The Regional Greenhouse Gas Initiative: Compliance with EPA s Clean Power Plan

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2 The Regional Greenhouse Gas Initiative: Compliance with EPA s Clean Power Plan The Future of RGGI Center for Strategic & International Studies June 4 th, 2015 Jordan Stutt Policy Analyst, Clean Energy Initiative Acadia Center

3 Acadia Center Environmental Policy, Research, and Advocacy Northeastern Based Non-profit NGO Boston, MA / Providence, RI / Rockport, ME / Portland, ME / Hartford, CT / Ottawa, ON, Canada Program Areas Energy Policy Climate Change Transportation and Diesel Forest Practices and Land Use

4 Overview EPA s Clean Power Plan RGGI as Compliance Pathway RGGI Benefits Program Modifications

5 EPA s Clean Power Plan (CPP) Proposed Rule released June 2014 Reduce CO 2 emissions from the power sector 30% from 2005 levels by 2030 Final Rule expected to be issued this August EPA issues state-specific targets, set according to four building blocks States given flexibility to meet those targets in the way that best suits their energy needs

6 RGGI as CPP Compliance Pathway Low-cost method of reducing harmful emissions from the power sector EPA taking steps to facilitate regional, mass-based trading Clear demonstration of compliance Flexibility for market participants Revenue for reinvestment Preserves state control Proven record of success

7 Million Short Tons CO2 RGGI Performance - Emissions Basis for setting initial cap Sources: Acadia Center analysis of data from RGGI, Inc. and EPA Actual RGGI Emissions Initial RGGI Cap (165m Tons) New Cap (91m Tons) Projected Emissions Actual 2014 emissions of 86.4m tons fell 5% below the new cap, and 11% below projections. 7

8 RGGI Performance - Prices Electricity prices down since RGGI launched RGGI State Electricity Prices, 2008 and 2014 (Cents/kWh) CT DE MA MD ME NH NY RI VT RGGI % Change -5% -8% -6% -7% -8% 3% -1% -2% 18% -2% Source: EIA Reinvestment of revenue in energy efficiency and clean energy contributes to downward price pressure

9 RGGI Performance - Economics First 2.5 years of operation $1.6 billion in net economic growth $1.1 billion in energy bill savings 16,000 job years of employment Source: The Economic Impacts of the Regional Greenhouse Gas Initiative on Ten Northeast and Mid-Atlantic States, available at: Source: RGGI, Inc., Investment-RGGI-Proceeds- Through-2013.pdf

10 Breaking the Link Emissions vs Growth in RGGI and non-rggi states Acadia Center analysis of data from the Federal Reserve Bank of Philadelphia, RGGI, Inc., and EPA

11 Health Benefits

12 RGGI Modifications Upcoming 2016 RGGI Program Review Opportunity to make improvements Program reforms will likely be necessary to demonstrate compliance with the CPP Extend the cap to 2030 Adjust the trajectory of the cap Revise the Cost Containment Reserve

13 Million Short Tons CO Complying with the CPP: Cap Extension EPA Mass-Based Target for RGGI States Current RGGI Cap 2020 Cap Held Constant Sources: Acadia Center analysis of data from RGGI, Inc. and EPA 78.2 million tons 63.6 million tons

14 Million Short Tons CO2 Complying with the CPP: Cap Trajectory Acadia Center analysis of data from RGGI, Inc Cap: Cap: 54.6 Cap for RGGI States (2.5% Annual Reduction) Cap for RGGI States (Fixed Quantity Reduction) If the cap continues to 2050, the current trajectory results in four times the allowable emissions Cap: Cap: 9.1

15 Million Short Tons CO2 100 Complying with the CPP: Cost Containment Reserve (CCR) The projected 2030 RGGI Cap with CCR allowances would be 64.6 million tons, which is greater than the 63.6 million short tons that EPA has offered as the mass-based target for the RGGI states Sources: Acadia Center analysis of data from RGGI, Inc. and EPA EPA Mass-Based Target for the RGGI States

16 Million Short Tons CO RGGI and Virginia Sources: Acadia Center analysis of data from RGGI, Inc. and EPA The projected 2030 RGGI cap for the current RGGI states plus Virginia would be adequately stringent to demonstrate compliance with EPA s Clean Power Plan. EPA Mass-Based Target for RGGI States plus Virginia EPA Mass-Based Target for RGGI States

17 Contact Information Jordan Stutt Policy Analyst, Clean Energy Initiative (617) x105 Boston, MA Hartford, CT New York, NY Providence, RI Rockport, ME Ottawa, ON, Canada

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