“Today, ten states are taking a major step forward in the fight against global warming as they begin operations of the Regional Greenhouse Gas Initiative (RGGI), the country’s first mandatory GHG emissions market.
Some economic projections say that greenhouse gas limits will cause economic pain, while others predict economic gain. Why the big difference? It depends on the assumptions you choose–and now you can choose your own.
Kathryn Zyla, Joshua Bushinsky (Pew Center on Global Climate Change)
The Greenhouse Gas Accord announced by
ten Midwestern governors in November 2007
involves nearly one fourth of U.S. greenhouse
gas emissions in a regional agreement to improve
energy security and design a greenhouse gas
(GHG) reduction program. Among the strategies
described in this accord is the use of a market-based,
multi-sector cap-and-trade mechanism
to reduce emissions. As the Midwest explores
options for such a program, it will face a variety
of design choices regarding program goals, costs,
and equity. This paper is intended to guide many
of these choices by describing some of the options
This paper begins with a general overview of the
basic building blocks of cap and trade, followed
by a discussion of the potential scope of coverage
of a program, including what entities might be
regulated and which emissions. The paper then
focuses on how to set the initial emissions cap
and the trajectory for emissions reductions under
a potential program. An examination of the
options for distributing allowances, or permits to
emit, follows. The document then explores how
a program might grant early reduction credits,
offer project-based offset credits, and provide
other potential cost-containment measures. The
potential for linking with other similar programs
is then briefly discussed.
This project facilitates the development of globally consistent markets
for greenhouse gas emission reductions, which will form a critical
component of both U.S. policies and international agreements on climate
Outlines economic and “fairness” reasons why supporting the sale of the cost-share portion of agricultural nutrient and sediment reductions is not the most appropriate policy for the USDA and other government agencies to adopt.
Compares a number of policy options to reduce nutrient loss in the Mississippi River Basin from agricultural sources, provide new income sources for farmers, and help address hypoxia in the Gulf of Mexico.