Energy Committee Update
February 7, 2013
Staff Contact: Darren Suarez
Today RGGI Inc. released an updated RGGI Model Rule and Program Review Recommendations Summary. The Updated Model Rule will guide the RGGI states as they follow state-specific statutory and regulatory processes to propose updates to their CO2 Budget Trading Programs.
- A reduction of the 2014 regional CO2 budget, “RGGI cap,” from 165 million to 91 million tons; a reduction of 45 percent. The cap would decline 2.5 percent each year from 2015 to 2020.
- Additional adjustments to the RGGI cap from 2014-2020. This will account for the private bank of allowances held by market participants before the new cap is implemented in 2014. From 2014-2020 compliance with the applicable cap will be achieved by use of “new” auctioned allowances and “old” allowances from the private bank.
- Cost containment reserve (CCR) of allowances that creates a fixed additional supply of allowances that are only available for sale if CO2 allowance prices exceed certain price levels ($4 in 2014; $6 in 2015; $8 in 2016; and $10 in 2017; rising by 2.5 percent, to account for inflation, each year thereafter).
The Business Council of New York State does not support jurisdictionally imposed costs on firms that competitors in other localities do not have to similarly bear to address matters of global concern. Proponents of a regional approach to greenhouse gas (GHG) reduction may try to question The Business Council’s commitment to addressing global warming. Our comprehensive concerns about this program are rooted in the inefficiency of the program itself to address climate change, balanced with the price tag of the program.
Many of The Business Council’s members have committed significant resources to reducing or removing sources of the release of GHG. Additionally, many members of The Business Council have demanded “prompt enactment of national legislation in the United States to slow, stop and reverse the growth of greenhouse gas emissions over the shortest time reasonably achievable.” The Business Council agrees that human actions may contribute to climate change, but The Business Council will not embrace out of fear a myopic single-sector, approach to global matters. Clearly, more efficient and effective solutions to addressing the release of GHG must be part of the discussion. The Business Council comments are available here.
The Business Council will hold an energy committee next week TBD. The meeting will be webcasted.