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117-842: RGGI establishes a regional cap on the amount of CO 2 pollution that power plants can emit by issuing a limited number of tradable CO 2 allowances . Each allowance represents an authorization for a regulated power plant to emit one short ton of CO 2 . Individual CO 2 budget trading programs in each RGGI state together create a regional market for CO 2 allowances. The RGGI states distribute over 90 percent of allowances through quarterly auctions. These allowance auctions generate proceeds, which participating states are able to invest in strategic energy and consumer benefit programs. Programs funded through RGGI have included energy efficiency , clean and renewable energy, greenhouse gas abatement, and direct bill assistance. An initial milestone program's development occurred in 2005, when seven states signed

234-428: A battery is usually expressed indirectly by its capacity in ampere-hours ; to convert ampere-hour (Ah) to watt-hours (Wh), the ampere-hour value must be multiplied by the voltage of the power source. This value is approximate, since the battery voltage is not constant during its discharge, and because higher discharge rates reduce the total amount of energy that the battery can provide. In the case of devices that output

351-639: A memorandum of understanding announcing an agreement to implement RGGI. The RGGI states then established individual CO 2 budget trading programs, based on the RGGI Model Rule. The first pre-compliance RGGI auction took place in September 2008, and the program became effective on January 1, 2009. The RGGI program is currently in its fifth three-year compliance period, which began January 1, 2021. RGGI states have reduced their carbon emissions while still experiencing economic growth. Power sector carbon emissions in

468-590: A preliminary injunction barring publication. The stay was deemed dissolved as of April 11, 2022, and the RGGI rulemaking was finally published in the Pennsylvania Bulletin on April 23, 2022. On July 8, 2022, the Commonwealth Court granted the state Senators' request for a preliminary injunction enjoining DEP from implementing, enforcing, participating, and administrating the RGGI program. The Court found that

585-495: A subsidy for the sector in question. The Garnaut Climate Change Review considered the free allocation of permits unjustified in any circumstances, arguing that governments could deal with market failure or claims for compensation more transparently with the revenue from full auctioning of permits. Another economically efficient solution to carbon leakage is border adjustment, where tariffs are set on imported goods from less regulated countries. A problem with border adjustments

702-875: A "carbon tax", and when the government proposed the Clean Energy Bill in February 2011, the opposition denounced it as a broken election promise. The Lower House passed the bill in October 2011 and the Upper House in November 2011. The Liberal Party vowed to repeal the bill if elected. The bill thus resulted in passage of the Clean Energy Act, which possessed a great deal of flexibility in its design and uncertainty over its future. TWh A kilowatt-hour ( unit symbol : kW⋅h or kW h ; commonly written as kWh )

819-518: A 2015 peer-reviewed study found that RGGI has contributed significantly to the decline in emissions in the nine-state region. Alternate factors considered by the study included state Renewable Portfolio Standard (RPS) programs, economic trends, and natural gas prices. Other independent reports have analyzed RGGI's economic impact. For example, two reports by the Analysis Group studied RGGI's first and second three-year compliance periods. They found that

936-450: A 2021 Program Review, which includes technical analyses and regularly scheduled public stakeholder meetings to solicit input. The 2021 Review is expected to be completed in early 2023. The 2012 and 2016 RGGI Program Reviews completed in 2013 and 2017 resulted in several updates to the program. The 2012 Review led to a 45 percent reduction in the RGGI cap and the introduction of the CCR. The CCR and

1053-663: A benchmarking approach, if designed properly, would reward more efficient operations". Hepburn et al. state that, empirically, businesses tend to oppose auctioning of emissions permits, while economists almost uniformly recommend auctioning permits. Auctioning permits provides the government with revenues, which can be used to fund low-carbon investment and cuts in distortionary taxes . Auctioning permits can therefore be more efficient and equitable than allocating permits. Garnaut stated that full auctioning will provide greater transparency and accountability and lower implementation and transaction costs as governments retain control over

1170-456: A cap-and-trade program for power sector CO 2 emissions in the northeastern and mid-Atlantic region. The MOU established the initial framework for RGGI. The following year, in 2006, the same seven states amended the MOU and published the first Model Rule draft to guide individual state-level regulations. In 2007, Massachusetts, Maryland, and Rhode Island also signed on to the MOU. On December 31, 2008,

1287-401: A change over time. For example: miles per hour, kilometres per hour, dollars per hour. Power units, such as kW, already measure the rate of energy per unit time (kW= kJ / s ). Kilowatt-hours are a product of power and time, not a rate of change of power with time. Watts per hour (W/h) is a unit of a change of power per hour, i.e. an acceleration in the delivery of energy. It is used to measure

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1404-442: A different voltage than the battery, it is the battery voltage (typically 3.7 V for Li-ion ) that must be used to calculate rather than the device output (for example, usually 5.0 V for USB portable chargers). This results in a 500 mA USB device running for about 3.7 hours on a 2,500 mAh battery, not five hours. The Board of Trade unit (B.T.U.) is an obsolete UK synonym for kilowatt-hour. The term derives from

1521-606: A firm being given fewer permits in the future for aiming to cut emissions drastically. Another method of grandfathering is to base allocations on current production of economic goods rather than historical emissions. Under this method of allocation, the government will set a benchmark level of emissions for each good deemed to be sufficiently trade exposed and allocate firms units based on their production of this good. However, allocating permits in proportion to output implicitly subsidises production. The Garnaut Climate Change Review noted that grandfathered permits are not free of cost. As

