There’s a great story on the electronic front page of The Boston Globe today on which I’d love wax eloquent (and have) but I need to scoot into Cambridge.:
Massachusetts back in RGGI after Romney yanked us out!! (my headline, not theirs)
Governor Deval Patrick is expected to announce today that Massachusetts will rejoin a group of other Northeast states that plan to combat global warming by charging power plants for emissions of so-called greenhouse gases. Patrick’s predecessor, Mitt Romney, had dropped out of the program out of concern that the pollution fees would raise the state’s already high electricity rates.
It’s nice to be part of the solution again, especially as the reality of global warming seems to be more serious than scientists have predicted. We’ll have to see how the permit details shake out, but this is good bit of catching up to where we once were.
This is a modest, but very important step toward reducing greenhouse gas emissions, and a baby step toward transforming our economy to a more sustainable basis. Although some of the traditional energy producers opposed this action, it’s important to note that many of the state’s leading companies supported the RGGI. With so many countries now working to reduce greenhouse gas emissions, companies working in global markets are under some pressure to reduce emissions at all their facilities worldwide. Joining the RGGI helps to level the local and regional playing field, so Northeast companies can compete more effectively in global markets. I hope this is an early part of a virtuous circle.
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I read that the upcoming State of the Union address will focus on climate change. I think we need to be very wary of federal initiatives that could undercut state initiatives, inlcuding the RGGI. Such an approach would be thoroughly consistent with the Bush administration’s past actions, whether it be the “clear skies” program, medicare and social security reform, or education reform. To borrow from football, be sure to watch the ball, not where the quarterback is looking.
I’ve got a question, but first let me lay out my understanding, since if that’s wrong than my question is ill-formed.
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The idea of the RGGI cap and trade is that the government will limit the amount of emissions permissible amongst large emitters, like power plants. Due to the supply restriction, these “easements” will have economic value. That’s the cap. The trade allows different entities to buy and sell these easements, thereby encouraging less emitting processes because those processes will be less costly.
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So, here’s my question: can anyone buy one, or do you have to be a power plant? Let’s say there are 1,000,000 shares of emitting rights (the actual amount permissible isn’t relevant, just that it equates to a specific amount). Were I to buy 25 shares, that would be 25/1,000,000 of the total emissions permissible that I could emit. If I then chose not to emit, isn’t that OK?
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Here’s my point: aside from the cost of doing so, what’s to stop Greenpeace from buying these shares on the open market, thereby reducing the total amount of pollution emitted in RGGI states? Furthermore, what’s to prevent RGGI from deciding ten years from now to sell more permits, thereby reducing the value of the current shares? This problem is similar to what happens when a city with taxi medallions (like NYC) talks about issuing more.
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So…
1. Can non-emitting entitles legally buy up the rights to pollute, thereby preventing pollution?2. What is the guarantee that the gov’t (RGGI, others) won’t alter the supply of pollution later, thereby dramatically changing the value of the shares?
I’m not familiar with the specifics of the cap and trade program under RGGI, but past cap and trade programs have allowed outside organizations to buy and retire pollution credits. The best past example probably relates to the Canada-US acid rain program. See EPA Clean Air Markets.
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The buying and retiring of emission allowances seems to be one part of the greenhouse gas reduction strategy. For example, Dell is partnering with Carbonfund.org to allow customers to offset carbon emissions. One of the activities of Carbonfund is buying and retiring emission allowances: Carbonfund Offset Projects.
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I used to be a skeptic about cap and trade programs, but the data from the acid rain program are very encouraging in terms of getting emitters to go beyond mere compliance with the caps. Overall Sulfur Dioxide and Nitrogen Oxide emissions have fallen faster than the regulatory requirement.
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I’m still a skeptic about how sensible it is to engage in personal carbon offset programs. I haven’t figured out whether I think these are worthwhile, or just guilt-soothing.
RGGI has annual permits auctioned off. The permit gives the right to emit CO2 for that year. The next year, you have to buy a new permit.
This is an excerpt from a breaking news AP article emailed to me to which I’ve not yet found a link. I just gotta say it…I (heart) Deval.
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This component is an important step forward. Research by the state’s Division of Energy Resources shows that this move could double spending on efficiency programs, resulting in the average household electric bill falling by as much as 12%. Vermont has already done this and New York Governor Eliot Spitzer is committed to 100% auctioning. There are also strong indications that Connecticut and New Jersey are headed in the same direction.
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Now let’s hope RI finds her way back!
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Don’t want to spoil the party, but what Mass. is doing doesn’t amount to much of anything in the emissions dept. Let us look at the World’s largest polluter the People’s Republic of China.
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China is where the US was in the 1950s in regards to pollution except on a larger scale. If we want real progress we need to get the rest of the World to come up to US standards.
There was a news story today, in fact, that said that China’s done the math and they can see how climate change would hurt their economy. Their difficulty at this point, apparently, is that they’ve incentivized economic growth to a point where the local officials are not inclined to sacrifice it (and, as such their careers) to come into compliance with the new environmental laws.
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That said, I’m pretty sure that the US is still the World’s largest producer of greenhouse gasses.
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In any event, we can’t use China or India as an excuse for inaction. If we develop alternative energy technologies here, then they will be our customers. That should be incentive enough for us to work to reduce our role in climate change.
and then they got over themselves, and decided to work toward being part of the solution instead of part of the problem.
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Are they working hard/smart enough? I doubt it. But, they’re sure progressing faster than tUSA is.
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China also has the Olympic Games as an incentive to clean up, and they’re making progress. Fast/smart enough? Nah. But, progress nonetheless.
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So — let’s get cracking. There’s no silver bullet, but we can all work toward reducing our own part of the problem, as well as lean on others to work on their part.
I was just about to post with a suggestion that BMGer’s email the Gov’s office asking him to support the 100% auction of the pollution credits, when I found out that he was about to do it! Then he did! Thanks, Lori, for the original post and the update.
and I’m already spending it. I just put up a post about one idea for dealing with the demand side.
All, RGGI has a website so you can look the details of what is proposed there. It is true that is not broad enough and not agressive enough. We need to do more sooner. Hopefully it is just the website that is behind but the “upcoming events” list a July 2006 auction and the “latest news” is also from August 2006.
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There is also a comprehensive website and a large climate change roadmap/plan at Environment Northeast worth checking out. RGGI is a large and important start but not the comprehensive solution.
…The major sources of greenhouse gases (and gases that give rise to acid rain–remember them?) are coal and oil-fired power plants in the midwest. Nothing that is done in the northeast is going to assuage those problems.
Electricity is commonly transported across state lines, and even across regional lines.
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If the Northeast is able to generate surplus electricity with both lower emissions and more cheaply than Ohio et al, then those states will turn some of their plants off and import the juice from us.
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We’re a long way from that, but every time we install more “fuel-free” (solar, wind, etc) production, we move in that direction.
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I wonder though: would it be appropriate for RGGI states to get together as a co-op and build renewable energy plants in non-RGGI states? After all, if we’re getting lots of pollution from coal fired plants in Ohio, why not build wind turbines in Ohio to help turn off some of the coal? There’d be a net reduction in carbon emissions and pollution, and the prevailing winds blow that pollution to the Northeast anyway, so we’d be cleaning up our own air.
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So, how about it?
Every federal representative/senator from a RGGI state (barring a true head-up-ass Republican planning to run for president) is going to vote for some form of national CO2 controls, as businesses in their state would already be playing by those rules, and it would lower the playing field.