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RGGI/ WCI Overview
Regional Greenhouse Gas Initiative (RGGI)
Western Climate Initiative (WCI)
participants 10 states in Northeast 7 states in West plus several Canadian provinces
covered entities/ emissions entities: fossil fuel-fired electricity generating units with a power production capacity of at least 25 megawatts
emissions from:electricity generationindustrial/commercial combustion and production – based on certain thresholdsresidential/commercial/industrial combustion – regulated “upstream”transportation – regulated “upstream”Threshold = 25,000 metric tons
Regional Greenhouse Gas Initiative (RGGI)
Western Climate Initiative (WCI)
caps and distribution 2009-2014: “actual” emissions2015-2017: 2.5% reduction2018- : 10% reduction
2012-2014: actual emissions2015-2020: unknown
allowance distribution auction* - states have discretion, but agreed to an auction; some states reconsidering
up to each jurisdiction – state legislatures in some states rejected auction
Regional Greenhouse Gas Initiative (RGGI)
Western Climate Initiative (WCI)
offsets: allowable projects landfill gas (methane) capture and combustion;
sulfur hexafluoride (SF6) capture and recycling;
afforestation (transition of land from non-forested to forested state);
end-use efficiency for natural gas, propane and heating oil; and
methane capture from farming operations
agriculture (soil sequestration and manure management)
forestry (afforestation/reforestation, management, conservation)
waste management (landfills and wastewater)
Regional Greenhouse Gas Initiative (RGGI)
Western Climate Initiative (WCI)
offsets: amounts normal: 3.3% “offset trigger”
[$7/ton]: 5% “safety valve trigger”
[$10+/ton]: 10%
up to 49%
Legal Limitations
• Compacts Clause– “No state shall, without the consent of
Congress, . . . enter into any Agreement or Compact with another state, or with a foreign power[.]” U.S. Const. art. I, § 10, cl. 3
– Indicia of compact• Binding reciprocity• Regulatory body
Equity Implications
• Setting the cap: which states/industries should bear the burden?
• Allowance distribution: what if only some states agree to an auction?
• Offsets: won’t some states benefit more than others?
Legal Limitations
• Dormant Commerce Clause– Prohibits states from imposing undue burden on
interstate commerce• No facial discrimination or economic protectionism• “undue burden” – based on balancing
– Extent of the burden– Justifications for the burden– Whether alternatives exist
Equity Implications
• Participants in a regional program cannot exclude non-participants from benefitting through use of offsets (unless the program prohibits offsets entirely) – is this fair?
• Can participants regulate products introduced by non-participants into the market?– E.g., RGGI – covers emissions within participating
states; what about Penn. Power?– WCI – trying to address this, but how?