EPA’s Proposed Clean Power Plan &
Regional Compliance Options
October 14, 2014
RFF and EPRI Clean Power Plan
David Cash
Department of Environmental Protection, Massachusetts and RGGI, Inc.
Board Member
Why Market-Based Emissions Trading Programs are Elegant
el·e·gant
adjective
pleasingly ingenious and simple
Certainty of achieving environmental goal
Allows markets to find least-cost solutions;
market incentive to provide reductions at
lowest price
Spurs innovation
Relatively lower administrative burden
Existing programs show that the theoretical and
hypothetical benefits are real.
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RGGI States Experience: Economic Benefits
“Experience shows that states that work
together on market based initiatives -- like
RGGI in the Northeast -- can provide net
economic benefits”
-Sue Tierney & Paul Hibbard
Source: Analysis Group Report EPA’s Clean Power Plan (2014)
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RGGI Proceeds Investments
Invested more than $950 million of
auction proceeds in range of clean energy,
direct bill assistance, GHG abatement,
and climate change adaptation programs
More than 3 million households and
12,000 businesses have participated in
RGGI-funded programs
Benefits business and families by
reducing energy bills, creating jobs,
reducing harmful pollutants
Reduced overall demand for electricity
reduces market price of electricity for all
consumers
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MA Clean Energy Sector Growth
2013 Massachusetts Clean Energy Industry Report
http://www.masscec.com/content/2013-clean-energy-industry-report
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Nation-Leading Emissions Reductions
Concerns about 111(d) that are mitigated with
an emissions trading program
Building blocks
Tracking energy efficiency
Tracking renewable energy
Imports/exports
Which state gets credit for reductions
Administrative/planning/monitoring costs
Determining what’s cost-effective
Concerns about federal enforcement
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What Makes Emissions Trading
Successful
Critical design features are:
Cap on emissions
• sets environmental goal
Accountability
• emissions monitoring, enforcement
Simplicity of design and operation
• low transaction costs
• low administrative costs
Integration with existing energy markets
• Costs get folded in to bid price
Integrate with other energy policies approaches
RPS
Efficiency standards; decoupling
Clean energy innovation subsidies
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EPA Proposed 111(d) Rule - Questions for
Consideration
RGGI experience demonstrates that cost-effective reductions are
feasible beyond the 30% reduction proposed by EPA. Is a more
aggressive national aggregate emissions reduction target
feasible?
Does the proposed rule provide for a clear path for compliance
through existing or new regional trading programs? Some
possible challenges:
Stringency issues
State-specific v. regional compliance
One possible solution………
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EPA or Third Party
Plug-And-Play
Emissions Trading Bank
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Thank you!
David W. Cash, Ph.D.
Commissioner
Department of Environmental Protection
Commonwealth of Massachusetts
One Winter Street
Boston, MA 02108
Phone: (617) 292-5856
email: david.cash@state.ma.us
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