Regional Greenhouse Gas Initiative (RGGI) and the Western Climate Initiative (WCI)

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Regional Greenhouse Gas Initiative (RGGI) and the
Western Climate Initiative (WCI)

• Ray Hammarlund, Director of KCC Energy Programs
  Division

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RGGI
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RGGI - Scope

• CO2 specific
• Caps on all electric generators over 25MW
• Units this size comprise 95 of CO2 emissions
  from the electric generation sector
• Eligible (determined by individual states
  regulatory agency) biomass co-firing may be
  deducted from the compliance obligation

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Targets Set

• Stabilize power sector CO2 emissions over the
  first six years (2009-2014) at roughly equal to
  current emissions.
• Emissions decline set for 2.5 per year for the
  four years of 2015 to 2018.
• Total regional CO2 budget of 188,076,976 tons

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Allowances

• States will sell a significant amount or all
  allowances through a regional auction or
  otherwise.
• States have agreed to allocate a minimum of 25
  of revenues to consumer benefits programs.
• States may choose how to allocate the remaining
  75.
• NY, MA, VT, RI, CT and VT all publicly stated
  their commitment to use all revenues for consumer
  benefits programs.

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Temporal Flexibility Mechanisms

• Banking
• Extended Compliance Period
• Early Reduction Allowances

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Price Ceiling on Allowances

• Stage One if 12 month rolling average exceeds
  7 (discounted to 2005 dollars according to CPI),
  CO2 offsets will be expanded from 3.3 to 5 of
  compliance obligation (more on this in offsets)
• Stage Two if 12 month rolling average exceeds
  10 (discounted to 2005 dollars according to
  CPI), CO2 offset allowances will expand to 10 of
  compliance obligation OR compliance period will
  be extended to four years AND CO2 offset
  allowances may be awarded for permanent
  retirement of greenhouse gas allowances or
  credits.

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Offsets

• Maximum of 3.3 of total compliance, expanded for
  5 and 10 if stage one and two are met,
  respectively
• Five categories are eligible
• Landfill methane capture and destruction
• Reduction in emissions of sulfur hexafluoride
  (SF6)
• Sequestration of carbon due to afforestation
• Reduction or avoidance of CO2 emissions from
  natural gas, oil or propane end-use in the
  building sector due to end-use energy efficiency
• Avoided methane emissions from agricultural
  manure management operations

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Western Climate Initiative

• Work in process-Agreement on program design by
  August 2008 is the target.
• Regional Emissions Reduction Goal 15 below
  2005 levels by 2020
• Point of Regulation Generator Based
  (downstream)
• Regulates all six greenhouse gasses as a CO2
  equivalent reporting basis

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Western Climate Initiative
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Allocation

• Each Partner will auction a minimum percentage
  between 25 and 75 of its allowance budget
  through a coordinated regional auction process by
  which each Partner will auction allowances
  throughout the WCI region and receive the
  proceeds of the auction.

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Banking and Borrowing of Allowances

• Banking is allowed
• Borrowing is not
• No word on how proceeds may or will be spent

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Offsets

• None determined yet. August 2008 is the deadline.