Chris Martin and Joe Ryan
Regional carbon markets are expanding in North America, putting a price on emissions from more power plants even as President Donald Trump seeks to ease restrictions on coal companies.
Officials in New Jersey, Pennsylvania and Virginia are showing interest in joining the nine-state Regional Greenhouse Gas Initiative led by New York, and Canada’s Ontario plans to join California’s market with Quebec next year.
The leaders of California and New York are even voicing support for linking the two systems, which have both taken steps since July to extend these so-called cap-and-trade programs. States are leading the U.S. effort to curb greenhouse-gas emissions after Trump decided to pull out of the global Paris climate accord.
“This cap-and-trade system is working to reduce greenhouse gases and is generating millions of dollars of private investment,” California Governor Jerry Brown said at a New York press conference Wednesday. “I would very much welcome the state of New York.”
Phil Murphy, a Democrat running to replace New Jersey Governor Chris Christie in November, wants to rejoin the Northeast program “immediately,” according to an online policy statement. His Republican opponent, Lieutenant Governor Kim Guadagno, also supports rejoining RGGI, a move state lawmakers have passed and her boss has vetoed three times.
“Under the Trump presidency that’s stalled action on climate change, we’re seeing renewed interest in linking markets,” Jackson Morris, director of the Natural Resources Defense Council’s eastern energy project. Expanding and connecting markets “can expand reductions at lower cost.”
Pennsylvania, Virginia
In Pennsylvania, Governor Tom Wolf, a Democrat, pledged during his 2014 campaign to join RGGI but has since faced resistance from the Republican-controlled senate and assembly. And in Virginia, Governor Terry McAuliffe issued a executive order in May that the state develop market-based mechanisms to get “trading-ready,” as part of a plan to reduce carbon emissions.
“We will share our experience with anyone and if New Jersey’s next administration wants to join us again we’ll welcome them,” said Katie Dykes, chairman of both the RGGI board of directors and the Connecticut Public Utilities Regulatory Authority. “We have been communicating with people in Virginia.”
Connecticut has raised $178 million through its auctions and invested most of that toward energy efficiency and renewable power projects. Dykes plans to hold a hearing in Baltimore Monday to discuss plans for RGGI to reduce emissions by 30 percent from 2020 to 2030.
Europe, Asia
Europe already has a large regional cap-and-trade system, and similar markets are under development in Asia. Connecting carbon markets offers the opportunity to add scale and further reduce air pollution, said Paula DiPerna, special adviser to CDP, an environmental non-profit.
“It’s crucial that all these markets around the world link up together,” DiPerna said in an interview. “These markets have to be large and liquid, so linkage is essential to expand scope even if there are some growing pains.”
The push by public and private leaders from New York to California has put greenhouse gases on track to fall 12 percent to 14 percent below 2005 levels over the next eight years, according to a Sept. 18 study by NewClimate Institute and The Climate Group. The U.S. pledged cuts of 26 percent to 28 percent during that period under the global Paris pact brokered in 2015. Trump announced in June that the U.S. would exit the agreement.
New York Governor Andrew Cuomo is in favor of connecting the East Coast market with the California system.
“I think it is a very interesting idea,” Cuomo said at the event with Brown. ‘‘The devil is in the details. But I’d be very interested in it.”