NE states propose 30% cut in power plant emissions
Nine states, including Mass., favor lowering cap from 2020 to 2030
NINE NORTHEASTERN AND MID-ATLANTIC STATES, including Massachusetts, unveiled a proposal on Wednesday that would require power plants running on fossil fuels to cut their carbon dioxide emissions 30 percent between 2020 and 2030.
The proposal was unveiled by the Regional Greenhouse Gas Initiative, which sets an overall cap on power plant emissions in the nine states and requires plant operators to purchase allowances at quarterly auctions for each ton of carbon dioxide they emit. The auction payments incentivize power plants to cut their emissions and the proceeds returned to the states for investment in programs that further help reduce emissions.
The current annual cap for the nine states is 84.3 million tons. Under the proposal unveiled Wednesday, the cap is expected to fall to 75 million tons in 2021, and then drop by 2.275 million tons each year until 2030. The level in 2030 is expected to be 65 percent below the level in 2009, when the program started. The declining cap is likely to ratchet up the cost of allowances and, indirectly, put upward pressure on the cost of electricity.
Environmental advocacy groups hailed the decision, pointing out that states are now shouldering the burden of dealing with climate change at a time when the Trump administration is leading a federal government retreat. “Northeast governors have shown what real climate leadership looks like,” said Dan Sosland, president of Acadia Center, in a statement.
Dan Dolan, president of the New England Power Generators Association, said he was confident the carbon dioxide emission reductions called for in the Regional Greenhouse Gas Initiative proposal are achievable. He said the shift away from coal-fired power plants and the development of more efficient natural gas-fired plants makes attainment of the goals possible.
The price of emission allowances has been steadily dropping the last few years, particularly as President Trump halted plans to more tightly regulate power generators. The auction clearing price of allowances fell from a recent high of $7.50 per allowance at the end of 2015 to a low of $2.53 per allowance in June.
Dolan urged state officials to focus on other areas of the economy for greenhouse gas reductions. He noted the transportation sector accounts for twice the emissions as power plants; buildings also generate more carbon dioxide than power generators. “This can’t be done in the electricity sector alone,” he said.
The new proposal on carbon dioxide emissions took more than a year to develop and still must undergo more review and implementation at the state level. Officials said an economic analysis of the proposal must also be done before final approval can be sought.The nine states participating in the Regional Greenhouse Gas Initiative are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont. Maryland, Massachusetts, Maine, and Vermont have Republican governors.
New Jersey dropped out of the Regional Greenhouse Gas Initiative in 2012, but many expect the state to return to the fold when Gov. Chris Christie leaves office. Virginia officials are also talking about joining the regional compact.