As the new home of RIPIRG's environmental work, Environment Rhode Island can be contacted regarding this news release.
Environmental advocates released a report on September 10, 2004, Stopping Global Warming Begins
at Home: The Case Against the Use of Offsets in a Regional Power Sector Cap-and-Trade
Program; which calls on Northeast officials to stick to their commitment to
reduce carbon dioxide emissions from power plants. The report documents that
50% of the region’s electric sector carbon dioxide emissions come from
the 20 dirtiest plants and urges officials to reject industry proposals to allow
plant owners to avoid real emission reductions by offsetting them with reductions
in other sectors and other regions. To ensure meaningful pollution reductions,
advocates called for the region’s power plants to reduce their carbon dioxide
emissions by, at least, 10% below current levels by 2010 and 25% below current
levels by 2020.
“We were encouraged by the Northeast Governors’ commitment last year
to reduce global warming pollution from power plants,” said Cindy Luppi,
Clean Water Action Organizing Director. “However, doubt will be cast on
the commitment unless there is a guarantee that pollution will be significantly
reduced from current levels.”
Since the fall of 2003, at the direction of their Governors, officials in nine
Northeast states began working a proposal to limit carbon dioxide emissions
from power plants in the region, through a process known as the Regional Greenhouse
Gas Initiative (www.rggi.org); with a plan of unveiling a model rule by April
of 2005. While energy and environmental officials from the Northeast States
have stated their intention to cap emissions, they have not committed to any
specific target for reductions.
The plant owners and others, including the nuclear industry, are seeking to
allow the reductions at facilities other than the fossil fuel plants regulated
under the program and from activities beyond the electric industry or outside
the region to meet the cap.
“If plant owners and other interests successfully persuade officials to
create loopholes that allow the region’s biggest greenhouse gas emitters
off the hook for reducing their share of global warming emissions, the region’s
commitment to lead on reducing global warming from power plants could be meaningless,”
said Rob Sargent of the National Association of State PIRG’s. “The
more complex this rule becomes, the easier it will be for a variety of corporate
interests to game the process and zero out ultimate benefits to the climate.”
The groups are particularly concerned with the state officials’ willingness
to considering the industry “flexibility” proposals because officials
had clearly stated that the first phase of the program would only allow trading
with the cap between power plants and not allow offsets as the following excerpt
from the RGGI Goals and Principles suggests:
The program shall start simply and develop over time. The initial phase of the
cap-and-trade program will entail the allocation and trading of carbon dioxide
allowances to and by sources in the power sector only. In a subsequent phase
of the program, states and stakeholders will work together to develop reliable
protocols for offsets (i.e., creditable reductions outside the power sector)
that may be used to achieve compliance with the cap.
“By launching the RGGI process the Governors of the Northeast have embarked
on a journey that may well lead to the first multi-state regulation of greenhouse
gas pollution in the U.S., an immense accomplishment if successful.” Noted
Seth Kaplan, Director of the Clean Energy and Climate Change Program at the
Conservation Law Foundation. “However, the Govs need to resist efforts
to hijack this laudable effort by immediately engaging the question of the ‘cap’
on emissions each state would see and rejecting the hollow promise of offsets
of dubious quality.”
According to the report, the reasons for shunning offsets in the regional cap
and trade program include;
1. Offsets reduce the certainty of achieving real emission reductions since
they are difficult to verify, there is the potential for the shifting of pollution
with no actual reductions and there is a great risk that emission reductions
that would have occurred anyway are given credit.
2. Offsets reduce the associated benefits of achieving emission reductions within
the region.
a. Requiring that emission reductions be achieved at power plants within the
region (as opposed to through the purchase offsets from elsewhere) would encourage
the renovation, re-powering or closure of some of the region’s oldest,
dirtiest and least-efficient power plants.
b. In 2000, approximately half of all carbon dioxide emissions from power plants
in the RGGI region came from just 20 power plants. These plants produced twice
as much carbon dioxide per unit of power produced as the regional average. They
also emitted:
38 percent of the region’s
power-sector emissions of mercury,
64 percent of the
region’s power-sector emissions of acid rain causing sulfur dioxide,
and
47 percent of the region’s power-sector emissions of smog-forming nitrogen
oxides.
3. A strong
regional carbon cap without offsets could provide further momentum in the region’s
efforts to achieve a cleaner, more reliable electric system by making greater
use of renewable energy and improved energy efficiency. One recent estimate
by Synapse Energy Economics found that such an approach – if adopted nationally
– would reduce carbon dioxide emissions while generating $36 billion annually
in savings by 2025.
The report makes the following recommendations:
The Northeast Governors and their staff involved in the RGGI process should
stick with their originally stated goals and principles by not incorporating
the use of offsets until after the core cap-and-trade program is designed
and the model rule is adopted.
States should first determine
the cap level they can achieve without the use of offsets. Offsets or other
“flexibility” mechanisms should only be considered if the carbon
dioxide cap adopted through the RGGI process is strong – requiring emission
reductions of at least 10 percent below current levels by 2010 and 25 percent
below current levels by 2020.
Should offsets eventually be included in a later phase of the program, the Northeast
should adopt a conservative approach, requiring that:
o Offsets be generated only within states participating in the cap-and-trade
program. Offsets from outside RGGI will be difficult to enforce and allowing
them will reduce the incentive that other states have to join the program. In
addition, dollars paid by consumers in the RGGI states should go towards emissions
reductions and investments here at home.
o Strong provisions are established to assure that offsets represent real, surplus,
and enforceable emission reductions.
o Nuclear power projects and other environmentally damaging technologies not
be eligible for offsets or otherwise obtain a market advantage for being zero
emitting in any cap-and-trade system.
o Offsets be limited to no more than 5 percent of the total number of emission
allowances issued. This would allow for demonstration of the viability of an
offsets program while limiting the potential damage that a poorly designed program
could inflict.
o The benefits of offsets are shared equally between those covered by the cap
and the environment. For example, a decision to allow 10,000 tons of offsets
should be paired with a reduction in the cap of 5,000 tons.
