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US Leadership in Developing Carbon Markets

This presentation given by USCAN director Gary Cook cites State Leadership is current playing a main role within the United States with Federal action being inevitable in the long run. Legislation has been passed and initiatives have been taken on the state level with the Regional Greenhouse Gas Initiative (RGGI) in the Northeast and the CA Global Warming Solutions Act of 2006 in California. There has also been some climate change legislation introduced in Congress, all of which has yet to come to a vote. US trends in legislating climate change seem to be the desire to limit use of offsets, auctioning as a viable and important method politically and the inclusion of longer term targets.

Shifting US Landscape

Mandatory Federal regime seen as inevitable

Federal Debate will certainly intensify-passing legislation still some time off

State Leadership will continue to play role setting important design precedents

Major Examples of Policy Development

Northeast US States--Regional Greenhouse Gas Initiative (RGGI--ReGGI)

California-CA Global Warming Solutions Act of 2006

New Federal legislation

Regional Greenhouse Gas Initiative (RGGI)

577 MMT CO2Equiv (France-577)

First Cap & Trade System for CO2 in US

7 States Dec 05, +Maryland Joined in April, MA & RI

Power Plant Emissions

Stabilize Emissions 2009, decline 10% by 2018

Notable RGGI Design Elements

Allocation--Minimum 25% to consumer benefits or strategic energy purposes

Offsets

Restrictions on amount per gen unit
Type & Origin Limits

Offset Restrictions

3.3 % total emissions per generating Unit

Restricted to certain types initially (Landfill gas, SF6, Afforestation, FF End use efficiency, avoided methane from Ag)

Credits outside RGGI states discounted 50%

No International offsets

Cost Controls & Offsets

Stage I Trigger Event: Avg Price over $7

Discounting eliminated
Credits from North America Allowed
5% of total emissions

Stage II Trigger Event: Avg Price over $10

CDM & JI Credits allowed in
Circuit Breaker (over $10+2.5%yr= extend CP one year, allow 20% offsets if tripped 2 consecutive years

California--AB 32

12th largest polluter

Economy wide Cap & All gases

Long Term Target: 80% below 1990 by 2050

First Target: 1990 levels by 2020--gives CARB broad parameters to regulate

October--Executive order--explore linking to RGGI & ETS

Gives governor option to invoke safety valve for up to year

Looking Long Term

80% by 2050

CA
Safe Climate Act (Waxman)
Global Warming Pollution Reduction Act (Jeffords-Boxer)

75% Below 2000 (Arizona)

65% Below 2000 (Kerry-Snowe)

Notable Design Trends

Desire to limit use of offsets

Auctioning shown to be viable and important politically

Inclusion of Longer Term Targets

Climate Action Network

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