The finalization today of EPA’s Clean Power Plan offers Americans a clear, realistic roadmap for addressing planet-warming emissions that threaten the environment and the U.S. economy.
Most importantly, it puts states in the driver’s seat to devise innovative strategies to reduce emissions efficiently and cost-effectively. Now it's time for states to work together with businesses and cities to craft the approaches that work best for them.
Climate change is a critical challenge, and the impacts will only grow more costly if we fail to act. Last year was the warmest on Earth since we started keeping records over a century ago. During the first half of this year, it got even hotter. Climate change impacts include more extreme heat, which can exacerbate drought and wildfires, more frequent and intense downpours that can lead to destructive floods, and rising sea levels that threaten coastal cities.
New federal standards are already reducing heat-trapping emissions from the second-biggest source, transportation, by increasing the fuel economy of cars and trucks. The Clean Power Plan takes the next logical step by addressing the largest source: the electric power sector, responsible for nearly 40 percent of U.S. carbon dioxide emissions.
Many states have reached across borders to collaborate on efforts to address climate change. Across the United States and Canada, multi-state climate initiatives have been designed and implemented to reduce greenhouse gas emissions and spur public and private investment in clean energy, energy efficiency, and sustainable infrastructure. Multi-state initiatives can be more effective and efficient in reducing greenhouse gases across a broad area because they provide predictable rules and avoid duplicative processes. Click on the initiatives below to learn more:
- Regional Greenhouse Gas Initiative
- Western Climate Initiative
- Midwest Greenhouse Gas Reduction Accord
- North America 2050
- Pacific Coast Collaborative
- Transportation and Climate Initiative
Summary: The Regional Greenhouse Gas Initiative (RGGI) is the first U.S. cap-and-trade program to reduce carbon dioxide (CO2) emissions from the power sector. Currently, the program is composed of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont. Since 2009, RGGI has set a cap on CO2 emissions from power plants throughout the region. To comply, regulated entities trade emission allowances. The program is administered through RGGI, Inc., but individual state governments have enforcement authority. Following a comprehensive program review in 2012 - 2013, RGGI adjusted the program cap to achieve an annual 2.5 percent emissions reduction each year between 2014 and 2020 from estimated 2012 levels.
Each covered source is required to surrender emission allowances equal to their emissions over a three-year control period, with a partial surrender obligation due each year. The first control period covered 2009 – 2011 and covered the nine current states plus New Jersey. New Jersey withdrew from the program beginning with the second control period.
History: On Dec. 20, 2005, the governors of seven Northeast states announced the creation of the Regional Greenhouse Gas Initiative (RGGI). The governors of Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont signed a Memorandum of Understanding (MOU) agreeing to implement the first mandatory U.S. cap-and-trade program for carbon dioxide.
On Jan. 18, 2007, Massachusetts Gov. Deval Patrick signed the RGGI MOU, thereby committing his state to join RGGI. On Jan. 30, Gov. Donald Carcieri announced that Rhode Island would join RGGI. On April 6, 2006, Maryland Gov. Robert L. Ehrlich Jr. signed into law the Healthy Air Act. The bill required the governor to include the state in RGGI by June 30, 2007. Maryland became the 10th official participating state in April 2007 with Gov. Martin O'Malley's signing of the RGGI MOU.
In May 2011, New Jersey announced in that it would be exiting the program, a move that was complete by the beginning of 2012. The RGGI program underwent a prescribed program review in 2012, and states adopted an updated model rule in 2013. A key focus of the review was a dramatic drop in covered emissions from 2005. This was a result of market forces and decreased economic activity making emissions much lower than the cap. Member states agreed to lower the cap from 165 short tons of CO2 in 2013, to 91 million short tons in 2014. The cap decreases annually by 2.5 percent until 2020, then remains constant. RGGI is undertaking another program review in 2016.
