Use of Offsets in the Northeast Power Sector Carbon Cap (RGGI) Rob Sargent, Senior Energy Policy Analyst May 2nd, 2006 Hartford, CT

Offsets Are Not Necessary to Meet Modest Reduction Targets To meet the modest reductions (10% by 2019) required by the first phase of RGGI, significant offsets are not called for. Offsets should be limited to keep focus on real reductions from CO2 emitting power plants and to keep the program from being too cumbersome. 05/02/2006 Rob Sargent, National Association of State PIRGs

Rob Sargent, National Association of State PIRGs People Must Have Confidence That Offsets Will Yield Reductions Beyond Business As Usual The public cannot have confidence that offsets will achieve reductions unless it can be shown that: The pollution avoided or reduced by offsets is real and lasting, and The projects or activities eligible for offsets would not have happened as a result of other factors. 05/02/2006 Rob Sargent, National Association of State PIRGs

The Five Point Test For Offsets The final rule and any rule adopted by the states must explicitly include and define these five criteria for evaluating offsets: Real, Surplus (Additional), Permanent, Quantifiable, and Enforceable 05/02/2006 Rob Sargent, National Association of State PIRGs

Financial Additionality Financial “Additionality” must be a factor in evaluating eligible offsets. All local, state, and federal programs and subsidies must be considered. 05/02/2006 Rob Sargent, National Association of State PIRGs

Rob Sargent, National Association of State PIRGs Offsets Must Not Cause Collateral Damage or Risks to the Environment or Public Health Any final rule must ensure that offsets do not support projects or activities that pose a significant risk to public health, public safety or the environment. 05/02/2006 Rob Sargent, National Association of State PIRGs