The Regional Greenhouse Gas Initiative (RGGI), a regional cap-and-trade market launched in 2008, is considering how much lower its nine-state carbon allowance cap should be in the years ahead.
RGGI requires fossil-fuel plants of a certain size to purchase an allowance for every metric ton of carbon dioxide they emit. Since the first quarterly auction in 2008 through the most recent in March, those allowances have resulted in $2.68 billion in proceeds for participating states, including $176.1 million for Connecticut. States use the proceeds for various energy efficiency, renewable energy and environmental programs.
But clearing prices have recently fallen to their lowest levels since 2012, which the Acadia Center argues is the result of underestimating how quickly power plants could reduce emissions.
Since RGGI’s creation, actual plant emissions have been lower than the cap, which RGGI states lowered in 2014, and are now reconsidering a third change.
“The RGGI states must consider a more ambitious cap level to show that they have learned from the trends of the last eight years and that they intend to retain their role as leaders on climate action,” Jordan Stutt, an Acadia policy analyst said in a statement Thursday, ahead of a webinar in which RGGI stakeholders were set discuss three reduction scenarios.
The caps in the 2021-2030 scenarios range from 75.1 million to 76.2 million short tons per year. As they do currently, the caps would decline 2.5 percent annually, under each scenario.
Environmental groups have urged RGGI states to double that decrease to 5 percent.
This year’s cap is 84.3 million short tons, which is slated to fall to 78.2 million in 2020.
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