1638-640: A large portion of RGGI investments. Ultimately, all electricity consumers, not only those who make upgrades, benefit from energy efficiency programs. For example, investing in efficiency programs—such as weatherizing houses—reduces the amount of electricity used. The decrease in electricity demand actually reduces the overall price of electricity. That means the costs go down for everyone, not just someone who installed new, efficient windows. The RGGI participating states have committed to comprehensive, periodic program reviews to consider program successes, impacts, and design elements. The RGGI states are currently undergoing

1755-502: A major issue in low-lying coastal and Chesapeake Bay communities. In October 2019, Pennsylvania Governor Tom Wolf issued Executive Order 2019-17 directing the Pennsylvania Department of Environmental Protection (DEP) to begin working on regulations to bring Pennsylvania into RGGI. In September 2020, Governor Wolf vetoed a bill (House Bill 2025) that would restrict his administration's ability to take part in RGGI without

1872-472: A positive leakage to developing countries. However, a negative leakage might also occur due to technological developments driven by domestic regulation of GHGs, helping to reduce emissions even in less regulated regions. The current state of carbon emissions trading shows that roughly 22% of global greenhouse emissions are covered by 64 carbon taxes and emission trading systems as of 2021. Energy intensive industries that are covered by such instruments may view

1989-556: A reduction, avoidance or removal of one metric tonne of carbon dioxide or its carbon dioxide-equivalent (CO 2 e). A variety of greenhouse gas reduction projects can qualify for offsets and credits depending on the scheme. Some include forestry projects that avoid logging and plant saplings, renewable energy projects such as wind farms , biomass energy , biogas digesters , hydroelectric dams , as well as energy efficiency projects. Further projects include carbon dioxide removal projects, carbon capture and storage projects, and

2106-515: A resolution (SCRRR1) disapproving the rulemaking. Secretary McDonnell claimed that SCRRR1 was procedurally deficient because LRB's interpretation of the 10 legislative days or 30 calendar days (whichever is longer) in which the House of Representatives and Senate must act to disapprove a regulation is incorrect. McDonnell claimed the timeframe for both chambers to act on a disapproval resolution runs concurrently rather than consecutively. In other words, both

2223-475: A rulemaking, whether the regulations constituted an interstate compact or agreement in violation of the Pennsylvania Constitution , or whether the administrative process through which the regulations were adopted was lawful. On July 11, 2022, Acting Secretary Ramez Ziadeh (Secretary McDonnell's service with DEP ended July 1, 2022, and Acting Secretary Ziadeh was substituted as the petitioner) appealed

2340-752: A three-year control period. A CO 2 allowance represents a limited authorization to emit one ton of CO 2 . The first three-year control period took effect on January 1, 2009, and extended through December 31, 2011. The second three-year control period took effect on January 1, 2012, and extended through December 31, 2014. The third three-year control period took effect on January 1, 2015, and extended through December 31, 2017. The fourth three-year control period took effect on January 1, 2018, and extended through December 31, 2020. The fifth three-year control period took effect on January 1, 2021, and extends through December 31, 2023. As of April 2021, 97.5 percent of regulated power plants had met their compliance obligations for

2457-451: A unit in the left column to the units in the top row, multiply by the factor in the cell where the row and column intersect. All the SI prefixes are commonly applied to the watt-hour: a kilowatt-hour is 1,000 Wh (kWh); a megawatt-hour is 1 million Wh (MWh); a milliwatt-hour is 1/1,000 Wh (mWh) and so on. The kilowatt-hour is commonly used by electrical energy providers for purposes of billing, since

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2574-513: A wide price range from €7 per tonne of CO 2 in China's national carbon trading scheme to €63 per tonne of CO 2 in the EU-ETS (as of September 2021). Other greenhouse gases can also be traded but are quoted as standard multiples of carbon dioxide with respect to their global warming potential . The economic problem with climate change is that the emitters of greenhouse gases (GHGs) do not face

2691-444: A wide variety of programs. Programs funded through RGGI investment in energy efficiency, renewable energy, direct bill assistance, and greenhouse gas abatement have benefited more than 3.7 million participating households and 17,800 participating businesses. These investments have saved participants money on their energy bills, created jobs, and reduced pollution. In the period 2008 to 2014, programs funded by RGGI investments avoided

2808-485: A yearly basis, in units such as megawatt-hours per year (MWh/yr) gigawatt-hours/year (GWh/yr) or terawatt-hours per year (TWh/yr). These units have dimensions of energy divided by time and thus are units of power. They can be converted to SI power units by dividing by the number of hours in a year, about 8760 h/yr . Thus, 1 GWh/yr = 1 GWh/8760 h ≈ 114.12 kW . Many compound units for various kinds of rates explicitly mention units of time to indicate

2925-498: Is a carbon trading mechanism that enables entities to compensate for offset greenhouse gas emissions by investing in projects that reduce, avoid, or remove emissions elsewhere. When an entity invests in a carbon offsetting program, it receives carbon credit or offset credit, which account for the net climate benefits that one entity brings to another. After certification by a government or independent certification body, credits can be traded between entities. One carbon credit represents

3042-575: Is a non-SI unit of energy equal to 3.6 megajoules (MJ) in SI units, which is the energy delivered by one kilowatt of power for one hour . Kilowatt-hours are a common billing unit for electrical energy supplied by electric utilities . Metric prefixes are used for multiples and submultiples of the basic unit, the watt-hour (3.6 kJ). The kilowatt-hour is a composite unit of energy equal to one kilowatt (kW) sustained for (multiplied by) one hour. The International System of Units (SI) unit of energy meanwhile

3159-466: Is a type of emissions trading scheme designed for carbon dioxide (CO 2 ) and other greenhouse gases (GHGs). A form of carbon pricing , its purpose is to limit climate change by creating a market with limited allowances for emissions. Carbon emissions trading is a common method that countries use to attempt to meet their pledges under the Paris Agreement , with schemes operational in China ,

