Embed Size (px)
Citation preview
Carbon Finance North America Workshop
NYCCatherine A. Lee, Esq.
Consultant to Maine DEPJune 15, 2007
The Nation’s First GHG Cap and Trade Program
www.gcglaw.com www.go-worldlee.com
2
The RGGI Region At A Glance Ten States 53 million people 8th largest emitter in the world 2.4+ trillion dollar economy
3
RGGI Program Goals
Cap emissions at current levels through 2014; reduce 10% by 2018
Achieve lowest cost reductions Encourage energy efficiency Stimulate innovative technologies Act as a model for a national program
4
How Does RGGI Work?
The region has a single cap
Each state has an emissions budget – in tons of CO2
States issue “allowances”, one per ton, up to the amount of the state budget
Most states to auction most or all allowances
Each RGGI source must “cover” its emissions with allowances every three years
5
State CO2 Budgets
Connecticut 10.7 mt Delaware 7.56 mt Maine 5.95 mt Maryland 37.56 mt Massachusetts 26.66 mt New Hampshire 8.62 mt New Jersey 22.89 mt New York 64.31 mt Rhode Island 2.66 mt Vermont 1.23 mt TOTAL 188 mt
6
Allocation of Allowances Model Rule requires minimum of 25% of allowances
to be auctioned, proceeds used for Consumer Benefit and/or Strategic Energy Purpose
Remaining 75% left to each state to decide how to allocate Vermont law requires 100% auction Maine law requires 100% after small set aside New York pre-proposal calls for 100% auction New Jersey and Massachusetts are evaluating 100%
auction Connecticut to auction 100% after small set asides
All states favor regional auctions
Additional Market Flexibility“Offsets” or Project-Based Reductions
Methane Capture from Farms
Convert Land
to Forest
Additional Market Flexibility
Landfill Gas Capture at Small Landfills
SF6 Gas Leak Prevention in
Electricity Distribution
Additional Market Flexibility
And End-Use Energy Efficiency Projects
i.e. reductions in fuel use for space and water heating Does not include electric end use energy efficiency
10
Offset Program Characteristics
Offsets—limit on use:
No limit on issuance of offsets Each Source may “cover” up to 3.3% of its total reported
emissions in a compliance period with offsets If $7/ton price trigger hit, limit on use expands to 5% of
reported emissions If $10/ton trigger price hit, limit on use expands to 10% of
reported emissions At $10 price trigger, allowances from projects outside the US
11
Current Critical Path Items
The Regional Organization Non-profit corporation
Based in NYC
In the process of hiring Executive Director
Provide technical and administrative support to the states
Implement auctions platform and emissions tracking system
Technical support for offsets program
12
Current Critical Path Items
Emissions Allowance Tracking System Joint regional platform for entire RGGI program Administrative infrastructure will be up and running before program
launch Web based, open and transparent Will track allowances by source and general accounts Offsets tracking:
Issuance of allowances Prices Filing of consistency applications Issuance of determinations Submittal and approval of monitoring and verification reports
13
Current Critical Path Items
Auction Platform Regional design, participation optional
NYSERDA oversight of Auction Research team Resources For The Future University of Virginia
Two Phase Report
14
Phase I Report: Preliminary Recommendations From the Auction Research Team
Quarterly auctions with limited number of allowances auctioned each time
Pre-sale of later vintages in limited quantities Reserve price set for each auction Participation open with binding financial assurances Goal to hold first auction by July 2008 Phase I report available
at:www.coopercenter.org/econ/sitefiles/documents/pdf/rggi_interim_report
Phase II Report will be completed in October 2007
15
Current Critical Path Items
Offsets Implementation Common applications and
monitoring/verification forms Guidance documents for regulators and
developers Accreditation process for independent
verifiers Consider additional offsets categories
16
Other Issues
Potential Emissions Leakage March 2007 Report
Available at www.rggi.org/emisleak.htm Final Report expected December 2007 Further evaluation of policy options and final
recommendations
Model Rule Implementation Legislation and/or Rulemaking
Model Rule implementation underway in all 10 states Expected to be complete between December 2007 and
December 2008
17
A Federal Program
No preemption Science based cap and trade Economy wide No price triggers or caps Not contingent on action by other countries Federal program a floor, not a ceiling No grandfathered coal plants Allow banking
18
Other Jurisdictions Interested in Joining/Linking to RGGI District of Columbia
Canadian Provinces Ontario and Quebec
EU ETS
- Design Elements
- Implementation Protocols
19
California and RGGI
RGGI + California Having Conceptual Discussions
- 28.5% of US population
- 32% of US economy
- 3rd largest World economy
- 17% of US emissions
- 6th largest emitter worldwide
20
Questions?
For further discussion or information contact:
Catherine Lee
207-415-5354
www.gcglaw.com www.go-worldlee.com
