Transcript Shattuck Presentation 4.26.13

RGGI 2.0:
Regional and National Implications
Restructuring Roundtable
April 25th, 2013
Boston, MA
Peter Shattuck
Director of Market Initiatives
ENE (Environment Northeast)
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Environmental Policy, Research,
and Advocacy
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Northeastern Based Non-profit NGO
Boston, MA / Providence, RI /
Rockport, ME / Hartford, CT /
Ottawa, ON, Canada
Program Areas
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Energy Policy
Climate Change
Transportation
Forest Practices and Land Use
Restructuring Roudtable, March 8th, 2013
Cap Level
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Best cap on the table
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97, 101, 106 million tons also considered
91 = only cap to reduce emissions from current level
Interim adjustments essential
Locks in significant emissions reduction – 44% from 2005
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Initial target 10% over 10 years
Within existing infrastructure (2005-2011):
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Fuel switching – Oil (-95%), Coal (-45%), Gas (+45%)
Wind – from 114 GWh to 4,000 GWh
Energy efficiency – 32,000 GWh of cumulative savings
Restructuring Roudtable, March 8th, 2013
Economic downturn = minor factor
Relative Effects of Various Factors on RGGI Electricity Sector CO2 Emissions: 2009 Compared to 2005,
available at: http://rggi.org/docs/Retrospective_Analysis_Draft_White_Paper.pdf
2012 Baseline – Removes Guesswork
170
Million Short Tons CO2
150
Initial RGGI cap based on
2005 projections
130
110
90
Initial RGGI Cap (165m tons)
Actual RGGI Emissions
New Cap (91m tons)
Projected Emissions
70
New RGGI Cap based
on latest available
data
Sources: RGGI, Inc and EPA
50
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Cost Containment Reserve
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RGGI approach – CCR allowances above cap
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Total allowance supply w/o CCR = 591 million tons
CCR = 65 million tons (11% of new cap)
Modest prices - $4 in 2014 to $10.77 in 2020
Alternative approach – CCR allowances below cap
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% set aside at start – available at any time
Total quantity (CCR plus lifetime cap) is fixed
Precedent in California and Waxman-Markey
Higher price points – $40-$50/ton in CA
Restructuring Roudtable, March 8th, 2013
Wider Implications - Economics
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Adds to C&T track record
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Costs much lower than anticipated – electricity prices
CT
DE
ME
MD MA
Sep-08 18.0 12.6 13.6 14.0 16.3
Sep-12 15.5 11.3 11.7 11.5 14.3
Change -14% -10% -14% -18% -12%
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NJ
15.4
14.2
-8%
NY
RI
VT
17.7 15.9 12.5
16.3 12.9 13.7
-8% -19% 10%
RGGI
16.2
14.5
-10%
Similar to Acid Rain Program and EU Emissions Trading Scheme
Economy-wide Benefits
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NH
15.2
14.0
-8%
Auctioning allowances
Investment in energy efficiency
Restructuring Roudtable, March 8th, 2013
Wider Implications - Mechanics
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Sound Infrastructure
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Reporting
Compliance
Market monitoring
Flexibility
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Least-cost emissions reductions
Capacity to adjust
Causality (mostly) irrelevant in cap and trade
Restructuring Roudtable, March 8th, 2013
Wider Implications - Politics
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Improved politics on climate
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Regional – (mostly) new crop of climate champs
Fatalism averted – mitigation & adaptation
National – pendulum swinging back?
Proof of concept
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Better than back-end control
EPA regulation
state implementation plans
Cut through the noise…?
Restructuring Roudtable, March 8th, 2013
Contact Information
Peter Shattuck
Director of Market Initiatives
(617) 742-0054 x103
[email protected]
ENE
Rockport, ME / Hartford, CT / Boston, MA
Providence, RI / Ontario, ON, Canada
www.env-ne.org