3276-566: Is able to, within 14 days, report for full consideration by the House or Senate a concurrent resolution disapproving the regulation at issue. In this case, the Senate Environmental Resources and Energy Committee reported Senate Concurrent Regulatory Review Resolution 1 (SCRRR1) disapproving the rulemaking on September 14, 2021. Once reported the House of Representatives and the Senate have 10 legislative days or 30 calendar days, whichever

3393-435: Is an oversupplied market. The oversupplied market related to RGGI can be traced back to the transition from coal to natural gas as well as a weak economy during the time of implementation. Because RGGI has a low price floor, there is no scarcity of allowances. In the world of carbon offset credits, allowances are shared through a cap-and-trade system to limit harmful emissions and catalyze pollution cuts. This cap-and-trade system

3510-529: Is calculated by multiplying the device's power consumption in kilowatts by the operating time in hours, and by the price per kilowatt-hour. The unit price of electricity charged by utility companies may depend on the customer's consumption profile over time. Prices vary considerably by locality. In the United States prices in different states can vary by a factor of three. While smaller customer loads are usually billed only for energy, transmission services, and

3627-408: Is constrained in its regulatory jurisdiction. GHG emissions may thus leak to another region or sector with less regulation. Generally, leakages reduce the effectiveness of domestic emission abatement efforts. Notwithstanding, leakages may also be negative in nature, increasing the effectiveness of domestic abatement efforts. For example, a carbon tax applied only to developed countries might lead to

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3744-579: Is longer, to adopt SCRRR1. The Senate approved SCRRR1 on October 27, 2021, within the 10 legislative day limitation. The House of Representatives, however, did not adopt SCRRR1 until December 15, 2021. Governor Wolf then vetoed the resolution on January 10, 2022. In response, on April 4, 2022, the Senate attempted to override the Governor's veto but failed (32–7), just one vote shy of the constitutional two-thirds requirement. In response to and in tandem with opposing legislation, two companion bills were introduced in

3861-450: Is measured in watts , or joules per second . For example, a battery stores energy. When the battery delivers its energy, it does so at a certain power, that is, the rate of delivery of the energy. The higher the power, the quicker the battery's stored energy is delivered. A higher power output will cause the battery's stored energy to be depleted in a shorter time period. Electric energy production and consumption are sometimes reported on

3978-445: Is often expressed as terawatt-hours (TWh) for a given period that is often a calendar year or financial year . A 365-day year equals 8,760 hours, so over a period of one year, power of one gigawatt equates to 8.76 terawatt-hours of energy. Conversely, one terawatt-hour is equal to a sustained power of about 114 megawatts for a period of one year. In 2020, the average household in the United States consumed 893 kWh per month. Raising

4095-404: Is proving successful globally as countries are allowed to set more ambitious climate goals and countries across the world are seeing downward trends in emissions. RGGI states have witnessed positive economic activity and a decrease in emissions, electricity prices, and coal generation. According to RGGI's 2018 Electricity Monitoring report, carbon dioxide emissions decreased by 48.3 percent between

4212-408: Is that they might be used as a disguise for trade protectionism . Some types of border adjustment may also not prevent emissions leakage. The EU Carbon Border Adjustment Mechanism takes in effect for 6 sectors in 2026. The Paris Agreement provided a legal base for the creation of a global carbon market, which has a potentially significant role in stopping climate change. In the beginning of 2024,

4329-474: Is the joule (symbol J). Because a watt is by definition one joule per second , and because there are 3,600 seconds in an hour, one kWh equals 3,600  kilojoules or 3.6 MJ. A widely used representation of the kilowatt-hour is kWh , derived from its component units, kilowatt and hour. It is commonly used in billing for delivered energy to consumers by electric utility companies, and in commercial, educational, and scientific publications, and in

4446-467: Is used with loads or output that vary during the year but whose annual totals are similar from one year to the next. For example, it is useful to compare the energy efficiency of household appliances whose power consumption varies with time or the season of the year. Another use is to measure the energy produced by a distributed power source. One kilowatt-hour per year equals about 114.08 milliwatts applied constantly during one year. The energy content of

4563-602: The Attorney General approved the rulemaking as to form and legality on July 26, 2021, and November 24, 2021, respectively. Further, the Independent Regulatory Review Commission (IRRC), which evaluates whether proposed rules align with public interest , had approved the rulemaking on September 1, 2021. Pennsylvania formally joined RGGI in April 2022, however, Pennsylvania remains unable to participate in

4680-481: The European Union , and other countries. Emissions trading sets a quantitative total limit on the emissions produced by all participating emitters, which correspondingly determines the prices of emissions. Under emission trading, a polluter having more emissions than their quota has to purchase the right to emit more from emitters with fewer emissions. This can reduce the competitiveness of fossil fuels , which are

4797-613: The European Union Emissions Trading System (EU-ETS) complement the country-to-country trading stipulated in the Kyoto Protocol by allowing private trading of permits, coordinating with national emissions targets provided under the Kyoto Protocol. Under such programmes, a national or international authority allocates permits to individual companies based on established criteria, with a view to meeting targets at

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4914-589: The New South Wales (NSW) state government unilaterally established the New South Wales Greenhouse Gas Abatement Scheme to reduce emissions by requiring electricity generators and large consumers to purchase NSW Greenhouse Abatement Certificates (NGACs). This has prompted the rollout of free energy-efficient compact fluorescent lightbulbs and other energy-efficiency measures, funded by the credits. This scheme has been criticised by

