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From the November 2007 issue
New York Issues Draft Regulations for Cutting-Edge Initiative to Reduce Greenhouse Gas Emissions
Under groundbreaking draft regulations recently established by Governor Spitzer, New York State power plants would have to buy enough carbon credits or allowances (one allowance per ton of emissions) to cover their emissions in a flexible, market-based system.
In December of 2005, New York State entered into an historic agreement with 10 Northeastern and Mid-Atlantic states to reduce greenhouse gas (GHG) emissions from power plants, which nationwide produce a sizable percentage-40%-of all GHG emissions. Under the agreement, the governors of these states have committed to cap and reduce carbon dioxide (CO2) emissions from power plants in their states-and reduce those emissions 10 percent by 2019. In addition to New York, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Rhode Island, and Vermont are participating in RGGI.
Under the agreement, annual emissions of carbon dioxide from New York power plants would be capped at 64 million tons from 2009 through 2014. In 2015 and in each of the subsequent three years, the cap will be reduced by 2.5 percent for an overall reduction of 10 percent. Without RGGI, current models project emissions to increase 25 percent over the same timetable
Unique Auction
In a major departure from previous programs, the state will not simply give away allowances to power plants. From the start, companies will have to buy allowances through an auction for every ton of carbon dioxide they emit. Proceeds from the auction would go toward energy efficiency programs and renewable energy projects. New York was the first state to advocate auctioning off 100 percent of its pollution allowances-a strategy that most other RGGI states likely will follow.
Offsets
Under Governor Spitzer's draft regulations, power plants will have to procure enough allowances or "offsets" to meet their actual emissions over a three-year period. Offsets are greenhouse gas emission-reduction projects from outside the electricity sector. To ensure that the cost of compliance does not increase dramatically, the state would permit generators to use offsets to account for up to 3.3 percent of their overall emissions.
Public Comment
A 60-day public comment period on the draft regulations will end on December 24, 2007. Public hearings will be held on December 10 in Albany, December 11 in Ray Brook, December 12 in New York City and December 13 in Avon. The draft regulations are available at: http://www.dec.ny.gov/regulations/38974.html.
