December 19, 2008
Imported Coal Power Could Undermine Northeast Global Warming Cap-and-Trade System
Northeast states can ensure regional agreement maximizes carbon emissions reductions by preventing dirty electricity imports
The Northeast's cap-and-trade system for global warming pollution—the first of its kind in the nation—will be compromised unless utilities are prevented from importing additional coal-fired electricity, according to a report released today by the Union of Concerned Scientists (UCS).
The Regional Greenhouse Gas Initiative (RGGI), which applies to power plants in 10 Northeastern states, does not preclude the utilities that supply electricity to Northeast homes and businesses from buying more electricity from coal-fired power plants outside the region. That could increase the carbon dioxide emissions from those plants outside the region, offsetting emissions reductions under RGGI.
"RGGI sets a national precedent for addressing global warming," said John Rogers, a UCS clean energy analyst and co-author of the report. "To ensure the initiative fulfills its potential, however, participating states must make sure that the region's utilities don't buy additional coal-based electricity from outside the region."
(For the report, "Importing Pollution: Coal's Threat to Climate Policy in the U.S. Northeast," go to: http://www.ucsusa.org/importingpollution).
Beginning January 1, a cap will go into effect on the total carbon dioxide emissions from power plants in the 10 RGGI states: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont. The total amount of emissions allowed from all plants—approximately 188 million tons—will remain the same each year through 2014, followed by a 10 percent decrease over the next four years.
Under the program, each power plant has to obtain a permit, or an allowance, for each ton of carbon dioxide it emits, which the RGGI states plan to auction quarterly. The first auction of pollution allowances, held in September, included six states and sold 12.5 million allowances. At $3.07 per allowance, the auction raised $38.5 million for participating states to fund energy efficiency and renewable energy projects. The second auction took place earlier this week and is expected to raise approximately $100 million for clean energy and efficiency programs.
Since the RGGI program does not require local utilities to purchase allowances for electricity imported to the region, its design could trigger more coal electricity imports -- and significantly more emissions from coal plants in states bordering RGGI. If plants just outside the region generated electricity at full capacity, for example, the resulting emissions would equal 350 percent of the amount the RGGI program aims to cut in its final year, the UCS report found. In another scenario, nearby coal plants currently under construction and near development could emit global warming emissions equal to 140 percent of RGGI's planned 2018 reductions. Proposed new transmission lines, meanwhile, would deliver even more "dirty" electricity.
"Fortunately, RGGI states have several options to close the door on increased coal electricity imports," Rogers said. "States could prevent local utilities from contracting with dirty energy sources. They could require utilities to account for global warming pollution from all of the electricity they sell, not just from RGGI power plants. States also could make sure that proposed transmission projects not serve as pollution delivery systems."
New Jersey is the first state to tackle this threat to RGGI reductions. Legislation enacted earlier this year requires the state's public utilities board to develop a plan to reduce the risk of increased coal-fired electricity imports and implement it by next year.
"Climate change is already affecting the region's character and economy, which is why this historic agreement is so important," said Rogers. "But RGGI states can't rest on their laurels. Importing additional coal pollution would undermine the region's progress on climate change, which is why states now must build on RGGI and put measures in place to prevent any increase in coal-fired electricity imports."
The Union of Concerned Scientists is the leading U.S. science-based nonprofit organization working for a healthy environment and a safer world. Founded in 1969, UCS is headquartered in Cambridge, Massachusetts, and also has offices in Berkeley, Chicago and Washington, D.C.