5031-469: The Pennsylvania Code and Bulletin acknowledged the submission of the rulemaking but refused to publish it because the period during which the House of Representatives and Senate had to disapprove the rulemaking had not yet expired. On December 10, 2021, Secretary McDonnell again submitted the rulemaking for publication, however, the Senate and House of Representatives in the intervening time had approved

5148-532: The Republican -controlled state legislature wrote a provision in the budget bill prohibiting the state from joining RGGI. The move to join RGGI was re-introduced as part of the 2020 General Assembly. With a Democratic majority in both the House of Delegates and the General Assembly, the measure passed and was signed into law. Virginia effectively joined RGGI on January 1, 2021. On January 15, 2022, after winning

5265-680: The Southern Environmental Law Center on behalf of the Association of Energy Conservation Professionals, Virginia Interfaith Power and Light, Appalachian Voices , and Faith Alliance for Climate Solutions filed a lawsuit in the Fairfax Circuit Court challenging the APCB's authority to withdraw the state from RGGI. Governor Youngkin's administration maintains that his office does have the power to remove Virginia from RGGI, and that

5382-433: The annual electricity generation for whole countries and the world energy consumption . A kilowatt is a unit of power (rate of flow of energy per unit of time). A kilowatt-hour is a unit of energy. Kilowatt per hour would be a rate of change of power flow with time. Work is the amount of energy transferred to a system; power is the rate of delivery of energy. Energy is measured in joules , or watt-seconds . Power

5499-414: The cap-and-trade variant of emissions trading, a cap on access to a resource is defined and then allocated among users in the form of permits. Compliance is established by comparing actual emissions with permits surrendered. The setting of the cap affects the environmental integrity of carbon trading, and can result in both positive and negative environmental effects. Emissions trading programmes such as

5616-455: The election of governor Phil Murphy in 2017, New Jersey began to make preliminary moves to rejoin RGGI. New Jersey reentered the RGGI under an executive order on January 29, 2018. Updated Model Rules were released in 2013 and 2017. After the 2017 election of Governor Ralph Northam in Virginia, the state began to make preliminary moves to join RGGI. However, the move was stopped in 2019 when

5733-456: The external costs of their actions, which include the present and future welfare of people, the natural environment, and the social cost of carbon . This can be addressed with the dynamic price model of emissions trading. An emissions trading scheme for greenhouse gas emissions (GHGs) works by establishing property rights for the atmosphere . The atmosphere is a global public good , and GHG emissions are an international externality . In

5850-457: The 10 MOU states finalized the first Model Rule, setting individual shares of the regional CO 2 cap. RGGI's first compliance period began on January 1, 2009, and the first Model Rule served as the regulatory framework for each participating state until 2013. During this time, New Jersey withdrew from the MOU. Groups such as Acadia Center had reported on lost revenue resulting from New Jersey's departure, and argued for renewed participation. After

5967-433: The 2006 to 2008 period and the 2016 to 2018 period. Electricity generation from coal decreased significantly since the inception of RGGI, while natural gas and renewable generation increased. RGGI also induces a downward pressure on wholesale electricity prices through investments in state-level energy efficiency programs. These programs, along with other associated RGGI measures, have helped provide positive economic impacts in

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6084-506: The 2021–2022 Legislative Session, detailing the appropriation of RGGI auction proceeds to areas of need. Senate Bill 15 and H.B. 1565 were proposed and had Governor Wolf's support but failed to garner enough support and expired at the end of the session. No such bills have yet to be introduced in the 2023–2024 Legislative Session. On February 3, 2022, Patrick J. McDonnell, Secretary of the Department of Environmental Protection and Chairperson of

6201-516: The CCR, there is an Emissions Containment Reserve (ECR), which serves as the floor and triggers a reduction in allowances if prices drop below the trigger price—$ 6.00 in 2021. The inclusion of the CCR and ECR ensures emission reduction costs are reasonable. RGGI compliance obligations apply to fossil-fueled power plants 25MW and larger within the RGGI region. As of 2021, there were 203 such covered sources. Under RGGI, sources are required to possess CO 2 allowances equal to their CO 2 emissions over

6318-605: The Centre for Energy and Environmental Markets (CEEM) of the University of New South Wales (UNSW) because of its lack of effectiveness in reducing emissions, its lack of transparency and its lack of verification of the additionality of emission reductions. Prior to the 2007 federal election , both the incumbent Howard Coalition government and the Rudd Labor opposition promised to implement an emissions trading scheme (ETS). Labor won

6435-399: The Commonwealth Court's decision. At the start of Pennsylvania's 2021–2022 Legislative Session a number of bills in opposition to RGGI were introduced. Notably, H.B. 637 and its Senate counterpart (S.B. 119) attempted to prohibit DEP from taking actions surrounding carbon pricing programs, including RGGI, without legislative approval. Both bills failed to garner enough support and expired at

6552-599: The Commonwealth Courts July 8, 2022, preliminary injunction order to the Pennsylvania Supreme Court . In response, the Senators shortly thereafter moved to vacate the automatic stay of the Commonwealth Court's July 8, 2022, order that was triggered by DEP's appealed. The Commonwealth Court granted the motion to vacate the automatic stay and the preliminary injunction remained in effect. On August 31, 2022,

6669-520: The Court found that the preliminary injunction would restore the status quo and that the Senators had showed a clear right to relief by raising substantial legal questions about separation of powers issues, as well as whether the allowance auction proceeds were an unconstitutional tax. However, the Court found that the Senators did not raise substantial legal questions regarding whether the regulation exceeded authority granted to DEP and EQB to promulgate such

6786-546: The EU ETS, where industries that have been judged to be internationally exposed have been given permits for free. The International Air Transport Association , whose 230 member airlines comprise 93% of all international traffic, argue that emissions levels should be based on industry averages rather than using individual companies' previous emissions levels to set their future permit allowances, stating that "would penalise airlines that took early action to modernise their fleets, while

