Earth Equity News

Northeast Greenhouse Gas Initiative Could Undermine Cap-and-Trade Concept. By Felicity Barringer and Kate Galbraith, NYTimes, September 15, 2008. "Ten states from Maryland to Maine are about to undertake the nation's most serious effort yet to tackle climate change, putting limits on carbon dioxide emissions from utilities and making them pay for each ton of pollutants... But already there are worries that it may fail to reduce pollution substantially in the Northeast, undermining a concept that is being watched carefully by the rest of the country, by Congress and by European regulators. The Regional Greenhouse Gas Initiative, or RGGI, will cap emissions for 233 plants. By putting a price on the carbon dioxide they emit, it gives plants a financial incentive to clean themselves up, with the proceeds channeled to energy-saving and renewable energy programs in each state. The states will set their own limits, with each issuing tradable permits, or allowances, for carbon pollution. On Sept. 25, utilities will start bidding at auction for allowances, which they can later sell... But the emissions cap was based on overestimates of carbon dioxide output, which has dropped sharply from 2005 to 2006 and is on a lower trajectory than anticipated. So auction demand may be weak at the start, with millions of allowances the states planned to sell not immediately needed. And with the cap on emissions most likely to be higher, at least initially, than the plants' actual carbon-dioxide output, it may be many months before utilities have an incentive to cut pollution."