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Massachusetts Begins the Transition to the Regional Greenhouse Gas Initiative Public Meeting held April 10; Final Regulation Expected by Early 2008
 In a move hailed by environmentalists as an important step to combat global warming, Governor Deval Patrick on January 18, 2007 moved Massachusetts forward by rejoining the Regional Greenhouse Gas Initiative (RGGI) alongside eight other states that currently comprise the compact.
Gov. Patrick's signature on a Memorandum of Understanding means all six New England states along with New York, New Jersey and Delaware (with Maryland considering joining as well) are now actively participating in the development of this market-driven cap-and-trade program.
So, what does joining RGGI mean for the immediate future?
First, in addition to capping emissions of greenhouse gases at power plants, RGGI also works to stimulate innovative off-site projects that curtail carbon dioxide and other greenhouse gases in the atmosphere.
Massachusetts brings to this battle on greenhouse gases, countless years of hard-won experience in similar air quality measures, which have helped bring about tighter emission standards and cleaner air from power plants, such as limits on carbon dioxide (CO2), as well as mercury, sulfur dioxide, and nitrogen oxides. The existing regulations at 310 CMR 7.29 promulgated in 2001, contain emission standards applicable to the Bay State's six oldest and highest-emitting power plants.
Joining RGGI means that 32 of Massachusetts' existing power plants will be subject to the regional cap on greenhouse gases.
32 Power Plants Subject to RGGI Caps
Of the 32 facilities that will be encompassed under RGGI, each is required to monitor CO2 emissions and to retire one allowance for each ton of CO2 emitted during a compliance period. Under RGGI, a compliance period is three years, which effectively averages out a plant's yearly fluctuations in emissions (the spikes and valleys).
One of the concerns voiced during debate regarding RGGI is the possibility that it would send energy costs soaring. Economic models, however, have shown that increases will be moderate, approximately $3 to $37 per residential household by 2015. An up-tick on that scale over the time period in question is minor compared to the historic volatility in the energy markets.
Putting the Brakes on Greenhouse Gas Emissions
Another feature of RGGI is the measure of flexibility that is included in the initial years (2009 to 2015). In order to ease the impact, the regional cap will initially be held at roughly the same emission levels that currently exist. These first few years in RGGI represent a braking mechanism, where a decades-long trend of consistently higher amounts of greenhouse gases is halted, until it is ultimately reversed. The regional cap begins reducing greenhouse gases by 2.5 percent a year over the next four years, meaning that by 2019, a total reduction of 10 percent will result.
Under the existing 7.29 regulations, facilities can offset their excess emissions by using "credits." Greenhouse gas credits are obtained by undertaking or paying for projects outside the plant that reduce, avoid or sequester emissions. Such projects could include, for example, burning landfill gases (methane). All these credits, however, must be verifiable and approved by MassDEP.
Conversely, under RGGI, the need to cover a facility's emissions allow for so-called "offset allowances." A limited range of emission reduction projects can qualify as offset allowances and only a limited portion of a facility's total emissions (initially 3.3 percent) can be covered with offset allowances.
Allowances under RGGI can be allocated or auctioned, but at least 25 percent of allowances must go towards consumer benefit or strategic energy purposes. Governor Patrick has already indicated that Massachusetts will auction its portion of the regional cap and that the proceeds will go toward creating greater energy efficiency, and renewable and strategic energy development.
In the effort to develop and implement this program, MassDEP is now on track to propose draft regulations by July of this year and have final regulations in place by early 2008.
Public meetings on the RGGI transition were held in March and early April to gather input from stakeholders. Additional information on RGGI can be accessed from the website http://rggi.org.
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