On June 10, 2021, the Transportation Climate Initiative Program (TCI-P) states released a final model rule creating a regional cap-and-trade-program to reduce carbon emissions from the transportation sector. We wrote about the draft model rule and its implementation challenges when it was released at the beginning of March. Now, after a two-month stakeholder engagement process, the jurisdictions working to implement the program ask stakeholders to weigh in on the guidance documents,… More
Tag Archives: cap and trade
If China Can Cap-and-Trade Auto Fuel, Why Can’t We?
Bloomberg reported earlier this week that:
China will soon unveil a mandatory cap-and-trade credit program for electric cars, starting the countdown for carmakers to be in compliance with stricter rules on emissions and fuel economy.
It’s pretty well known that China is not the world’s most transparent government. Thus, I won’t fully believe until I see it. On the other hand, it does seem pretty clear that China is intent on cracking down on motor vehicle pollution. … More
Stop the Presses: RGGI Works
When the Regional Greenhouse Gas Initiative was first implemented, there were questions regarding how much of an impact it would actually have on GHG emissions. I recall Ian Bowles, then Secretary of Environmental Affairs in Massachusetts, saying that, while reductions would happen, the main purpose was to provide a template and to demonstrate that an emissions trading program could be implemented successfully.
Those doubts were only heightened when a combination of cheap gas and the Great Recession were understood to have caused low allowance prices in the RGGI auction. … More
News Flash: Cap-and-Trade Remains the Most Efficient Way to Reduce Emissions
Notwithstanding Congressional gridlock on climate change legislation, cap-and-trade remains the tried and true efficient method for reducing air emissions. Although the acid rain provisions of the Clean Air Act are the most well-known example, the CAA also provides for cap-and-trade programs to implement its regional haze regulations. On Monday, the 10th Circuit Court of Appeals affirmed the cap-and-trade program adopted by New Mexico, Utah, and Wyoming.… More
EPA’s GHG Rule: The Really Big Picture View
As some folks may have heard, EPA proposed emission guidelines for GHG emissions from existing generating units on Monday. Obviously, the rule is a little too complicated to summarize in one blog post, though I’ll try to post on some aspects of it in coming days, if I can figure out a blog-efficient way to do so. Today, I’d like to focus on the big picture.
The RGGI Annual Report for 2013: Do We Finally Have a Real Market for Allowances?
Potomac Economics has released the Annual Report on the Market for RGGI CO2 Allowances for 2013. Based on the data in the report, it appears that a functioning market for CO2 allowances is finally developing. What’s the evidence?
• The share of allowances held by investors as opposed to compliance entities increased from 6% to 24% over the course of 2013.
• The volume of allowance futures trading rose from 2 million in 2012 to 76 million in 2013.… More
Sold-Out RGGI Auction Triggers Cost Containment Reserve (Which Sells Out, Too)
Last week’s auction of CO2 allowances by the Regional Greenhouse Gas Initiative (RGGI) was the 23rd in the program’s history, but the first auction under the new RGGI rules and reduced cap. The new rules undoubtedly explain why the auction yielded the highest sales price in RGGI history — $4 per allowance. Even more notable, it was the first auction where the clearing price was high enough to trigger the cost containment reserve (CCR). … More
Investment of RGGI Funds Sees Big Returns for States and Consumers
Through the end of 2012, the nine states remaining in the Regional Greenhouse Gas Initiative invested just over $707 million of the proceeds from the RGGI Auctions. But the impact this money will have in the future is even more impressive. According to a report released this week, these investments are projected to return more than $2 billion in lifetime energy bill savings to more than 3 million participating households and 12,000 businesses in the region. … More
RGGI: the Hot New Investment Tip?
In last week’s auction held by the Regional Greenhouse Gas Initiative (RGGI), not only did the allowances sell at $3 — the highest clearing price in four years, other than the June auction’s $3.21 — but a majority of the allowances sold to investors, rather than the large generators of electricity whose carbon dioxide emissions are regulated under RGGI. Fifty-seven percent of the allowances were bought by commodities firms,… More
Which Comes First, Innovation or Regulation?
Two seemingly unrelated stories in Wednesday’s trade press got me thinking – always dangerous – about the relationship between regulation and innovation. The first story, from Daily Environment Report, noted that House Republicans have introduced a bill which would preclude EPA from promulgating CO2 performance standards for either new or existing fossil fuel power plants until carbon capture and storage systems have been determined to be technologically and economically viable. … More
Not a Shining Moment For Congress: Two Leading Economists Note the “Sordid History” of Cap-and-Trade Legislation
I have previously blogged about how strange our politics has become, when cap-and-trade programs, previously touted by conservatives and viewed skeptically by environmentalists as a “license to pollute,” somehow become for conservatives the poster child of big government programs. It is nice when economists as respected as Dick Schmalensee and my friend Rob Stavins make the same point. I’m not sure I can put it much more succinctly than this:
It is truly ironic that conservatives chose to demonise their own market-based creation.… More
RGGI Turns 4, Celebrates with its 18th Auction
This week’s auction of greenhouse gas allowances by the Regional Greenhouse Gas Initiative (RGGI) marked the 18th in that organization’s history. According to the market monitor report published today, only 53% (19.7 million) of the 37.5 million allowances offered for sale by the 9 state group sold at the required floor price of $1.93, all to electric generators regulated by the carbon dioxide-capping program. Participation in the auction remained low at 29 bidders,… More
Call It a Win: Californa’s First GHG Auction Sells Out
At California’s inaugural auction of greenhouse gas allowances last week, bidders bought all 23.1 million allowances for 2013 emissions sold at $10.09 per ton, a few significant cents above the floor price of $10. The price and relatively high demand for the allowances — with the state receiving three times as many bids as allowances available for sale — bodes well for the fledgling market. There is clearly more interest in the California market than for RGGI: the $10.09 per ton price is over five times the price garnered at the latest RGGI auction ($1.93),… More
RGGI’s Sweet 17th: Cumulative Proceeds Top A Billion Dollars
Last week marked the 17th Auction in the Regional Greenhouse Gas Initiative (RGGI). The number of bidders who went through the process of qualifying to participate in the auction is the lowest it has been in the program’s history — 29, down from 35 from the last auction in June, and well below the high of 84 in the first auction involving all member states, held in December 2008.… More
Here’s a Suprise — A Cap-and-Trade System For Nutrients Would Substantially Decrease the Cost of Nutrient Reductions in Chesapeake Bay
Yesterday, the Chesapeake Bay Commission released a study showing that implementation of a nutrient trading system would dramatically reduce the cost to achieve nutrient reductions in Chesapeake Bay.
Pardon me if I seem to be posting a lot of dog bites man stories recently.
Although it should not come as a surprise that a trading system would permit nutrient reductions to be attained most cost-effectively,… More