Virginia might join RGGI, if compatible

Monday, April 9, 2018

Will Virginia adopt regulations for greenhouse gas emissions trading that enable it to join nine other states participating in the Regional Greenhouse Gas Initiative?

The Regional Greenhouse Gas Initiative, or RGGI, is the first mandatory market-based program in the United States to reduce greenhouse gas emissions. RGGI was formed in 2007 by agreement of participating states. At present, nine states participate in RGGI: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont. Each participating state has adopted regulations under its own state laws, based on a model rule which requires the electric power sector to cap and reduce CO2 emissions, and which creates markets for trading emission allowances.

Virginia has not been a RGGI participant, but earlier this year the Virginia Department of Environmental Quality proposed a regulation to address carbon emissions from electric power generation. The proposed Virginia regulation would establish a Virginia component of a CO2 Budget Trading Program, much like RGGI.

On April 9, 2018, the nine states participating in RGGI submitted comments on key key program elements identified in Virginia’s proposed regulation for emissions trading, including the regulatory compatibility of Virginia’s proposal with RGGI’s existing 2017 Model Rule. In those comments, the RGGI states encourage "Virginia’s progress towards implementing a market-based program to reduce greenhouse gas emissions" and cite benefits from both the RGGI program and expanding its trading markets.

The RGGI states' comments also note the importance of ensuring that Virginia would be fully compatible with RGGI before entering it. The comments identify potential topics for assessing Virginia's potential compatibility as including "the alignment of key program elements, consistency in the use of regulatory language (such as the definitions of particular terms), and comparable stringency of the program as a whole." For example, the states encouraged Virginia to be more ambitious in setting a tighter state budget for annual covered carbon emissions than its proposed 33-34 million tons.

The Virginia Department of Environmental Quality's proposed carbon regulations remain pending before that agency.

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