6903-731: The Environmental Quality Board, filed a lawsuit in the Commonwealth Court against the  Pennsylvania Legislative Reference Bureau (LRB), its director, and the director of the Pennsylvania Code and Bulletin . Secretary McDonnell alleged that on November 29, 2021, DEP, acting on behalf of the EQB, submitted to the LRB for final publication in the Pennsylvania Bulletin the "CO 2 Budget Trading Program Regulation".  The director of

7020-452: The House of Representatives and Senate must act within the 10 legislative days or 30 calendar days (whichever is longer), as opposed to LRB's interpretation that each chamber has 10 legislative days or 30 calendar days to act. For example, the Senate could vote to approve the resolution on the 25th calendar day and transmit the resolution to the House of Representatives which would then have another 10 legislative days or 30 calendar days (i.e.,

7137-504: The Kyoto Protocol due to the surplus of allowances that some countries possess. For example, Russia had a surplus of allowances due to its economic collapse following the end of the Soviet Union. Other countries could have bought these allowances from Russia, but this would not have reduced emissions. In practice, as of 2010, Kyoto Parties had not yet chosen not to buy these surplus allowances. The complexity of cap and trade schemes around

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7254-598: The Liberals opposed the ETS. This left the Rudd Labor government unable to secure passage of the bill, and it was subsequently withdrawn. Julia Gillard defeated Rudd in a leadership challenge, becoming Federal Prime Minister in June 2010. She promised that she would not introduce a carbon tax, but would look to legislate a price on carbon when taking the government to the 2010 election . In

7371-486: The Pennsylvania Supreme Court denied DEP's request to reinstate the stay on the Commonwealth Court's injunction on implementing the RGGI rulemaking. On January 19, 2023, the Commonwealth Court dismissed DEP's petition seeking to compel LRB to publish the RGGI rulemaking as moot . The Court noted that it was undisputed that the question of law raised by the petition was moot due to the subsequent publication of

7488-521: The RGGI CO 2 allowance auctions, provided they meet qualification requirements, including provision of financial security. Auction rules limit the number of CO 2 allowances that associated entities may purchase in a single auction to 25 percent of the CO 2 allowances offered for sale in that auction. The RGGI auctions are monitored by an independent market monitor, Potomac Economics. Potomac Economics monitors

7605-410: The RGGI allowance market in order to protect and foster competition, as well as to increase the confidence of participants and the public in the allowance market. The independent market monitor has found no evidence of anti-competitive conduct, and no material concerns regarding the auction process, barriers to participation in the auctions, competitiveness of the auction results, or the competitiveness of

7722-481: The RGGI region—the RGGI program provided $ 1.4 billion in net positive economic activity between 2015 and 2017. The RGGI CO 2 cap is the regional cap on power sector emissions. The RGGI states included two interim adjustments to the RGGI cap to account for banked CO 2 allowances. The cap declined 2.5 percent each year until 2020. Initial reductions were planned as follows: The RGGI caps and adjusted caps decreased annually from 2014 to 2020, except in 2020 given

7839-508: The RGGI states have declined by over 50% since the program began. Media have reported on RGGI's success as a nationally relevant example showing that economic growth can coincide with pollution reductions. In a report on RGGI, the Congressional Research Service has also said that, "experiences in RGGI may be instructive for policymakers seeking to craft a national program." While multiple factors contribute to emissions trends,

7956-482: The RGGI states' shift to cleaner power generation. The study found that the RGGI states transition to cleaner energy is saving hundreds of lives, preventing thousands of asthma attacks and reducing medical impacts and expenses by billions of dollars. RGGI has the potential to lower Pennsylvania's emissions of many pollutants dramatically. The reduction in state air pollution can potentially result in significant health benefits through 2030. The adoption of RGGI also has

8073-415: The SI. An electric heater consuming 1,000 watts (1 kilowatt) operating for one hour uses one kilowatt-hour of energy. A television consuming 100 watts operating continuously for 10 hours uses one kilowatt-hour. A 40-watt electric appliance operating continuously for 25 hours uses one kilowatt-hour. Electrical energy is typically sold to consumers in kilowatt-hours. The cost of running an electrical device

8190-459: The Senators had demonstrated irreparable harm per se by raising a substantial legal question as to whether the regulations constituted a tax requiring legislative approval as opposed to a regulatory fee . The Court further found that implementation and enforcement of invalid regulations would cause great harm even if implementation of the regulations would result in "immediate reduction" of carbon dioxide emissions from covered sources. In addition,

8307-614: The Virginia 2021 gubernatorial election , on his first day in office Governor Glenn Youngkin signed Executive Order 9 calling for a reevaluation of Virginia's membership in RGGI It has been noted that because Virginia entered the initiative through legislative action, Youngkin may lack the legal authority to withdraw from the initiative without legislative approval. On December 7, 2022, the Virginia Air Pollution Control Board (APCB), voted 4–1 with two abstentions to initiate

8424-399: The actual reductions achieved. To be credible, the reduction in emissions must meet three criteria: they must last indefinitely, be additional to emission reductions that were going to happen anyway, and must be measured, monitored and verified by independent third parties to ensure that the amount of reduction promised has in fact been attained. A domestic carbon emissions trading scheme

8541-480: The addition of New Jersey. In 2017, the participating states agreed to further reductions in the regional cap, specifying a 30 percent reduction from 2020 to 2030. The new caps for 2021–2030 are as follows: The RGGI states also established a Cost Containment Reserve (CCR) of CO 2 allowances that creates a fixed additional supply of CO 2 allowances that are only available for sale if CO 2 allowance prices exceed certain price levels—$ 13.00 in 2021. In contrast to

