David Gahl, Pearl Gray, Nick Martin

The Clean Power Plan Puzzle: The Future of Efforts to Control Climate Pollution in the Northeast

In October 2015 the U.S. Environmental Protection Agency (EPA) finalized the first national plan to cut climate pollution from power plants. Called the Clean Power Plan (CPP), the effort requires a 32% nation-wide reduction in greenhouse gas (GHG) emissions from the power sector. The CPP also gives states multiple pathways to comply. Now states are on the clock: they must submit their individual compliance plans or signal their intent to submit multi-state plans by September 2016.The nine states participating in the Regional Greenhouse Gas Initiative (RGGI), the first market-based trading platform established to cut climate pollution from power plants in the Northeast, must now decide the future of the effort. This paper explores a few of the key issues for state regulators in the RGGI region with a special focus on New York State. We discuss the need to reset the RGGI cap to ensure progress toward New York’s and other state climate pollution reduction goals. We recommend a change to RGGI’s structure that will ensure compliance with the CPP. We discuss the EPA’s proposed Clean Energy Incentive Program (CEIP), an effort to encourage early state actions to reduce emissions. And we discuss other implementation issues with respect to linking RGGI to other mass-based state compliance plans. In brief, we recommend that the RGGI states adopt a new cap that requires at least a 2.5 percent per year reduction in region-wide GHG emissions.

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