Last month the Massachusetts Senate approved legislation that would secure the commonwealth’s current and future participation in the Regional Greenhouse Gas Initiative (RGGI) by making the cooperative program law. Gov. Deval Patrick signed the RGGI agreement last January, entering Massachusetts into a nine-state coalition plan starting in 2009 to reduce carbon dioxide emissions from larger power plants in the New England and Mid-Atlantic regions.
Under RGGI, participating states will stabilize carbon dioxide emissions at current levels from 2009 to 2015 and then proceed with a 10 percent reduction by 2019.
The RGGI agreement establishes a carbon dioxide “cap and trade” program to reduce carbon dioxide emissions. This is the nation’s first regional “cap and trade” system for greenhouse gas emissions and an important model for other states and the development of national climate-change policy.
The “cap and trade” model sets a limit on total emissions from certain power plants and requires those power plants to hold “allowances” to cover their emissions. An allowance is the right to release one ton of carbon dioxide. Emissions allowed under the cap will be divided into individual permits and allocated by each state to the power plants.
Power plants without enough allowances to cover emissions can either reduce their greenhouse gases or purchase allowances from other power plants that have successfully reduced their emissions and hold excess allowances.
All sales will be completed through a regional market auction. Proceeds will be deposited into the RGGI Auction Trust Fund. Allowance auctions will be conducted by an independent entity assigned by the DEP and the Executive Office of Environmental Affairs.
The auction fund will be used to protect municipalities whose property tax receipts might be reduced because of RGGI. It will also be used to promote energy efficiency and conservation and to promote renewable energy technologies.
Provided by the office of Sen. Pam Resor
