Climate 411

Editor’s note: This post was last updated April 21st, 2021.

Washington has an opportunity in the Climate Commitment Act to adopt transformative climate policy. It would enable the state to slash greenhouse gas emissions at the pace and scale necessary to fight the climate crisis, help address the disproportionate and historic pollution burden in many low-income communities and communities of color, and provide a policy model for other states on how to achieve their emission reduction goals.

There are many reasons the Legislature should act swiftly to ensure this landmark policy becomes law. Here is a rundown of the key features, how they work and why they matter.

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North Carolina is up against a climate deadline: In 10 years, the state needs to slash carbon pollution from the power sector 70% below 2005 levels by 2030. This goal, set by an executive order from Gov. Roy Cooper in 2018, will help communities avert the worst climate damages, while moving the state toward a clean energy future.

To determine how the state can achieve this 2030 goal and reach carbon neutrality in the power sector by 2050, the Duke University Nicholas Institute for Environmental Policy and UNC Center for Climate, Energy, Environment and Economics undertook a year-long study analyzing options that can help the state’s power sector achieve these targets. It includes detailed power sector modeling of potential policies, including an analysis on joining the Regional Greenhouse Gas Initiative (RGGI) – a collaboration of 10 Northeast and Mid-Atlantic states working together to reduce climate pollution.

The results of that study, which reflects the input of over 40 stakeholders including EDF, demonstrate that RGGI is one of the most promising and most cost-effective policies for reducing power sector carbon pollution in line with the state’s targets. Here are three key takeaways from the report that illustrate why RGGI is the right policy for achieving North Carolina’s power sector pollution goals:

1. RGGI is the most cost-effective option for reducing carbon dioxide emissions from North Carolina’s power sector. RGGI sets a declining limit and puts a price on carbon pollution, locking in a trajectory of pollution reduction over time and bringing in proceeds that the state can then reinvest towards additional beneficial programs. Since North Carolina would have to develop an investment portfolio specific to the state’s needs, the study evaluated three illustrative scenarios to assess potential benefits of different investment decisions:

1. RGGI is implemented without re-investing proceeds
2. RGGI proceeds are all invested in energy efficiency measures
3. RGGI proceeds are all invested in direct energy bill assistance for ratepayers

Regardless of how proceeds are invested, RGGI showed the lowest cost-per-ton of carbon dioxide reduced. RGGI’s cost-effective approach to reducing emissions also limits electricity rate impacts as RGGI was found to have less impact on retail electricity rates than the other policies evaluated.

The report finds that directing allowance proceeds to energy efficiency provides even more benefits to North Carolina, making it the only standalone policy of those analyzed that produces overall cost savings compared to the business-as-usual (BAU) scenario. These investments also further reduce the policy’s impact on electricity rates, which fall below BAU by 2040. In addition to the potential to generate cost-savings, RGGI with reinvestments in energy efficiency can be a boon to the local economy, creating over 47,000 job-years and increasing GSP by $4.9 billion over the study period.

When proceeds are directly invested in energy bill assistance, the policy reduces residential electricity rates below business-as-usual (BAU) by 2030 and is the only policy option included in the report to do so.

RGGI’s flexible framework allows North Carolina to invest in a range of clean energy measures and programs that directly benefit ratepayers. Although the study looks at two illustrative scenarios that focus investments in energy efficiency or direct bill assistance, the actual investment portfolio can include elements of both, and the state can optimize investments to maximize benefits that ensure a cleaner, healthier, more equitable energy system for North Carolina’s communities.

2. RGGI is fully compatible with other policies like accelerated coal retirements and a clean energy standard. The report finds that combining a clean energy standard (CES) with RGGI not only achieves greater reductions in carbon pollution than the CES does by itself, but does so more cost-effectively. RGGI creates additional savings for ratepayers, while guaranteeing that the state will achieve its pollution reduction targets. By combining RGGI with a CES, the state can reap the benefits of both policies – the CES can encourage in-state deployment of renewable energy resources and the job growth that comes with it, while RGGI secures emission reductions at low cost, generates proceeds for reinvestment, and provides certainty that emissions will fall to the required levels by placing a binding limit on carbon dioxide emissions. RGGI can provide similar benefits when combined with other policies – like accelerating coal retirements.

3. The flexibility of the RGGI framework allows North Carolina to tailor the policy to meet the state’s unique needs while providing certainty in the emissions outcome. The binding limit RGGI sets on carbon pollution ensures the required reductions are achieved and its flexible compliance mechanism allows North Carolina to reduce emissions and reinvest the program’s proceeds in a way that best meets the state’s needs.

With the proceeds from RGGI, North Carolina can invest in programs that support the state’s frontline communities most overburdened by air pollution. The state should work hand-in-hand with these communities to drive investments and complementary policies toward safety, health and equity.

For example, the state could reinvest proceeds to expand air quality monitoring in overburdened areas, provide energy bill assistance for households with lower incomes, and create jobs and economic opportunities through investment in renewable energy and energy efficiency in underserved communities.

RGGI is a critical tool in achieving longer term climate goals. Importantly, the report’s analysis assumed that the RGGI carbon pollution limits would remain flat after 2030. In reality, RGGI limits are expected to decrease beyond 2030, meaning North Carolina would continue to decrease allowable emissions in line with the state’s long-term climate goals, resulting in greater long-term emissions reductions and co-benefits for the state.

North Carolina is on an urgent timeline to achieve its climate goals and needs a proven policy to curb carbon emissions. RGGI provides an opportunity for North Carolina to jumpstart progress on its climate goals in the near term, while still allowing for future legislative action to deliver even further benefits with the adoption of smart clean energy policies. This study underscores that North Carolina can reduce carbon pollution in line with the goals of the Clean Energy Plan. Now Governor Cooper must take action so that North Carolina can lead in the fight against climate change and reap the benefits of a growing clean energy economy, healthier communities, and more equitable and prosperous future.

Read more about the benefits of RGGI in this fact sheet and our previous blog posts on RGGI and its benefits.

Mt Hood

On February 19, the U.S. officially reentered the Paris Agreement after being on the sidelines for four years. Even with the federal government beginning to restore and strengthen climate leadership, states still have a critical role to play in putting climate action points on the board. Oregon’s recently launched Climate Protection Program has the potential to deliver critical state-led climate leadership by putting an enforceable limit on emissions across its economy. This limit would decline in line with Oregon’s science-based climate targets, ensuring that the state slashes harmful climate-warming pollution. This is why EDF and the broader environmental community are so concerned about a few policy design suggestions that could severely cripple Oregon’s ability to reach the climate goals the state has already committed to.

In this installment, we want to shine a light on one design element that could provide a backdoor to blowing up the climate budget that Oregon will rely on to achieve its climate goals: the alternative compliance instrument. It may seem like a wonky term, but it’s an incredibly important piece of the puzzle to get right.

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This post was co-authored with Kjellen Belcher, Senior Analyst, U.S. Climate Policy at EDF.

Washington state capitol.

The Washington Legislature has just advanced ambitious climate policy that would make the state the second in the nation to place an enforceable, declining limit on climate pollution from the largest-emitting sectors of its economy. This is a fundamental step toward protecting the people of Washington state from the most severe consequences of climate change.

The Climate Commitment Act, which passed 7-3 out of the Environment, Energy, and Technology Committee on Thursday morning, places a firm limit on the state’s climate pollution and puts a price on carbon to ensure continued investments in community resilience, green jobs, sustainable transportation, and clean energy. The bill would guarantee that greenhouse gas emissions from across the state are slashed in line with Washington’s strong statutory climate goals.

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