8658-489: The carbon credit auction due to two "separate but related" lawsuits, regarding the constitutionality of Pennsylvania's involvement in RGGI. Environmental advocates have calculated that Pennsylvania has missed out on a cumulative $ 1.5 billion in missed revenue. On November 1, 2023, the Commonwealth Court ruled that Pennsylvania's participation in the RGGI cooperative was unconstitutional. On November 21, 2023, Pennsylvania Governor Josh Shapiro announced his office would appeal

8775-412: The certainty of a particular quantity limit of emissions. Emissions trading has been criticized for a variety of reasons. For one, it has been argued that climate change requires more radical solutions than pollution trading schemes, and that systemic changes must be made to reduce fossil fuel usage. At the same time, carbon credits have been seen as enabling large companies to pollute the environment at

8892-479: The change in regulations and not simply due to paying the real cost of carbon. However, if there is advanced notice of this change, or if the carbon price is introduced gradually, this one-time regulatory cost will be minimized. There has now been enough advance notice of carbon pricing that this effect should be negligible on average. Allocating permits based on past emissions is called "grandfathering". Grandfathering permits can lead to perverse incentives , such as

9009-602: The clock starts over). Under Secretary McDonnell's interpretation in such a scenario, the House of Representatives would only have 5 days to act on the resolution (the timeframe is concurrent for both chambers). On April 5, 2022, the Commonwealth Court issued an order temporarily blocking publication of the RGGI rulemaking. State legislators, Pennsylvania Senate President Pro Tempore Jake Corman , Senate Majority Leader Kim Ward , Senate Environmental Resources & Energy Committee Chair Gene Yaw , and Senate Appropriations Committee Chair Pat Browne soon after intervened and requested

9126-558: The daily variation of demand (e.g. the slope of the duck curve ), or ramp-up behavior of power plants . For example, a power plant that reaches a power output of 1 MW from 0 MW in 15 minutes has a ramp-up rate of 4 MW/h . Other uses of terms such as watts per hour are likely to be errors. Several other units related to kilowatt-hour are commonly used to indicate power or energy capacity or use in specific application areas. Average annual energy production or consumption can be expressed in kilowatt-hours per year. This

9243-428: The effects of RGGI's first three years are generating in $ 1.6 billion in net economic benefit and 16,000 job-years, and RGGI's second three years are generating $ 1.3 billion in net economic benefit and 14,700 job-years. These figures do not include co-benefits such as public health improvements or avoided climate change impacts. A Clean Air Task Force (CATF) study investigated public health benefits arising from

9360-572: The election, and the new government proceeded to implement an ETS. The new Rudd government introduced the Carbon Pollution Reduction Scheme , which the Liberal Party of Australia (now led by Malcolm Turnbull ) supported. Tony Abbott questioned an ETS, advocating a "simple tax" as the best way to reduce emissions. Shortly before the carbon vote, Abbott defeated Turnbull in a leadership challenge (1 December 2009), and from there on

9477-465: The elimination of methane emissions in various settings such as landfills . Many projects that give credits for carbon sequestration have received criticism as greenwashing because they overstated their ability to sequester carbon, with some projects being shown to actually increase overall emissions. Carbon offset and credit programs provide a mechanism for countries to meet their Nationally Determined Contributions (NDC) commitments to achieve

9594-541: The end of the legislative session. A similar bill to the previously vetoed H.B. 2025 was reintroduced in the 2022–2023 Legislative Session and is pending before the House Environmental Resources & Energy Committee. Following the approval by IRRC on September 1, 2021, under Pennsylvania law, a standing committee of either (or both) the Pennsylvania House of Representatives or Pennsylvania Senate

9711-472: The expense of local communities. Carbon trading has also been criticised as a form of colonialism , in which rich countries maintain their levels of consumption while getting credit for carbon savings in inefficient industrial projects. Groups such as the Corner House have argued that the market will choose the easiest means to save a given quantity of carbon in the short term, which may be different from

9828-519: The first Australian hung-parliament result in 70 years, the Gillard Labor government required the support of crossbenchers - including the Greens . One requirement for Greens' support was a carbon price, which Gillard proceeded with in forming a minority government. A fixed carbon-price would proceed to a floating-price ETS within a few years under the plan. The fixed price lent itself to characterisation as

9945-409: The fourth control period. The first pre-compliance auction of RGGI CO 2 allowances took place in September 2008. Regional auctions are held on a quarterly basis and are conducted using a sealed-bid, uniform price format. Since 2008, the RGGI states have held 54 auctions generating over $ 4.7 billion in proceeds. Auction clearing prices have ranged from $ 1.86 to $ 13. Any party can participate in

10062-409: The full marginal social costs of their actions. Regulation of emissions applied only to one economic sector or region drastically reduces the efficiency of efforts to reduce global emissions. There is, however, no scientific consensus over how to share the costs and benefits of reducing future climate change, or the costs and benefits of adapting to any future climate change. Carbon offsetting

10179-408: The full value of its free permits. Grandfathering may also slow down technological development towards less polluting technologies. The Garnaut Report noted that any method for free permit allocation will have the disadvantages of high complexity, high transaction costs, value-based judgements, and the use of arbitrary emissions baselines. Garnaut also noted that the complexity of free allocation and

10296-522: The global value of carbon markets was $ 948.75 billion. It is expected to reach 2.68 trillion dollars by 2028 and 22 trillion by 2050. Tradable emissions permits can be issued to firms within an ETS by two main ways: by free allocation of permits to existing emitters or by auction. In the first case, the government receives no carbon revenue. In the second it receives the full value of the permits, on average. In either case, permits will be equally scarce and just as valuable to market participants, such that

