The Regional Greenhouse Gas Initiative (RGGI) is a joint cap-and-trade program among 11 states. Its aim is to address climate change by reducing carbon dioxide emissions from a region's power sector.
RGGI was the first mandatory carbon cap-and-trade program in North America; it was and remains a bipartisan effort. It began in 2009 with nine states limiting their power plants' emissions, and now includes Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, Vermont, Virginia and New Jersey.
North Carolina would be a natural addition. Our state has coastal and low-lying areas vulnerable to sea level rise and intense rainfall as well as hurricanes, floods, droughts, and warming ocean temperatures. Climate change impacts are expected to worsen with more intense hurricanes and devastating storm surges.
What is "cap-and-trade"?
A cap-and-trade program like RGGI places an aggregate ceiling on emissions from power plants and simultaneously creates a market for the price of those emissions. In other words, there is an collective limit on emissions from all the power plants in a region, a limit that gets lower over time and forces more emissions cuts.
Fossil fuel power plants covered by a cap-and-trade system receive permits, or “allowances,” to emit carbon dioxide. One allowance is equal to one metric ton of carbon dioxide. A company that does not use all of its emissions permits can trade its unused allowances to another participant as long as the second company does not exceed its cap of allowable emissions.
The approach encourages fossil fuel companies to cut pollution quickly and provides an innovative incentive to do so.
President Biden’s climate change agenda indicates that the federal government will begin addressing climate change in a serious way. But North Carolina could move now, leading the Southeast on climate action by joining RGGI, much as it led with the 2007 Renewable Energy Portfolio Standard that required utilities to source a percentage of power from clean energy.
Duke Energy has several coal plants in North Carolina that are slated to remain operational through 2030. Coal-fired power plants are the biggest contributor to climate change in North Carolina and a major producer of toxic waste, soot, and ozone. In addition to air and water pollution, burning coal leads to harmful health impacts such as poor air quality that hurts people with diseases like asthma and heart disease.
While many utilities, including Duke Energy, have pledged to reduce their carbon footprints, the details of their promises raise doubts. The Sierra Club analyzed the top 20 utilities that generate the most power from coal (including Duke Energy), finding that they collectively have pledged to retire only 17 percent of their coal generation by 2030. In Duke's case, the difference between its fossil fuel-powered capacity and planned clean energy is the largest gap of any utility in the country (114MWh).
North Carolina’s climate vulnerability and its continued reliance on coal power makes it imperative to identify and adopt greenhouse gas reduction strategies. Joining an existing program may allow for faster action than creating a new state-specific program.
The Southern Environmental Law Center recently filed a petition to the North Carolina Environmental Management Commission (EMC) asking the EMC to initiate rulemaking for North Carolina to join RGGI. The EMC must respond this spring to the petition, filed on behalf of the North Carolina Coastal Federation and Clean Air Carolina.
What has RGGI done so far? Since it took effect in 2009, carbon emissions from power plants in RGGI states have fallen by 47 percent. A 2020 report on the investment proceeds of RGGI (paid when there is trading across participants) tracks the investment benefits throughout the region.
The lifetime benefits of RGGI investments made in 2018 include $2 billion in lifetime energy bill savings and 4.6 million short tons of carbon dioxide emissions avoided. Proceeds were primarily in energy efficiency initiatives.
By moving states within a region away from dirty fossil fuels toward clean energy, the program:
- Reduces carbon dioxide emissions and corresponding impacts on climate change and health
- Lowers the overall cost of emissions reductions by providing an economic incentive for those that can reduce emissions more, while simultaneously benefitting air quality throughout a region
- Allows revenue to be invested in energy efficiency and renewable energy
North Carolina produces more energy than the majority of other RGGI states. While North Carolina would be a major purchaser of RGGI allowances, participation in the initiative would not only help us cut emissions, but would help to incentivize greater emission reductions for all RGGI states.
The SELC petition notes that 74 percent of North Carolinians support regulating carbon dioxide as a pollutant. Gov. Roy Cooper began his fight against climate change just over two years ago with an executive order on climate and clean energy. By joining RGGI, an already successful program, the state could make considerable progress in fighting climate change and shifting to clean energy.