RGGI/ WCI Overview.

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Presentation transcript:

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 generation industrial/commercial combustion and production – based on certain thresholds residential/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” emissions 2015-2017: 2.5% reduction 2018- : 10% reduction 2012-2014: actual emissions 2015-2020: 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?