The Regional Greenhouse Gas Initiative
(RGGI) Carbon Dioxide Budget Trading Program
The RGGI participating states have made a commitment to continue to reduce emissions of greenhouse gases by lowering the RGGI cap. After extensive stakeholder consultation, the states have jointly updated the RGGI Model Rule that guides individual states' work on updating their state-specific CO2 Budget Trading Programs. Now the states will seek to amend the statutes and/or regulations that established their CO2 Budget Trading Programs.
The RGGI Program Review
As the nation's first market-based program to cap and cost-effectively reduce the greenhouse emissions that cause our climate to change, RGGI successfully pioneered an innovative system that benefits the environment while helping the economy. Our air is cleaner and the states' reinvestment of auction proceeds is creating jobs, saving consumers money on their energy bills and investing in the clean energy economy.
When the RGGI participating states agreed on the initial program design in 2005 they knew that, like any start up program, it should be evaluated and might need adjustment. As a result, they committed to conduct a systematic and thorough Program Review in 2012 to assess how the program was working and identify opportunities for improvement. This review took place over more than two years, during which the states gathered data on economic and electricity market trends, analyzed numerous future emission scenarios and consulted extensively with stakeholders and market experts.
Program Review findings
The states found that the RGGI program has accomplished significant environmental and economic benefits for the region.
- Region-wide emissions reduction. Emissions from power plants in the region are down by around 40 percent from 2005 levels.'
- Region-wide economic benefits. Across the RGGI region, an independent analysis concluded that investments of proceeds from the first three years of the RGGI program are resulting in $1.6 billion economic value added (in net present value (NPV); a $1.1 billion net gain for households, businesses, governments and other electricity consumers as electric bills drop over time; $765 million in savings by not paying for fuel outside the region, and 16,000 new "job years."
- Economic benefits in New York. In New York, the Regional Investment of RGGI CO2 Allowance Proceeds 2011 report found RGGI-funded programs directly benefited 2.9 million households and 7,400 businesses.
The region's progress in reducing emissions is due to a number of factors, including the price signal sent by RGGI and the region's investments in both clean renewable energy and energy efficiency. But as a result of the emission reductions, the current annual supply of allowances in the nine-state region (165 million tons) greatly exceeds demand (92 million tons of emissions in 2012). RGGI emissions allowance prices dropped to the "floor" price of $1.93 per ton, a level that no longer constrained emissions and required adjustment to the cap.
Program Review Conclusions
To continue our progress in climate protection and maintain the benefits of a market-based approach, the RGGI cap must be adjusted. This adjustment and other opportunities for improvement identified by the program review are reflected in an updated Model Rule. The RGGI states have committed to seek to amend the statutes and/or regulations that established their CO2 Budget Trading programs to conform to the provisions of the updated Model Rule, taking effect by January 1, 2014.
Text of the Updated Model Rule and other Program Review materials together with the regional REMI results can be found at the RGGI website (link on right below "Links Leaving DEC's Website").
New York State's REMI results and Customer Electricity Bill Analysis is available at the links on right listed under "Important Links."
New York State CO2 Budget Trading Rulemaking
New York State will seek to amend state regulations found in 6NYCRR parts 242 (CO2 Budget Trading Regulations), 200 (General Provisions) (DEC) and Part 507 (CO2 Allowance Auction Program Regulations). The amendment process will include availability of materials from the program review and staff availability sessions. Additional information will be available through this web page as it is developed, and ongoing notification is available through the RGGI listserv.
Materials. Final RGGI Program Review materials are available at the RGGI.org website (links on right). Draft amended regulations prepared by DEC and NYSERDA will be available on the agencies' websites.
Staff availability session. A staff availability session to present the results of the Regional Greenhouse Gas Initiative (RGGI) 2012 program review for New York State RGGI stakeholders is scheduled for Wednesday, April 17, 2013 beginning at 1:30 p.m. Presentations will include the updated RGGI Model Rule and accompanying recommendations and the regulatory process New York State will use to update its CO2 budget trading program.
The availability session will be held at Department of Environmental Conservation headquarters, 625 Broadway, Albany, in Conference Room 129. The meeting agenda and any meeting materials will be made available at this website by Friday, April 12.
Stakeholders must pre-register to attend this meeting. To pre-register, please e-mail your name and organizational affiliation by noon on Tuesday, April 16. Include the words "Will attend 4/17 RGGI meeting" in the subject line. Failure to pre-register will result in delayed admission to the building. Stakeholders will be required to present government-issued photographic identification to be admitted to the DEC building.
RGGI Listserv signup. Individuals wishing to receive notices regarding New York State programs and opportunities related to the Regional Greenhouse Gas Initiative are encouraged to use this link to subscribe to GovDelivery. Enter your e-mail address. Fill in and submit the requested information on the "New Subscriber" page. This will take you to the "Quick Subscription" page where you will see all the topics that you can receive email updates on from DEC. Scroll to the "Climate Change" category and check the box next to "Greenhouse Gases." You will receive a welcome email from DEC confirming your subscription(s).
More about The Regional Greenhouse Gas Initiative:
- New York's RGGI Stakeholder Opportunity 2011-2013 - A proposed schedule for gathering analytic material and for receiving stakeholder input in preparation for the states' 2012 RGGI program review.
- Policy DAR-12: "Sustainably Harvested" Determination for Purposes of "Eligible Biomass," Part 242 - Establishes guidelines for determinations by the Department regarding whether particular sources of forest-based woody biomass, and unadulterated wood and wood residues, are considered to be "sustainably harvested," for purposes of being considered "eligible biomass" under the CO2 Budget Trading Program, Part 242
- Lodging of Consent Decree Pertaining to New York's Regional Greenhouse Gas Initiative Regulations - Lodging of Consent Decree pertaining to New York's RGGI regulations. Notice is hereby given that, on December 23, 2009, a proposed Consent Decree in Indeck Corinth, L.P. v. Paterson et al., Index No. 5280-09 (Judge McNamara), was lodged with the Supreme Court of the State of New York, County of Albany. The Consent Decree has been approved by all parties to the litigation and has been furnished to the Court pending the public comment period that is being announced today. The Consent Decree has not yet been entered by the Court as an Order.
- Economic Effects of RGGI - The RGGI program is expected to have a small effect on electric power rates for consumers.
- How the Carbon Dioxide Budget Trading Program Works - Mechanisms used by the RGGI cap-and-trade system, and how New York State will implement them
- CO2 Emissions Offset Projects - Regional Greenhouse Gas Initiative (RGGI) CO2 Offset Allowances
- New York's Greenhouse Gas Stakeholder Opportunity 2004-2007 - The Regional Greenhouse Gas Initiative, or RGGI, is a cooperative effort by Northeastern and Mid-Atlantic states to reduce carbon dioxide emissions