New York/Northeast Region Climate Asset Plan

New York and the Northeastern States are poised to make history by implementing the Regional Greenhouse Gas Initiative (RGGI). RGGI would impose the first mandatory limit on carbon emissions in the United States.

Currently aimed at modest reductions by electricity generators, RGGI is explicitly designed to achieve more ambitious cuts in the future and cover all carbon emissions in the region. We are encouraged by the progress being made and are optimistic that emissions reduction can be achieved in a way that brings about broad economic benefits.

How it Works

As it is currently proposed, the RGGI would be implemented as a cap-and-trade system that:

• Caps global warming pollution by requiring industry to obtain allowances for each ton of carbon released, with a fixed annual number of total allowances available.

• Creates an annual auction for the sale of allowances.

• Sets total allowable emissions for each year lower than the previous year until the long-term emissions reduction goal is met.

Starting in 2009, the emissions target would be set at current levels. From 2015 through 2020, the targets would be gradually reduced until they are 10% below current levels.

The RGGI model requires participating states to auction a minimum of 25% of their allowances to provide revenue for energy efficiency services and other benefits to energy consumers, thus lowering energy bills.

More Work Ahead

While we are proud that the partial auction model is incorporated in the RGGI rules, the Redefining Progress Climate Action Plan (CAP) principles require full auction for equity, efficiency, and social justice. Several states, including New York, have announced that they will follow our recommendation and move to 100% auction, and more appear to be leaning in that direction.

We are continuing to work toward all of the allowances being sold so that the economic, social, and environmental benefits are maximized. Other CAP principles that we continue to champion in the region include:

• Require allowances for emissions from all sectors, not just electricity producers.

• Combine market-based incentives with technology-promoting regulations to encourage energy efficiency and renewables.

• Protect competitiveness by covering emissions associated with electricity consumed in RGGI states, rather than emissions associated with electricity produced in RGGI states. Extend this principle to other energy-intensive products as the coverage of the allowance program expands.

• Recycle allowance auction revenue to promote clean energy technologies, offset the burden on low- and moderate-income households, and encourage sustainable investment in the region’s people, businesses and environment.

Learn More

For more information on the RGGI proposal and process, go to www.rggi.org.

For more information on Redefining Progress’s efforts, contact Executive Director Jim Barrett or J. Andrew Hoerner, Director of RP’s Sustainable Economics Program.

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Photo courtesy Reiner Kraft