of CO2 (<xx lbs CO2/MWh) that could be “emitted” through long-term purchasing agreements between RGGI utilities and regional power plants

3) emissions portfolio standard

http://fas.org/sgp/crs/misc/R41836.pdf

Across three past CO2 allowance auctions, cost ~$1.93/ton

How much money did they make?

http://www.eia.gov/todayinenergy/detail.cfm?id=14851

http://rggi.org/docs/Auctions/26/PR120514_Auction26.pdf

How much did it cost the average customer?Distributing the CO2 allowance costs around the ratepayers in thoseStates, RGGI costs added $0.43/month to the average electric utility bill.

Where did all this money go?

http://rggi.org/images/Reinvestment.JPG

http://rggi.org/docs/Documents/2012-Investment-Report_ES.pdf

Has RGGI reduced emissions? [does it matter?]

http://fivethirtyeight.com/features/the-cap-matters-most-in-cap-and-trade-markets/

no big difference between RGGI and non-RGGI states, so far

http://fivethirtyeight.com/features/the-cap-matters-most-in-cap-and-trade-markets/

fuel switching (coal to natural gas) reduced CO2 emissions

http://www.eia.gov/todayinenergy/detail.cfm?id=14851

new cap will challenge RGGI’s effectiveness

http://fivethirtyeight.com/features/the-cap-matters-most-in-cap-and-trade-markets/

source: rggi.org

a different perspective

Categories of State GHG activities

1)Vehicle Emissions Standards

2)Renewable Portfolio Standards

3) Efficiency Standards/Programs

4) Cap and Trade programs

Most content in the following section fromCenter for Climate and Energy Solutions (c2es.org)

Vehicle Greenhouse Gas Emissions Standards – California leads the way

2002: CA passes law requiring 30% emissions reductions by 20122002-2007: EPA stalls on granting CA waiver to step outside

federal emissions standards in response to industry complaints2007: CA files lawsuit against EPA for stalling2009: EPA grants CA waiver to set standards *if* changes to 2016 timelines

to be consistent with Obama CAFE standards

Federal Corporate Average Fuel Economy (CAFÉ) standards

CAFÉ standardscurrent: 35.5 by 2012-1016future?: 54.5 by 2025

Plug-in electric vehicles

Biofuels

Low-carbon Fuel Standard: a lifecycle analysis of trans. fuel sources

Ex from California: fuel providers must reduce C intensity of fuel mix 10% by 2020

Renewable Portfolio Standards

Ranges from:CA: 33% by 2020TX: 5% by 2015NY: 30% by 2015CO: 30% by 2020NC: 12.5% by 2021

Financial Incentives for CCS

Energy Efficiency Standardsand Targets

Hydraulic FracturingChemical Disclosure Map

through electricity bills and/orutility charges

allows costumers to sell electricityback to grid

Public benefit funds Net metering programs

Green PricingGaPower optional: $5/100kwhr;green powerw/ 50% solar;~$50/monthadditional cost

Appliance Efficiency Standards

Residential Building Energy Codes

Commercial Building Energy Codes

State Building Efficiency Requirements