1. RGGI/ WCI Overview

2. 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

3. Regional Greenhouse Gas Initiative (RGGI)
Western Climate Initiative (WCI)
caps and distribution
: “actual” emissions
: 2.5% reduction
: 10% reduction
: actual emissions
: 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

4. 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)

5. 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%

6. 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

7. 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?

8. 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

9. 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?