According to the 2014 RGGI Monitoriing Report, the annual average carbon dioxide emissions from RGGI electric generation sources were 35.7 percent lower in 2012-2014, compared to the base period of 2006-2008. Additionally, the annual average carbon dioxide emissions rate and the electric generation output for these sources decreased 19.8 percent and 15.8 percent respectively, as compared to the 2006-2008 base period. Relative to 2005 emissions, more than 45 percent reductions in CO2 emissions are projected from the electric power sector by 2020. A study released in July 2015 shows that RGGI has resulted in net economic benefits of $1.3 billion to participating states during the second compliance period (2012-2014). These benefits come in large part from the use of auction proceeds to address state policy objectives related to energy efficiency, renewable energy, and customer bill reductions.
Summary: The Western Climate Initiative (WCI), was initially formed as a collaboration of jurisdictions working together to identify, evaluate, and implement emission-trading programs at a sub-national level. In November 2011, WCI transitioned into WCI, Inc., a nonprofit corporation that provides administrative and technical assistance to support the implementation of state and provincial greenhouse gas emission trading programs. The State of California and the Provinces of British Columbia, Ontario, and Quebec are current participating jurisdictions.
Under the auspices of WCI Inc., California and Quebec linked their cap-and-trade programs on Jan. 1, 2014. WCI, Inc. manages the Compliance Instrument Tracking Service System, administers allowance auctions, and facilitates independent market monitoring of allowance auctions. As of 2016, the state of California and the provinces of British Columbia, Ontario, Quebec, and Manitoba continue to work together through the WCI to develop and harmonize their emissions trading program policies.
History: On Feb. 26, 2007, Governors Janet Napolitano of Arizona, Arnold Schwarzenegger of California, Bill Richardson of New Mexico, Ted Kulongoski of Oregon, and Christine Gregoire of Washington signed an agreement establishing the WCI, a joint effort to reduce greenhouse gas emissions and address climate change. Later, the governors of Utah and Montana, as well as the premiers of British Columbia, Manitoba, Ontario, and Quebec joined as partners. An additional 14 jurisdictions joined as observers, including Alaska, Colorado, Idaho, Kansas, Nevada, and Wyoming in the United States; Nova Scotia and Saskatchewan in Canada; and Baja California, Chihuahua, Coahuila, Nuevo Leon, Sonora, and Tamaulipas in Mexico.
The WCI was built on the efforts of individual participating states and provinces, as well as two regional predecessors: the Southwest Climate Change Initiative of 2006, consisting of Arizona and New Mexico, and the West Coast Governors’ Global Warming Initiative, consisting of California, Oregon, and Washington.
According to the the initiative’s MOU, WCI Partners agreed to jointly set a regional emissions target and establish a market-based system—such as a cap-and-trade program covering multiple economic sectors—to help meet this target. In August 2007, the WCI announced its regional, economy-wide greenhouse gas emissions target of 15 percent below 2005 levels by 2020, or approximately 33 percent below projected business-as-usual levels. The regional target was designed to be consistent with existing targets set by individual member states and did not replace these goals. Emissions covered by the target included the six primary greenhouse gases identified by the United Nations Framework Convention on Climate Change (UNFCCC): carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.
In September 2008, the WCI released Design Recommendations for a Cap-and-Trade Program, with an envisioned program start date of January 2012. The program was designed to cover emissions from the electricity sector and large industrial and commercial sources from 2012, and to also cover emissions from transportation and other residential, commercial, and industrial fuel users beginning in 2015. In July 2010, the WCI Partners released the Design for the WCI Regional Program, a comprehensive strategy that built upon the recommendations released in 2008 to reduce greenhouse gas emissions, stimulate development of clean-energy technologies, create green jobs, increase energy security, and protect public health. The strategy provided the roadmap to deliver on the regional greenhouse gas emission target established in 2007, and represented the culmination of two years of work by seven U.S. states and four Canadian provinces.
Summary: The Midwestern Greenhouse Gas Reduction Accord (MGGRA) is a commitment launched in 2007 by the governors of six Midwestern states and the premier of one Canadian province to reduce greenhouse gas emissions through a regional cap-and-trade program and other complementary measures. Members of MGGRA are not currently pursuing their greenhouse gas goals through the accord.