10413-681: The goals of the Paris Agreement . Article 6 of the Paris Agreement includes three mechanisms for "voluntary cooperation" between countries towards climate goals, including carbon markets . Article 6.2 enabled countries to directly trade carbon credits and units of renewable power with each other. Article 6.4 established a new international carbon market allowing countries or companies to use carbon credits generated in other countries to help meet their climate targets. Carbon offset and credit programs are coming under increased scrutiny because their claimed emissions reductions may be inflated compared to

10530-622: The idea made some progress, as in the Bonn meeting new tools and supervisory bodies was created. The rules of the European Union Emissions Trading System include the possibility of connecting it with other trading systems. This has already happened with the Switzerland emissions trading system . China expressed a support for a global carbon market, saying it is better than the EU Carbon Border Adjustment Mechanism . In 2023

10647-466: The input of state lawmakers. Wolf vetoed the bill because he believed that the imminent effects of climate change outweighs other issues. Wolf's decision was also heavily influenced by the economic and environmental benefits seen in other RGGI states. On July 13, 2021, Pennsylvania's Environmental Quality Board (EQB) voted (15–4) to adopt the rulemaking entitled "CO 2 Budget Trading Program", otherwise known as RGGI. The Offices of General Counsel and of

10764-468: The large amounts of money involved encourage non-productive rent-seeking behaviour and lobbying of governments — activities that dissipate economic value. At the same time, allocating permits can be used as a measure to protect domestic firms who are internationally exposed to competition. This happens when domestic firms compete against other firms that are not subject to the same regulation. This argument in favor of allocation of permits has been used in

10881-590: The lowest overall economic cost. "Economy-wide pricing of carbon is the centre piece of any policy designed to reduce emissions at the lowest possible costs". Ross Garnaut , lead author of the Garnaut Climate Change Review in 2011 Carbon emission trading began in Rio de Janeiro in 1992, when 160 countries agreed the UN Framework Convention on Climate Change (UNFCCC). The necessary detail

10998-511: The main driver of climate change . Instead, carbon emissions trading may accelerate investments into renewable energy , such as wind power and solar power . However, such schemes are usually not harmonized with defined carbon budgets that are required to maintain global warming below the critical thresholds of 1.5 °C or "well below" 2 °C, with oversupply leading to low prices of allowances with almost no effect on fossil fuel combustion. Emission trade allowances currently cover

11115-592: The means to reduce climate change. In September 2010, campaigning group FERN released "Trading Carbon: How it works and why it is controversial" which compiles many of the arguments against carbon trading. According to Carbon Trade Watch, carbon trading has had a "disastrous track record". The effectiveness of the EU ETS was criticized, and it was argued that the CDM had routinely favoured "environmentally ineffective and socially unjust projects". Some groups have claimed that non-existent emission reductions can be recorded under

11232-526: The media. It is also the usual unit representation in electrical power engineering. This common representation, however, does not comply with the style guide of the International System of Units (SI). Other representations of the unit may be encountered: The hour is a unit of time listed among the non-SI units accepted by the International Bureau of Weights and Measures for use with

11349-403: The monthly energy consumption of a typical residential customer ranges from a few hundred to a few thousand kilowatt-hours. Megawatt-hours (MWh), gigawatt-hours (GWh), and terawatt-hours (TWh) are often used for metering larger amounts of electrical energy to industrial customers and in power generation. The terawatt-hour and petawatt-hour (PWh) units are large enough to conveniently express

11466-438: The new, non-zero cost of emissions. This gives permit-liable polluters an incentive to reduce their emissions. However, if a firm sells the same amount of output as before that cap, with no change in production technology, the full value of permits received for free becomes windfall profits . However, since the cap reduces output and often causes the company to incur costs to increase efficiency, windfall profits will be less than

11583-477: The permit revenue. Auctions of units are more flexible in distributing costs, provide more incentives for innovation, lessen the political arguments over the allocation of economic rents , and reduce tax distortions. Recycling of revenue from permit auctions could also offset a significant proportion of the economy-wide social costs of a cap and trade scheme. The perverse incentive of grandfathering can be alleviated through auctioning. Regulatory agencies run

11700-427: The permits are scarce, they have value, and the benefit of that value is acquired in full by the emitter. The cost is imposed elsewhere in the economy, typically on consumers who cannot pass on the costs: The cost of a grandfathered permit may be regarded as the opportunity cost of not selling the permit at full value. As a result, profit-maximising firms receiving free permits will raise prices to customers because of

11817-918: The potential of creating a new speculative market through the commodification of environmental risks through financial derivatives . Annie Leonard 's 2009 documentary The Story of Cap and Trade criticized carbon emissions trading for the free permits to major polluters giving them unjust advantages, cheating in connection with carbon offsets , and as a distraction from the search for other solutions. In China, some companies started artificial production of greenhouse gases with sole purpose of recycling and gaining carbon credits. Similar practices happened in India. Earned credit were then sold to companies in US and Europe. Corporate and governmental carbon emission trading schemes have been modified in ways that have been attributed to permitting money laundering to take place. In 2003

11934-580: The potential to provide economic benefits through an increase in jobs, personal income, and $ 2 billion in gross state product through 2030. The highs and lows of the RGGI market can be largely attributed to declining emissions and allowance oversupply, price controls, policy intervention, and the Clean Power Plan of 2015 by the Obama Administration. RGGI has faced its fair share of obstacles, like any other emissions trading program; one of these

12051-415: The price at sale will be the same in either case. Generally, emitters will profit from permits allocated to them for free. But if they must pay, their profits will be reduced. If the carbon price equals the true social cost of carbon, then long-run profit reduction will reflect the consequences of paying this new cost. If having to pay this cost is unexpected, then there will likely be a one-time loss due to

