The Regional Greenhouse Gas Initiative (RGGI) and the New York CO 2 Budget Trading Program Proposal

Transcription

1 The Regional Greenhouse Gas Initiative (RGGI) and the New York CO 2 Budget Trading Program Proposal David J. Shaw, Director Division of Air Resources New York State Department of Environmental Conservation NACAA Fall Membership Meeting October 30, 2007

2 Regional Greenhouse Gas Initiative (RGGI) The Nation s First Mandatory Cap-and-Trade Program for Carbon Dioxide (CO 2 ) Launch Date: Jan. 1, 2009

3 Background April 2003 Invitation 3 Year Design Process December 2005 Governor s MOU (7 States) Model Rule Complete MA,RI and MD joined in 07 D.C. to join?

4 How Does RGGI Work? Each state has an emissions cap p( (tons of CO 2 2) States issue allowances to the regulated sources, one per ton, up to the amount of the cap (Initial New York cap 64,310,805 tons) Each source must cover its emissions with allowances Allowances can be traded

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6 Reduction Requirements Stabilize CO 2 emissions at current levels through 2014; Reduce CO 2 emissions 10% by 2019 ~13% below 1990 levels ~16% below business-as-usual

7 RGGI Program Start Date: January 1, 2009 Covers 25+ Megawatt Electric Generating Units Compliance obligation: cover emissions with allowances and offsets at the end of each 3-year compliance period ( , , etc.)

8 RGGI Program A minimum of 25% of allowances to be auctioned for Consumer Benefit and/or Strategic Energy Purpose Proceeds to be invested in energy efficiency and/or clean energy technologies Benefits of program go to consumers New York to auction nearly all allowances 1,500,000 tons long term contract set-aside 700, tons voluntary renewable energy market set-aside

9 Additional Market Flexibility Offsets or Project-Based Reductions Methane (CH 4 ) Capture from Farms Conversion of Land to Forest End-Use Energy Efficiency Projects SF 6 Gas Leak Prevention in Electricity Distribution Landfill Gas Capture at Small Landfills

10 Source Compliance Requirements Start Date: January 1, 2009 Permit Requirements: Each unit must have a permit that requires the source to comply with the requirements of the program. Allowance Accounts: Each source must designate only one account representative, and only one alternate representative. Allowance True-Up : Each source must cover its emissions with CO 2 allowances at the allowance transfer deadline (March 1), after the control period ends (3 years, unless extended).

11 Source Compliance (cont d.) Limits on use of offsets at true-up: A source may cover up to 3.3% of its emissions with CO 2 offset allowances. In case of a stage one trigger event (spot price for allowance is $7 or more) a source may cover up to 5%; in case of a stage two trigger event (spot price is $10 or more) a source may cover up to 10%. Compliance certification: Each account representative must file a compliance certification at the end of each compliance period (referred to as a control period in the proposed rule).

12 Source Compliance (cont d.) Emissions Monitoring, Reporting and Recordkeeping: Each source must monitor its emissions consistent with existing practice under existing federal rules, and file quarterly emissions reports with the states. Records must be maintained for ten years by the source for inspection by the state.

13 RGGI Next Steps Adopt regulations MA and ME have proposed their regulations and their comment periods have closed. NY proposed Parts 242 and 507 on October 24, 2007, accepting comments through December 24, Implementation of RGGI and the New York CO 2 Budget Trading Rule Continue development of Regional Organization Develop and implement Emission Allowance Tracking System Development RGGI auction platform

14 What else has NY done? 6 NYCRR Part 218 Vehicle Emission Standards 15 by 15 ACl Clean Energy Strategy t for New York

15 6 NYCRR Part 218 NYSDEC has amended 6 NYCRR Part 218 to revise the existing low emission vehicle (LEV) program in an effort to reduce GHG emissions. These changes are based on modifications that California has made to its vehicle emission control program.

16 Part 218 Details Part 218 has been revised to incorporate proposed fleet average GHG emissions standards adopted by California along with credit and debit trading provisions. The new standards apply to all model year 2009 and newer vehicles and will be in CO 2 equivalent grams per mile (g/mi).

17 15 by 15 Details Reduce electricity consumption by 15% below the forecasted level in 2015 Revenue decoupling Strengthening Efficiency Standards Address New York s #1 Energy Consumer: State Government

18 Contact Information David J. Shaw, Director Division of Air Resources NYS Dept. of Environmental Conservation (518) d t