History: On Nov. 15, 2007, the governors of Illinois, Iowa, Kansas, Michigan, Minnesota, Wisconsin, as well as the premier of Manitoba, signed the Midwest Greenhouse Gas Reduction Accord (MGGRA) as full participants. The states of Indiana, Ohio, and South Dakota joined the agreement as observers. On November 27, 2008, the province of Ontario also joined as an observer. Under the accord, members agreed to establish targets for greenhouse gas emission reductions that were consistent with states’ targets, and to complete the development of a proposed cap-and-trade agreement and model rule. This resulted in the release of a final model rule in April 2010, which detailed a cap-and-trade program designed to reduce greenhouse gas emissions by 20 percent below 2005 levels by 2020, and 80 percent below 2005 levels by 2050. After releasing the final model rule, the states and province in MGGRA did not continue to pursue their greenhouse gas goals through the accord.
Summary: A diverse array of states and provinces launched North America 2050: A Partnership for Progress (NA2050) in March 2012. NA2050 participants committed to policies to move their jurisdictions toward a low-carbon economy while creating jobs, enhancing energy security, protecting public health and the environment, and demonstrating climate leadership. NA2050 was a multi-state, multi-regional collaborative working toward mitigating the impacts of climate change and advancing clean energy, carbon capture and sequestration, and industrial energy efficiency benchmarking. The Center for Climate and Energy Solutions (C2ES) served as one of five nonprofit advisory groups for the NA2050 partnership. NA2050 became inactive in 2014.
History: NA2050 was the successor to the 3-Regions Initiative, a collaboration among members of the three North American regional cap-and-trade programs: the Midwestern Greenhouse Gas Reduction Accord, the Regional Greenhouse Gas Initiative, and the Western Climate Initiative.
NA2050 was composed of six working groups, which collectively facilitated dialogue among governments, private sector entities, NGOs, and academic institutions. Each working group provided topical support focusing on the different aspects of the energy, climate, and economic challenges facing the participating jurisdictions. C2ES was lead advisor to the Industry 2050 Working Group and the Sequestration Working Group.
Summary: Established in 2008, the Pacific Coast Collaborative (PCC) is a cooperative agreement among the leaders of Alaska, British Columbia, California, Oregon, and Washington to leverage clean energy innovation and low-carbon development to reduce the effects of climate change on the regional economy. Together, the PCC jurisdictions comprise 54 million residents, with a total gross domestic product of $3 trillion. Through the PCC, leaders from participating jurisdictions coordinate, propose, and adopt policy frameworks aimed at generating investments in renewable energy, climate resilience, low-carbon transportation infrastructure, and environmental conservation. Unlike its larger regional counterparts such as the Midwestern Governors Association, the PCC is focused on low-carbon development, while emphasizing coordination of state-level climate policies to achieve the broader goals presented in PCC agreements.
History: The PCC was established on June 30, 2008, to strategically confront the economic risks posed by climate change to the Pacific Coast region. The original agreement signaled a commitment by each jurisdiction to deploy more renewable energy and to promote environmental and coastal conservation. On Feb. 12, 2010, the PCC issued Vision 2030, outlining the group’s efforts to lead North America in clean energy innovation, climate adaptation, and sustainable infrastructure. The plan centers on increased deployment of solar, wind, geothermal, hydro, and tidal energy, as well as projects geared toward widespread adoption of energy-efficient technology. It introduces a plan to develop high-speed rail infrastructure between San Diego and Vancouver, B.C., as well as establish fuel-efficiency benchmarks and permitting standards for vehicles. In addition, the plan acknowledges the important role of a regional network of climate change scientists, researchers, and policy makers in building resilience to climate change in the region whilst offering new economic opportunities.
On Nov. 14, 2012, the PCC announced a joint effort between California, Oregon, Washington, and the province of British Columbia to enable investments in sustainable infrastructure projects through the creation of the West Coast Infrastructure Exchange. By reducing costs through the bundling of projects, partnering with innovators in other regions, and connecting public entities with private capital, the exchange will help the region meet infrastructure investment needs estimated at $1 trillion over the next 30 years.
