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States to EPA: Keep Cap-and-Trade Alive States to EPA: Keep Cap-and-Trade Alive

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Energy

States to EPA: Keep Cap-and-Trade Alive

Nine states that have a regional power-plant emissions cap want EPA to let them use the system to meet federal carbon-emissions rules for existing plants.(David McNew/Getty Images)

December 2, 2013

Cap-and-trade legislation is long dead in Congress, but Northeastern states are pressing the Environmental Protection Agency to keep the concept alive elsewhere.

The Regional Greenhouse Gas Initiative—nine states that have a regional power-plant emissions cap—want EPA to let them use the system to meet federal carbon-emissions rules for existing plants.

And the rules that EPA will float in draft form next June should let other states take the same road, RGGI argues in a new letter to the agency.

 

"Our experience with RGGI demonstrates that regional cooperation can achieve the most cost-effective emission reductions, enable a transition to a lower-emitting and more-efficient power sector, and create economic benefits and jobs across the United States," its Monday letter to EPA says. "We urge EPA to recognize these multiple benefits of RGGI, allow our states to use RGGI as a compliance mechanism, and encourage other states to follow suit by participating in RGGI or other regional programs."

The state in the RGGI, such as New York and Maryland, have already cut their joint electricity-sector emissions by more than 40 percent since 2005, according to the letter, which credits the cap-and-trade system and other green-energy programs.

Cap-and-trade will ensure the regional power sector emissions are 50 percent below 2005 levels in 2020, adds RGGI, which was established in 2005. Its pollution cap took effect about five years ago.

In addition to the RGGI states, California has implemented its own cap-and-trade program for greenhouse-gas emissions from a wider array of industrial sources.

The RGGI letter is one of several recent efforts to encourage EPA to give states lots of running room when crafting rules for existing plants—perhaps the most far-reaching piece of President Obama's second-term climate plan.

Under the Clean Air Act section EPA is using, called 111(d), federal regulators set enforceable guidelines and states craft plans to meet them.

In November, a group of state power regulators—called the National Association of Regulatory Utility Commissioners—passed a resolution calling for "sufficiently flexible compliance pathways or mechanisms that recognize state and regional variations to achieve the most cost-effective emissions reductions in each state."

And Adele Morris, a Brookings Institution economist and climate expert, is pressing EPA to give states the option of meeting the standards with an excise tax on carbon emissions from power plants.

The early positioning reflects the reach of the upcoming EPA rules. Power plants--especially coal-fired power plants--are the largest single unregulated source of U.S. carbon emissions.

EPA Administrator Gina McCarthy, speaking at the liberal Center for American Progress Monday, said EPA would give states "significant flexibility" under the rules.

As EPA gets closer to issuing draft rules, look for more efforts by states to win plenty of leeway from the regulators.

And RGGI, for its part, is using its new letter to EPA as more than just a sales pitch for cap-and-trade.

The northeastern states also want credit for what they've already done.

"EPA should avoid any approach that imposes inequitable or disproportionate burdens on early mover states and fails to recognize their substantial progress," the letter said.

Clare Foran contributed contributed to this article.

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