Dive Brief:
- As part of a joint legislative agenda proposed yesterday by Gov. Terry McAuliffe and Governor-elect Ralph Northam, Virginia could become the first southern state to put a cap on carbon emissions by formally joining the Regional Greenhouse Gas Initiative.
- In November, after Northam was elected, the Virginia State Air Pollution Control Board approved draft regulations to cut carbon emissions from power plants and link the state with the nine-state carbon cap-and-trade program.
- The new legislation would enable Virginia to directly auction the allowances, and invest the revenues in programs that benefit the public.
Dive Insight:
The idea of Virginia joining RGGI has been kicked around for a while, but this marks the first actionable step toward solidifying it.
"Virginia will move forward with a carbon reduction program that links to the broader RGGI market regardless of what occurs this session," according to a joint summary of the proposal. But the legislation McAuliffe and Northam unveiled would give the General Assembly "an opportunity to weigh in on how the revenue is allocated."
The carbon reduction program outlined in November's regulations will link to the broader carbon market established through RGGI. However, the state cannot formally join RGGI or spend the revenues without lawmakers' authorization.
RGGI is a collective of nine Northeast and Mid-Atlantic states and is the first market-based regulatory program in the United States aimed at combating climate change. Member states include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont.
Last month RGGI announced the results of its 38th allowance auction. More than 14 million allowances were sold at auction with a clearing price of $3.80. Bids for the carbon allowances ranged from $2.15 to $8.00. The 2017 RGGI cap was 84.3 million short tons, and it declines 2.5% each year until 2020.
A report last year found that in 2015, more than $410 million in RGGI proceeds were invested in programs including energy efficiency, clean and renewable energy, greenhouse gas abatement and direct bill assistance. The largest share of the investments, almost two-thirds, were directed to energy efficiency.