On Oct. 18, 2013, the PCC signed the Pacific Coast Action Plan on Climate and Energy, a nonbinding agreement to align climate regulations and market-based measures in each member jurisdiction. The plan presents a number of policies to promote clean energy deployment, carbon pricing, revised regional greenhouse gas reduction targets for 2030, and low-carbon transportation. Several provisions highlight the need for regional cooperation to reduce greenhouse gas emissions, such as those supportive of an integrated electrical smart-grid to support increased renewable generation, and the continued deployment of high-speed regional rail line along the Pacific Coast.
Summary: The Transportation Climate Initiative (TCI) is a collaboration of twelve Northeast and Mid-Atlantic jurisdictions launched in 2010, to develop a clean energy economy and reduce greenhouse gas emissions in the transportation sector. The TCI aims to expand safe and reliable transportation options, attract federal investment, lower transportation costs, improve overall air quality and public health, and mitigate the transportation sector's impact on climate change. The TCI consists of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and the District of Columbia. Transportation currently accounts for roughly 40 percent of greenhouse gas emissions in the U.S. Mid-Atlantic and Northeast.
History: On June 16, 2010, eleven Mid-Atlantic and Northeast states and the District of Columbia announced a Declaration of Intent for the TCI. The jurisdictions established the Transportation, Energy, and Environment Staff Working Group to direct the initiative's planning and seek public and private funding for projects. The Georgetown Climate Center facilitated the initial meeting of the TCI and continues to support the effort.
On June 7, 2011, the TCI jurisdictions agreed to work cooperatively in support of sustainable communities, through the enhancement of transportation policies that combined smart growth land use planning with sustainable development concepts. In support of this agreement, the Georgetown Climate Center and Rutgers University’s Bloustein School of Planning and Public Policy produced research papers examining 11 potential indicators that could be used to measure progress towards sustainable communities.
On Oct. 19, 2011, the TCI jurisdictions announced the creation of the Northeast Electric Vehicle Network, bringing together companies, organizations, and jurisdictions to lay the groundwork, both in terms of infrastructure and planning, for the region to lead in the deployment of electric vehicles. Since its creation, the Northeast has seen an increase in the number of public electric vehicle charging stations and vehicle deployment, with the TCI also active in providing planning and policy support to help states become more electric vehicle ready.
Less than a week after Senate Democrats decided that including cap and trade in an energy bill was too ambitious for this year, the Western Climate Initiative (WCI) forged ahead with a blueprint for its own such program. Seven U.S. states and four Canadian provinces, which together represent 13 percent of U.S. and 50 percent of Canadian greenhouse gas emissions, have compiled a detailed plan for implementing a market-based system to reduce greenhouse gas emissions in their region to 15 percent below 2005 levels by 2020. The plan is an elaboration on the design recommendations released by the same states and provinces in 2008.
As we enter the dog days of August in Washington, it’s become evident that states must continue to push forward with their own efforts to combat climate change. At the regional, state, and local level, public policy is being formed to reduce greenhouse gas (GHG) emissions while maintaining the right balance between protecting the environment and growing the economy. But many states are being forced to make tough decisions using limited resources, and for some, this November’s election could be pivotal for setting the future course of the effort.
If you’re concerned that climate change action ended with Senator Reid’s decision to exclude a cap on GHG emissions from energy legislation this summer, rest assured that action in the U.S. is ongoing and growing in many areas. While Senate inaction has caused the Washington policy community to turn greater attention to potential EPA climate action and the related legal ramifications, it’s important to recognize the valuable work in practice at the state level.
For instance, carbon dioxide (CO2) from electricity in ten Northeast and Mid-Atlantic states has been capped since January of 2009; the regional cap-and-trade initiative, known as the Regional Greenhouse Gas Initiative (RGGI), will reduce CO2 from electricity by 10 percent by 2018. Many believed that RGGI would be a model for a national cap on utilities with legislation, which may still be the case once climate legislation resurfaces.
Another regional effort, the Western Climate Initiative (WCI), recently released a comprehensive strategy to reduce GHG emissions by 15 percent below 2005 levels by 2020 at a net savings of $100 billion. Furthermore, states have repeatedly taken action that aims to reduce GHG emissions for many years. Below is a small sample of recent action from our website’s section on States News.
