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Virginia Set to Join Carbon Trading Market on Heels of Democratic Victory
By David Leestma
Following last week's Democratic victory for Ralph Northam in Virginia's gubernatorial race, regulators in the state will seek approval to join the East Coast's regional carbon-trading market, the RGGI.
The regulators' draft proposal, released on election night, would cap carbon emissions from Virginia's electricity sector by 2020 and reduce them by 30 percent over the coming decade. To accomplish this, Virginia would halt carbon emissions at either 33 million or 34 million tons per year and cut emissions by three percent each year, in accordance with RGGI commitments made in August.
In 2015 and 2016, Democratic lawmakers in Virginia had bills similar to the draft proposal defeated in the state legislature. The new proposal was crafted as an executive order to avoid approval from the state's Republican-led legislature.
Virginia Governor Terry McAuliffe issued the executive order last May, leaving its fate in the balance until last week's election. The plan would cut the state's emissions to benchmarks similar to those laid out in President Obama's Clean Power Plan.
Virginia's announcement comes as a number of states enact their own climate policies in the wake of the Trump administration's attempts to dismantle federal policies, including the Clean Power Plan. The RGGI, comprised of five Republican governors and four Democratic governors, has been seen as a test of states' commitment to cut carbon emissions.
By joining the RGGI, Virginia will enter into a carbon market with Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont. New Jersey is also expected to rejoin, after Chris Christie's withdrawal of the state in 2011.
If Virginia does join the carbon market, it will be the biggest emitter of the participating states, boosting the RGGI's 2020 cap by more than 40 percent. Virginia utilities would be permitted to sell carbon allowances at auctions if they are unable to cut emissions cheaply or buy allowances from others. Under the model, the state coalition sets an annually declining cap on carbon emission. States will sell fewer permits each year to power plant operators.
In 2015, more than $410 million in proceeds from the permit sales were invested in energy efficiency, clean and renewable energy, greenhouse gas abatement, and direct bill assistance, according to an RGGI report.
Supporters and critics of the program can be found among environmental groups. Supporters see the model as a pragmatic, market-based choice that's amenable to the American political climate. Opponents, on the other hand, view it as a "market-based pollution" scheme that caters to fossil fuel industries.
An analysis by the Acadia Center, a climate advocacy and research group, found that power plant emission in RGGI states fell by five percent since 2016.
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