Regional Greenhouse Gas Initiative: States Progress on Nation’s First Carbon Cap-and-Trade Program Franz Litz Climate Change Policy Coordinator New York State Department of Environmental Conservation

2 A Note on the Science Understanding What’s at Stake for New York Brief Background on RGGI Latest RGGI News: Allocations Overview

Climate Science We know enough to act now

4 “The scientific understanding of climate change is now sufficiently clear to justify nations taking prompt action.” Joint National Academies of Science Statement June 2005

Climate Impacts Understanding What’s at Stake

6 Visit

7 The warming is already evident: –Annual average temp up 2°F since 1970; –Winter average temp up 4°F since This temperature increase is correlated to already observed changes in our region’s climate Changes projected for the future are more dramatic. A Changed Northeast Climate

8 Fewer Days with Snow Cover

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The Nation’s First Mandatory Cap-and-Trade Program for Carbon Dioxide Launch Date: Jan. 1, 2009 Regional Greenhouse Gas Initiative

April 2003 Invitation 3 Year Design Process December 2005 Memorandum of Understanding (7 States) Model Rule Complete MD & MA to Join Background

39.4 million people— (13% of US Population) 9% of U.S. Emissions 11 th largest emitter in the world $1.8 trillion economy (15% of U.S.) The Region at a Glance

13 Stabilize emissions at current levels through 2014; then reduce by 10% by 2019 ~13% below 1990 levels ~35% below business as usual Reduction Requirements

14 Firing Biomass/Biofuel a “control” method Offsets “Valve” Offsets—5 Initial Types : – Natural Gas, Propane, Heating Oil Efficiency; –Land to Forest; –Landfill Gas Capture & Combustion; –Methane Capture from Animal Operations; & –SF 6 Leak Prevention. Recognition of International Currencies RGGI Innovations

15 Allocations –States agreed to propose minimum 25% public benefit allocation in MOU –New York proposal—100% auction Deregulation means consumers bear cost of allowances even if they are given to generators at no cost Benefits of program will inure to the consumers through investments in energy efficiency and clean energy technology –Vermont will also do 100% auction; Others? RGGI Innovations

16 Emissions Market Drives Creative Solutions Carbon price will promote: – reduction in fossil fuel consumption – non-emitting electric generation – development of abatement technologies – innovation yet unknown

17 Complete RGGI Implementation Bring Maryland On Bring Massachusetts On Add Additional States—RI, PA? Link to California? Others in West Coast AZ, NM, OR, WA? Address Imports of Electricity RGGI Next Steps

18 MOU among RGGI States Welcomes Participation by Additional States RGGI + California = –24% of U.S. Population –28% of U.S. Economy –3 rd Largest World Economy –15% of U.S. Emissions –6 th Largest Emitter Worldwide RGGI + California

19 Franz Litz Climate Change Policy Coordinator NY Dept. of Environmental Conservation