Push comes to shove this year for a groundbreaking effort to establish the first U.S. carbon trading market.
Maine deserves the plaudits it's received for being one of seven
northeast states to buck the federal government by attempting to
control climate-altering pollution.
However,
key bills to be brought before the 123rd Legislature will go a long way
to determining how successful Maine's program will be.
This past August, the seven states released a set of model regulations
to establish the flexible market for emissions of carbon dioxide, which
are produced when fossil fuels such as oil, gas and coal are burned.
Carbon
dioxide, or CO2, is one of several "greenhouse gases" that trap the
sun's heat in the earth's atmosphere. An overwhelming majority of
scientists now agree that unchecked CO2 pollution threatens to unhinge
the relatively stable global climate that has allowed our species to
flourish like none before.
Predicting
specific temperature changes in a given time frame is an inherently
uncertain process, but the relationship between CO2 levels and the
earth's temperature is a settled scientific fact.
An
October report by the Northeastern Climate Impacts Assessment team
suggests that by the end of the 21st century, Augusta's climate may
resemble southern Virginia's today if current pollution trends are
allowed to continue.
The
Regional Greenhouse Gas Initiative rule forms the framework for the
regional plan. However, each state must adopt its own regulations to
implement the proposal, which will regulate all fossil-fuel fired
electrical generating plants with a rated capacity of 25 megawatts or
more.
Cap
and trade systems are designed to eliminate the growth of airborne
pollutants from power plants and then ratchet pollution levels down as
market forces provide incentives for operators to become more and more
efficient.
Cap
and trade systems have helped reduce sulfur dioxide and nitrous oxide
pollution in the United States. Unless the Supreme Court rules that
states have no authority to regulate CO2, there's reason to think RGGI
will work here.
Under
RGGI, states are assigned tradeable allowances for each ton of CO2
emitted.. Maine's six covered power plants produce 5.95 million tons of
CO2 every year, so the state will be allotted an initial 5.95 million
allowances.
Total
emissions may not increase from 2009 to 2014, and then must decrease by
2.5 percent per year. Without RGGI, experts say our pollution could
grow 7 percent in that span. Compared with business as usual, RGGI is
designed to cut emissions 17 percent.
Analysts
predict that because of RGGI's modest goals and extended
implementation, its impact on electrical rates will be about 0.5
percent to 0.66 percent a year, certainly much less than impact of
constructing new generating plants in the years to come or even
year-to-year changes in the price of oil.
Maine's
contribution to the overall pollution reduction may also be small, but
when combined with the gains in New York, Massachusetts and the rest of
the region, they add up to a globally significant improvement.
And
if California which has one of the world's biggest economies joins
the market, it will vault the United States back into the kind of
leadership role it has enjoyed on other environmental issues.
Even
at a relatively low $5 a ton, Maine's 5.95 million allowances creates a
$30 million market in 2009. So it's easy to understand why allocating
these allowances will be a contentious issue.
Lawmakers
must decide who gets allowances, how much they'll cost and what
percentage of the revenues should be dedicated to strategic energy
improvements, like efficiency programs, or on rebates.
Gov.
Baldacci's signature on the memorandum of understanding commits Maine
to auctioning off at least 25 percent of them. But lawmakers could
auction off 100 percent of them. If they do, as many advocate, the
state's investment in energy efficiency and consumer benefit programs
can expand dramatically.
The
experience of the European Emission Trading System suggests that power
producers are going to factor the cost of these allowances into their
planning whether they have to pay for them initially or not. That means
giving allowances away means giving power producers a windfall.
Instead, Maine would be wiser to spend the revenue on energy efficiency programs, including those that benefit.
While we have enough electricity now, some day we'll run out. It's far cheaper to save electricity than build new plants.
If we can help save the planet while we're at it, we all win.
