Federal Cap and Trade

Background

As an official stakeholder in the RGGI process, ENE has played a leading role in developing the northeast's cap and trade system. ENE is now reaching out to federal delegates...
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As the U.S. explores major climate legislation, regional policies like RGGI are important precedents.  ENE and others are working to bring the lessons learned from RGGI to Washington, D.C. The RGGI Lessons Learned cover sheet and comprehensive document outline some design elements and solutions developed for the northeast program that could be included in a successful federal climate bill, such as:

• the role of energy efficiency
• auctioning of allowances
• using  a reserve price
• ensuring offset integrity

In a report published with the Progressive Policy Institute – Essential Lessons Learned from RGGI - ENE highlights the viability of cap and trade as an effective and affordable way to cut emissions.  The report emphasizes the importance of energy efficiency in reducing cap and trade costs and saving consumers money on energy bills.

Please see ENE's RGGI page for more information about the northeast's cap and trade program.

ENE is tracking the progress and development of proposals in Washington, such as the American Power Act (“APA”) discussion draft released by Senators John Kerry (D-MA) and Joseph Lieberman (I-CT).  ENE developed a brief overview document, describing the emissions cap and allocations and issue specific summaries on: energy efficiency, state programs, and forestry & offsets. (Full section-by-section summary coming soon.) ENE also issued a summary and a position statement on The American Clean Energy and Security Act of 2009 (“ACES”) authored by Rep. Waxman (Chairman, Energy and Commerce) and Rep. Markey (Chairman, Subcommittee on Energy & Environment), and passed by the House of Representatives in June of 2009.  

Federal legislation could have significant impacts on RGGI and on programs funded with RGGI auction revenue.  ENE developed a memo on potential federal preemption of RGGI to investigate these impacts and recommend policies that could mitigate effects on state authority and ensure continuing funding for key RGGI-funded energy efficiency programs.  
 

Other ENE federal cap and trade resources for policy makers and stakeholders:

• Economics 101 of Energy Efficiency describes how energy efficiency investments reduce demand for electricity and reduce emissions associated with electricity generation.  Under a cap and trade system, lower emissions reduce demand for emissions allowances and bring down the cost of a cap and trade program.
• ENE analyzed the House-passed ACES bill to determine potential efficiency funding and consumer savings for each state and for the nation as a whole.
   

ENE is also working to ensure that federal climate legislation recognizes the valuable role that forests play as a climate strategy and includes provisions for well-crafted forest offsets and supplemental incentive programs for landowners to protect forest carbon.  Please read more about ENE's Federal Forest Policy.

ENE is also tracking climate policy developments in Eastern Canada, such as the Western Climate Initiative and the evolving federal policy debate.

For more information about federal initiatives, visit ENE's Federal Energy Reform page.