Mass. Governor Announces New Carbon Dioxide Emissions Reduction Plan

After pulling out of the Regional Greenhouse Gas Initiative (RGGI) earlier this month, Massachusetts Gov. Mitt Romney (R) announced that the Bay State would pursue its own new carbon dioxide emissions (CO2) reduction plan.  The reductions go into effect January 1, 2006, but power generators will not be required to comply until 2007.

In particular, the plan targets Massachusetts' six oldest coal- and oil-fired power plants.  It calls for generators to cap emissions at 1997-99 levels, and includes a production limit of 1800 pounds/MWh.  The Governor's plan allows generators to meet limits by finding offsets in the Northeast region.  Additionally, the plan provides a "safety valve" meant to guard against excessive price increases:  If the price of available offsets reaches $6.50/ton for 12 months, then the generators would be able to shop for offsets anywhere in the world, and if the price reaches $10/ton, they could meet their obligations by paying into a new Greenhouse Gas Expendable Trust.  The money in the trust would be used to invest in CO2 emission offset projects.  The plan also includes reductions for sulfur dioxide, nitrogen oxides, and mercury.

Gov. Romney's intent is to work side-by-side with the RGGI, which is an emissions reduction work-in-progress of nine Northeastern states, and includes a cap-and-trade system, without price caps.  The Governor explained that if Massachusetts joins the RGGI,  its regulations could be modified to act in coordination with RGGI's plan.  However, critics of the Governor's plan claim that it is not compatible with the RGGI plan, and that the RGGI plan would better protect ratepayers by auctioning allowances and using the money for energy efficiency improvements, instead of allowing plant owners to avoid pollution reductions by paying a fee.