12168-423: The rated capacity, larger consumers also pay for peak power consumption, the greatest power recorded in a fairly short time, such as 15 minutes. This compensates the power company for maintaining the infrastructure needed to provide peak power. These charges are billed as demand changes. Industrial users may also have extra charges according to the power factor of their load. Major energy production or consumption

12285-475: The reduced cap took effect in 2014. The 2016 Review established the ECR and an additional 30 percent reduction in the RGGI cap from 2020 to 2030. This review also included modifications to the CCR, offset categories, and the minimum reserve price. On December 20, 2005, seven governors from Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont signed a memorandum of understanding aimed at developing

12402-782: The regional carbon market program is a "regressive tax" that burdens residents. The lawsuit alleges the Commonwealth's constitution was violated by the APCB who "suspended and ignored the execution of law and invaded the General Assembly's legislative power." The lawsuit also claims that since joining RGGI carbon dioxide emissions from Virginia power plants in Virginia have decreased by nearly 17%, from about 32.8 million short tons in 2020 to about 27.3 million short tons in 2022. Funds paid by Virginia power plants for their excess emissions, meanwhile, have paid for more than $ 328 million to help low- and moderate-income Virginians with ways to cut energy use and more than $ 295 million for flood control,

12519-551: The regulatory disparity between jurisdictions as a loss of competitiveness. They may therefore make strategic production decisions that involve carbon leakage. To mitigate carbon leakage and its effects on the environment, policymakers need to harmonize international climate policies and provide incentives to prevent companies from relocating production to regions with more lenient environmental regulations. Free emission permits, given to sectors vulnerable to international competition, are one way of addressing carbon leakage by acting as

12636-559: The repeal of state regulations governing its participation in RGGI. Shortly thereafter, the Joint Commission on Administrative Rules, a legislative oversight commission, voted 5–4 on December 20, 2022, objecting to the APCB's action initiating the withdrawal. The APCB took its final step on June 7, 2023, voting 4–3 to adopt the regulation and sent to the Governor's Office for publication in the Virginia Register. On August 21, 2023,

12753-421: The risk of issuing too many emission credits, which can result in a very low price on emission permits. This reduces the incentive that permit-liable firms have to cut back their emissions. On the other hand, issuing too few permits can result in an excessively high permit price. An argument has been made for a hybrid instrument having a price floor and a price ceiling. However, a price-ceiling safety value removes

12870-574: The rulemaking on April 23, 2022. The Court further found that no exception to the mootness exception applied. The Court said the case raised "remarkable" legal questions of first impression but that any judgement given would be advisory and have no effect. The Court said counterclaims by the Senators who intervened "remain extant" (i.e., the initial question of concurrent or consecutively timeframe remains unresolved). Carbon emission trading Carbon emission trading (also called carbon market , emission trading scheme ( ETS ) or cap and trade )

12987-520: The secondary market for RGGI CO 2 allowances. Market participants can also obtain CO 2 allowances in secondary markets, such as the Intercontinental Exchange (ICE), or in over-the-counter transactions. The independent market monitor provides quarterly reports on the secondary market for RGGI allowances. The RGGI states have discretion over how they invest RGGI auction proceeds. They have reinvested proceeds, generated by RGGI auctions in

13104-711: The start of the Chinese national carbon trading scheme . The increasing costs of permits on the EU ETS have had the effect of increasing costs of coal power. A 2019 study by the American Council for an Energy Efficient Economy finds that efforts to put a price on greenhouse gas emissions are growing in North America. In 2021, shipowners said they were against being included in the EU ETS. Economists generally agree that to regulate emissions efficiently, all polluters need to face

13221-403: The temperature of 1 litre of water from room temperature to the boiling point with an electric kettle takes about 0.1 kWh. A 12 watt LED lamp lit constantly uses about 0.3 kW⋅h per 24 hours and about 9 kWh per month. In terms of human power , a healthy adult male manual laborer performs work equal to about half a kilowatt-hour over an eight-hour day. To convert a quantity measured in

13338-474: The use of 2.4  TWh of electricity, 1.6 TWh (5.3 × 10 British thermal units ) of fossil fuel, and the release of 1.7 × 10 short tons (1.5 × 10 tonnes ) of carbon dioxide. Over their lifetime, programs funded by RGGI investments estimate to avoid the use of 20.6 TWh of electricity, 22.3 TWh (76.1 × 10 British thermal units) of fossil fuel, and the release of 15.4 × 10 short tons (1.40 × 10 tonnes) of carbon dioxide. Energy efficiency represents

13455-519: The world has resulted in the uncertainties around such schemes in Australia, Canada, China, the EU, India, Japan, New Zealand, and the US. As a result, some organizations have had little incentive to innovate and comply, resulting in an ongoing battle of stakeholder contestation for the past two decades. Proposals for alternative schemes to avoid the problems of cap-and-trade schemes include Cap and Share , which

13572-564: Was considered by the Irish Parliament in 2008, and the Sky Trust schemes. Carbon emission trading without border adjustments for exports leads to reduced global competitiveness for carbon-intensive products. The Financial Times published an article about cap-and-trade systems, which argued that "Carbon markets create a muddle" and "...leave much room for unverifiable manipulation". Emissions trading schemes have also been criticised for

13689-486: Was left to be settled by the UN Conference of Parties (COP). In 1997, the Kyoto Protocol was the first major agreement to reduce greenhouse gases. 38 developed countries committed themselves to targets and timetables. The resulting inflexible limitations on GHG growth could entail substantial costs if countries have to solely rely on their own domestic measures. Carbon emissions trading increased rapidly in 2021 with

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