The nine US states participating in RGGI have urged the EPA to adopt a flexible trading platform for its Clean Power Plan (CPP) and to encourage other states to take a mass-based approach in their emissions reduction strategies, in order to create a broader carbon market.
The states submitted joint comments to the EPA over the CPP’s Federal Plan and the Model Rule, which forms the backstop for those that fail to draw up their own plans to cut CO2 from new and existing power plants, and may also act as the template for one or more larger and possibly regional carbon markets.
“The EPA has the chance to encourage emission reduction approaches that have already proven successful. The RGGI states have seen benefits to the economy, consumer savings, and public health, while reducing power sector carbon pollution and supporting grid reliability,” the nine states said in a joint statement sent by the scheme’s operators RGGI, Inc.
The deadline for comments was on Thursday, and the EPA is due to craft its Model Rule by the summer, ahead of the first compliance period starting in 2022.
Experts have told Carbon Pulse that almost all US states are considering adopting carbon trading, which the CPP rules sought to make easier to implement by expressing all states’ targets in a mass-based, absolute emissions format.
The RGGI states called for the EPA to:
- adopt a mass-based program for the federal plan and encourage states to adopt a mass-based program in their compliance plans. They said mass-based approaches are the most cost-effective, transparent, and reliable way to achieve emission reductions;
- adopt a trading platform that is flexible and customisable to encourage broader trading markets;
- encourage auctioning and reinvestment of auction proceeds, citing the benefits of RGGI’s own re-investment of auction revenue;
- include new sources in a mass-based program, which they said would be the most effective means of preventing leakage from existing sources to new sources.
By Ben Garside – firstname.lastname@example.org