Gov. Peter Shumlin and other regional Governors today announced that Vermont and the Northeast's role in tackling climate change is being strengthened with a new limit on carbon emissions. The nine states that make up the Regional Greenhouse Gas Initiative, or RGGI, announced that the annual cap on emissions will be reduced nearly 40 percent from 165 million tons to 91 million tons in 2014, and will decline 2.5 percent per year through 2020.
"Climate change is the single greatest challenge to our future and to the Vermont way of life," Gov. Peter Shumlin, D-Vt., said. "Capping emissions from fossil-fuel power plants is one important step we can take, and I am proud that Vermont is again taking the lead to improve a program that is just one of the many climate success stories that we are going to need."
The Governor added, "In the wake of Tropical Storm Irene and Hurricane Sandy it is clear we simply do not have time to argue forever about what should be done. We know what to do and the RGGI program is doing it -- reducing emissions and helping us kick our dependence on fossil fuels."
The RGGI states agreed to lower the cap after emissions in the region dropped almost 40 percent below the current cap due in large part to reductions in electricity demand from energy efficiency, lower natural gas prices and milder weather.
"The economic slowdown in 2008-09 had an effect on reducing emissions, but as the economy has begun to pick up in the northeast, it is the reinvestment of the proceeds from the auction of RGGI allowances in energy efficiency and the switch to natural gas that have lead the decrease in carbon emissions in the region," Natural Resources Secretary Deb Markowitz said. "The program is a success, adding billions in economic value to the region and saving more than $700 million by not buying fossil fuel from outside the region."
In Vermont alone, the RGGI program has generated $7 million to date, almost all spent on energy efficiency and fuel-saving programs that have provided benefits directly to Vermonters and helped reduce emissions across the state.
Along with reducing the cap, the RGGI states have agreed to a number of changes to the program, including adjusting the cap to account for existing unsold allowances, establishing a cost containment mechanism, and adding a forestry offset category that would enable power generators to meet a part of their obligation by investing in forestry.
Each of the states in RGGI will now propose the agreed-upon changes for statutory or regulatory approval based on the state's independent legal authority and process. The nine states that comprise the Regional Greenhouse Gas Initiative (RGGI) are Connecticut, Delaware, Maine, Massachusetts, Maryland, New Hampshire, New York, Rhode Island, and Vermont.
RGGI is a collaborative effort to cost-effectively reduce carbon dioxide (CO2) emissions from the power sector by requiring generators to purchase allowances equal to their emissions of carbon dioxide.