Date: 17-Dec-08
Country: US
NEW YORK - Carbon dioxide emissions from power generators in 10 US Northeastern states are on track to fall steeply in 2008 on softer prices for cleaner-burning natural gas and lighter electricity demand, according to a report released Monday.
The report was issued by Environment Northeast, a research and advocacy group that helped the 10 states from Maryland to Massachusetts form the Regional Greenhouse Gas Initiative (RGGI), a pact aiming to force utilities to cut emissions of the planet-warming gas by placing a cap on their pollution starting in January.
Carbon dioxide output this year from the 10 states is on track to be 16 percent below the group's cap of 188 million tons of emissions, according to the report. Environment Northeast reported in September that 2007 emissions were about 9 percent below the cap.
If utilities in the states continue to burn natural gas, rather than comparatively dirtier coal and oil, and power demand keeps slipping, it could mean that RGGI will have an easier time achieving its goals of cutting emissions 10 percent by 2018 than initially thought.
"When RGGI was negotiated, everyone thought the business-as-usual emissions trend would be up," said Derek Murrow, the lead author of the report.
But natural gas use soared this year as it became less expensive to burn compared to oil and coal. And electricity consumption in RGGI states through November dropped 0.75 percent from 2007, which has countered expectations of increases in power demand from homeowners and other customers, the report said.
The example could hold a lesson for federal lawmakers hoping to form a tough national cap-and-trade market that in itself could lead to emissions cuts. Backers of such markets say they will cut pollution by fixing a price on pollution from greenhouse gases. They say that would encourage conservation and investments in virtually emissions-free alternatives like wind and solar power.
"Setting the cap at the right level is the most important step in creating a cap-and-trade market," Murrow said.
Federal lawmakers may also want to set up the market with compliance periods that are renewed every year instead of over several years like RGGI's, he said. That would allow opportunities to adjust the cap as emissions fluctuate on reasons that are beyond control of the market, like weather.
RGGI will hold its second quarterly auction of permits to emit carbon within the 10 states on Dec. 17. In the first auction in September, permits sold for $3.07 per ton, bringing member states some $39 million. In September six of the 10 states participated, while the entire group is expected to participate in Wednesday's auction.
(Reporting by Timothy Gardner, editing by Jim Marshall)
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