Figure 1: States have taken plenty of action over the past two years while Congress considered different climate-related bills.
It is not all good news, though. The ongoing economic recession has led some states to dial back their support for climate change action for the immediate future, while “climategate” has led others to openly question climate change science (all scientists involved in the controversy have been exonerated of any wrongdoing).
Arizona’s governor issued an Executive Order that put off indefinitely the state’s participation in the WCI’s cap-and-trade program set to begin in 2012, citing the recession. Utah’s legislature urged the U.S. EPA to “halt its carbon dioxide reduction policies and programs and withdraw its ‘Endangerment Finding’ and related regulations until a full and independent investigation of climate data and global warming science can be substantiated.” Lastly, a ballot initiative in California could permanently delay implementation of the state’s landmark global warming law (AB-32), citing the law’s effect on the economy despite the state’s own analysis that shows the bill will be a net benefit for jobs, personal income, and overall economic production. The fight over this ballot initiative will be significant and most expect a close vote in the fall. A recent poll has California voters rejecting the ballot initiative, but only by a small margin.
Despite these lapses, dozens of states spread across every region of the country remain leaders on climate change, energy independence, and clean energy economic policies. No matter what happens in Congress this year or after the election in November, action on climate change will continue throughout the United States. The states have long been known as incubators of public policy, and their efforts to reduce GHG emissions remain powerful examples of states taking the lead.
Nick Nigro is a Solutions Fellow
On Monday, members of the three North American regional greenhouse gas reduction programs met in Washington D.C. to discuss potential areas for collaboration, and to send a clear signal to Congress as it debates climate legislation: these regional initiatives – and state leadership in general – are not going away. Representatives from the various U.S. states and Canadian provinces participating in the northeastern Regional Greenhouse Gas Initiative, the Western Climate Initiative, and the Midwestern Greenhouse Gas Reduction Accord traded information with one another and with representatives from federal agencies on the status of their respective programs, and explored paths for working together on carbon offset design, complementary GHG reduction policies such as energy efficiency measures, and possible linkages among their existing and developing carbon markets. Members of the regional initiatives also took their message to Capitol Hill, where they briefed press and Congressional staff on their initiatives, their intention to continue developing these programs, and their strong preference for federal cap and trade policy.
It was clear from these discussions that the states are moving ahead regardless of what happens at the federal level. All of the states represented support a strong, rigorous federal cap-and-trade program to reduce greenhouse gases (GHGs), but should such a program fail to materialize, the states and the regional initiatives will continue to move ahead with the development and implementation of their own trading programs, and potentially move to link these programs. When 23 states – representing 48 percent of the U.S. population, over half of U.S. GDP, and 37 percent of U.S. GHG emissions – and their partners in Canada sit down to talk about uniting their efforts to reduce emissions, it is clear that the choice is no longer between having a federal climate program or not; it is between having comprehensive climate legislation designed and negotiated in Congress, or having a de facto national North American carbon market driven by these state efforts, working in concert with regulations issued by federal agencies. States strongly prefer a federal trading system, but as far as they’re concerned, the foundation for a national cap-and-trade program has already been laid.
The states and regions also made clear that as they move ahead, they want to form a strong partnership with the U.S. EPA and other federal agencies, regardless of what happens with federal legislation. EPA is already moving to regulate greenhouse gases (as evidenced by the recently announced endangerment finding, and the tailoring rule and vehicle standards released earlier this year) and the states will play a key role in the implementation and enforcement of these new regulations. Even with federal climate legislation, states will play a key role in its implementation.
In addition, the states made clear that any federal plan needs to allow them the flexibility to continue crafting effective greenhouse gas reduction policies that can complement cap and trade, such as energy efficiency and renewable energy standards. For many at Monday’s meeting, preserving states’ ability to achieve emissions reductions beyond what is mandated at the federal level is an imperative; it is not clear to them that pending federal legislation and the tools currently available to the U.S. EPA under the Clean Air Act can achieve the levels of GHG reductions required, and that it may fall upon the states to make up the difference through policy innovation.