It’s summer time and many Americans are perfecting their grilling techniques and outdoor recipes. This week, EPA’s final Clean Power Plan rule is giving states a cupboard-full of ingredients to create signature recipes for climate action. The rule signals what the finished product must look like – the nation’s first limit on power plant pollution – but states can pick and choose elements that deliver the right combination of energy bill savings for customers, cleaner air, and clean energy investments. Fortunately, California and nine New England states (known as the Regional Greenhouse Gas Initiative or RGGI) have cooked up successful solutions in the past decade, implementing effective cap-and-trade programs that limit total pollution and demonstrate how strong climate action can stimulate economic growth.
California and RGGI have added a secret ingredient to their climate recipes, a catalyst that can not only drive further pollution reductions but can strengthen communities, create jobs, boost local economies, and improve health. Both programs are reinvesting dollars from the sale of carbon allowances (the currency of cap-and-trade that polluters must hold for every ton of pollution they emit) into further efforts to reduce climate pollution. Read More
When the preliminary plans for California’s cap-and-trade program were first introduced in 2010, it was quickly regarded as a groundbreaking policy due to its stringency, size, and scope. California was the ninth largest economy in the world – it has now jumped to eighth – and the Golden State’s program would soon implement the first economy-wide cap on greenhouse gas pollution in the country. But, it was not the first cap-and-trade program in the United States. In fact, ten states in the northeast had implemented the Regional Greenhouse Gas Initiative (RGGI) in 2008. Like California’s program, the RGGI system places a mandatory cap on greenhouse gas emissions and sets a corresponding price on carbon, but covering only the electricity sector. Despite the difference in scope and location of these two programs, they are both demonstrating that carbon pricing through cap-and-trade is an effective way to decrease harmful greenhouse gas pollution while allowing the economy to grow.
A new report released this past Wednesday by the Acadia Center digs into the most recent data out of the RGGI system. According to the Acadia analysis, the RGGI states have decreased their emissions by 35 percent since the start of the program, while emissions from the 40 states unregulated by a cap only decreased by 12 percent over the same period. At the same time as emissions dropped, the RGGI state economies grew by 21 percent as compared to the non-capped states, which only saw an 18 percent growth in their economies. California has similarly been able to grow its economy impressively while implementing an aggressive cap on emissions. During the first year of the program, the Golden State moved from ninth to eight largest economy in the world, grew its GDP faster than the national average, and decreased capped emissions by four percent. Read More
On January 15, Environmental Defense Fund released the second report in a series that explores how one of California’s signature climate and clean energy policies – our cap-and-trade program – is working. Today, EDF is making this information available in Spanish – you can find the Executive Summary here along with our press release. The report has generated a large amount of interest, given the increased urgency of the issue, and the growing number of states and regions looking at initiating more robust climate policies. So, what do we mean when we say the cap-and-trade program is “working,” and what does this mean for Latinos in the Golden State?
Here’s how EDF looked at whether the program is working. For starters, the report examines the data on the critical goal of reducing harmful greenhouse gas emissions. These are the emissions that drive climate change, pollute our air, and exacerbate extreme weather patterns. But there are other important goals in the mix, too. One is allowing the state to maintain healthy economic growth while implementing a system of policies that curbs climate change by limiting carbon pollution. And what about making sure the cap-and-trade program benefits all communities, including those already suffering the worst effects of climate change?
Good news on all fronts. The report concludes that after two years of operation, emissions capped by the program are going down. At the same time, the state’s economic progress continues to march forward, especially when it comes to the growth of green jobs. Read More
Bigger is not always better, but a recent cap-and-trade auction in Quebec gave us one example of why it may be the case for a combined California and Quebec carbon market.
The linkage of Quebec and California’s markets has been watched by many around the world, and the start of joint auctions in November 2014 is the final step in full linkage. Last month, however, both jurisdictions were busy conducting their last solo auctions. While the results of the California-only auction were as anticipated, the Quebec-only auction yielded both expected and less expected results.
What was not a surprise was that not all (83%) allowances offered for sale were purchased. Unlike in the California program, Quebec entities do not have to surrender any allowances this coming November. With their first deadline not until November 2015, Quebec entities have been understandably slow to enter and be active in the market. Another positive and not so surprising takeaway from Quebec’s last auction is high demand for 2017 allowances, a strong sign that Quebec companies are confident in this market’s future health.
More surprising to observers in Quebec’s recent auction, however, was that a higher percentage of 2017 vintage allowances sold than 2014 vintage allowances. Current 2014 vintage allowances can be used for compliance at any time, while 2017 vintage allowances can only be used starting in 2017. This longer useful life should make 2014 allowances more valuable and thus in higher demand, but this did not appear to be the case in the recent auction. Read More
Anna Doty contributed to this post.
A quick look back at California’s 2014 legislative agenda, which closed in the early morning hours of August 30th, shows it certainly was one for the record books. California took up major efforts to cut climate pollution and portion out billions in new investments, modernize the electric grid, and take on other not-so-small issues such as phasing out plastic bags. This activity happened while California led the nation in a remarkable economic rebound, continued to deal with an epic drought, and combatted the worst air quality in the U.S.
Among the many environmental issues in the spotlight this year, climate change, air quality, clean energy, water, and waste lead the pack.
Implementing a climate protection framework worthy of acclaim
On climate, lawmakers turned a corner by affirming the state’s commitment to AB 32 and green-lighting a new era of pollution reducing investments from the state’s world-class cap-and-trade regulation. Keeping transportation fuels within cap and trade starting January 2015 remained a main focus, with lawmakers facing and rebuffing numerous attempts by regulated industries and other legislators to undermine and delay the state’s landmark program. Throughout the session, lawmakers remained strong, demonstrating a commitment to the state’s growing clean economy and the need to capture the huge savings in health and fuel costs AB 32 will provide. Read More
For many people across the country, August is the last opportunity to enjoy the final bits of summer relaxation before fall sets in and the weather turns colder. While many people are away on vacation, the California Air Resources Board (CARB) and Ministry of Sustainable Development, Environment and the Fight against Climate Change (MDDELCC) of Quebec have been hard at work.
During the first week of this month, the two regulatory bodies held a practice joint auction for interested stakeholders to prepare for California and Quebec to officially join their quarterly auctions in November. A week and a half later, this past Monday, CARB held a California-only auction, the results of which were released today. Next week, MDDLECC will hold a Quebec-only auction, and finish out a very busy month for these linked cap-and-trade programs.
Amidst this flurry of activity, the results of California’s eighth quarterly auction, released today, show that the carbon market remains steady and strong. For the eighth time in a row, all current 2014 vintage allowances offered for sale were purchased. Current allowances sold at the same price as the last auction, $11.50, and 3.15 million more bids were placed than could be filled, reflecting healthy competition for credits. More 2014 vintage allowances were offered in this auction than in both of the previous auctions this year. This uptick in volume was due to the fact that a greater number of utility-owned allowances were turned over to CARB to be sold in this auction as compared to the previous two. 71 entities registered for this auction, which is similar to registration in previous auctions. This implies that there is sustained interest in the market and suggests that covered entities are actively planning how they will comply with the regulation. Read More