When Carbon Is Currency

By Hannah Fairfield
New York Times
New York (May 6, 2007) – Amid steadily increasing carbon emissions, and a federal government hesitant to take the lead on climate legislation, 10 states have joined to create the first mandatory carbon cap-and-trade program in the United States. They aim to reduce emissions from power plants by 10 percent in 10 years.


Leaders of state environmental and energy regulatory agencies hammered out the detailed model for the program, the Regional Greenhouse Gas Initiative, over the course of three years. The program sets a cap on the total amount of carbon that the 10 states – as a whole – can emit. Starting in 2009, each state will receive a set amount of carbon credits for its power plants, and each plant must have enough allowances to cover its total emissions at the end of three-year compliance periods.
In 2003, George E. Pataki, then New York’s governor, invited governors of 10 other states from Maine to Maryland to discuss a program to cut power plant emissions. All but one of the states joined the program; Pennsylvania has observer status.
Participants in the United States want to avoid the problem of giving free credits to utility companies by selling some or all of the credits at auction, with the proceeds going to state energy efficiency programs. The program in the U.S. also limits offsets to five categories: capture of landfill gas, curbs on sulfur hexafluoride leaks, planting of trees, reductions in methane from manure, and increased energy efficiency in buildings. Power companies can offset 3.3 percent of a plant’s total emissions from any combination of the five categories.
“The idea is to see what everyone else has done, and learn from it,” said Dale Bryk, a lawyer at the Natural Resources Defense Council who has been involved with the Northeastern regional program and California’s advisory committee. “Let’s not start from scratch.”
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