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As the RGGI states explore modifications, some groups are urging for larger targets and more equity.

London, Thursday, 23 December 2021 -

Environmentalists are requesting more ambitious emission reduction targets and a mandate for equitable revenue distribution as the Regional Greenhouse Gas Initiative, or RGGI, is being reviewed by member governments.

The states are reviewing the cap-and-invest program for the third time since it began in 2009. With climate change predictions appearing more severe than ever, proponents say it's time to significantly increase the program's carbon emission reduction goals.

"The states cut the emissions cap and improved the program in both of the prior program assessments," said Jordan Stutt, carbon program director at the Acadia Centre. "However, neither of those reviews resulted in adequate improvements. We'd like to see it drop even faster, eventually leading to zero emissions."

As RGGI governments explore revisions, advocacy groups call for higher targets and more equity.

Environmentalists are demanding more ambitious emission reduction targets and a mandate for equitable revenue distribution as the Regional Greenhouse Gas Initiative, often known as RGGI, is being reviewed by participating governments.

The states have examined the cap-and-invest program three times since its inception in 2009. With climate change projections becoming more catastrophic than ever, proponents say it's time to step up the program's carbon emission reduction goals.

"The states cut the emissions cap and enhanced the program in both of the prior program assessments," said Jordan Stutt, the Acadia Centre's carbon program director. "However, neither of those reviews yielded enough results. We'd like to see it fall faster and eventually reach zero."

Emissions from power plants in those states have decreased by more than half, though it's unclear how much of that was due to dramatic drops in natural gas and renewable energy prices rather than RGGI.

"So far, RGGI auction prices have been fairly low," said Kenneth Gillingham, a Yale University economics professor who specializes in environmental and energy concerns. "It's a little nudge." It has lowered emissions, but I don't believe it has had a significant impact."

Under the RGGI, the cap for 2021 is 119.8 million short tons. It is expected to decrease by 3.655 million tons every year until 2030, when it is expected to stabilize at around 86.9 million tons.

However, environmentalists argue that the timeline is too lenient, especially given many of the participating states' high greenhouse gas reduction and renewable energy targets.

"To maintain their position as national leaders in decarbonizing electricity generation, the RGGI states should evaluate cap levels that are, at a minimum, consistent with these state goals," wrote Drew Stilson, a senior policy analyst at the Environmental Defense Fund, in written comments submitted during a program review stakeholder meeting last month.

Acadia also wants RGGI's so-called "cost containment reserve" to be eliminated or redesigned. If auction prices reach a specific level, more carbon allowances beyond the quota are released from the reserve under this process.

Allowing for more pollution, according to Stutt, is "unacceptable." He pointed out that the allowances sold for $13 each at the most recent RGGI auction earlier this month, a new high and a bigger incentive for the market to generate electricity from sustainable sources. However, because that amount equaled the cost control reserve's trigger price, an additional 3.9 million allowances were released.

"We think that the price triggers must be much higher than they are if the cost control reserve is maintained," Stutt added. "When compared to comparable programs throughout the world, carbon costs are still quite low."

The reserve, according to Gillingham, is meant to act as a safety net to keep the RGGI program from becoming too costly for ratepayers — "if it raises rates too much, it might not last." However, he agreed that a $13 trigger price is too low "if the policy's purpose is to assure that emissions are reduced significantly."

Advocates also hope that the states would take a close look at whether the program is assisting the communities most affected by air pollution. So far, RGGI has left it up to individual states to decide how to spend their portion of the auction revenues. Advocates, on the other hand, are pushing for a requirement that states donate at least 40% of earnings to environmental justice communities.

"It's disappointing that we haven't seen any movement on this," Stutt remarked. "It would be irresponsible for the states to pass up this opportunity to include equity into the program," says the author.

The Climate Justice Alliance's Northeast Regional members are pushing states to collect statistics on where emissions are being reduced and if the program is benefiting or worsening air quality in environmental justice areas.

According to Basav Sen, a climate policy expert at the Institute for Policy Studies, which is a member of the alliance, states are "definitely paying more lip service" to equality issues this time around. "However, the main issue with their approach to equity is that they see it as something to deal with after the emissions have occurred." And those emissions are distributed unequally."

Sen said the program should prohibit enabling polluters to save allowances for future use, in addition to tightening the emissions cap and raising the reserve trigger price.

"It renders the cap meaningless," he explained. "They should simply die." It's meant to be a means for polluters to cut their emissions in the most cost-effective way feasible. But, to be honest, we've moved past the stage where polluters' expenses are a concern. For that, we are way too far into the climate disaster." The review will go on for the rest of the year, with a draft of the amended model rule due in the fall.

(Researched, written and edited by: The Decision Maker)


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