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Initial Comments on RGGI Draft Model Rule. The Climate Trust May 2, 2006. Offset Additionality. Should the program allow for capture of incentives from other RE programs: Yes, but not in all instances.
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Initial Comments on RGGI Draft Model Rule The Climate Trust May 2, 2006
Offset Additionality • Should the program allow for capture of incentives from other RE programs: • Yes, but not in all instances. • To extent RPS is a requirement, not an incentive, may preclude eligibility because cost recovery in system and GHG reductions become baseline. • Other instances exist in which RE should be allowed to generate GHG offsets • Will refer to RE Working Group paper from 2005
Offset Additionality • Should the program allow for capture of incentives from other SBC programs: • Yes, but not in all instances. • The Climate Trust has collaborated with the Energy Trust of Oregon (SBC fund focused primarily on EE) to identify projects that meet market or program additionality tests • Maximum simple payback thresholds • Program funding capacity constraints • Historical market penetration data • This could also apply for RE technology funds
RGGI Offset Pilot Program • Public-Private Partnership managed by a third party, “public benefits corporation” • Governance: controlled entities, RGGI regulators, third-party administrator, stakeholder representation • Purpose: Solicit, evaluate and contract offset projects for future delivery: • Secure reductions outside of entities’ area control • Provide ongoing market information (price, transaction costs, etc.) • Identify other eligible project sectors • Continue reducing in “non-capped” sectors • Disseminate information on offset project quality
Energy Companies Obligations: Carbon funding Expectations: Credit for emissions reductions Mitigation of regulatory risk and uncertainty RGGI Regulators Obligations: Risk mitigation for participating companies Compliance oversight Expectations: Real emissions reductions Entity collaboration / cooperation Potential Roles for Partners Third-Party Administrator • Obligations: • Solicitation, Evaluation, Contracting, Contract Management • Expectations: • Cost recovery Stakeholder Representation • Obligations: • Oversight and support • Technical expertise • Expectations: • Accountability • Transparency
Controlled Entities RGGI Regulators (Advisory Body) Risk Mitigation $ Oversight CO2 Potential Pilot Structure Energy Companies RGGI Regulators (Advisory Body) Risk Mitigation $ Oversight CO2 Third-Party Administrator Stakeholder Representation $ CO2 Offset Projects
Accept Some Dissonanceto Optimize the Regulatory Moment • The challenge to reduce emissions on an economy wide basis means we must accelerate and/or re-direct investment into sectors and projects measurably reducing GHGs • Monetizing future streams of reductions from project activities will achieve that goal • Project life-cycle approach provides standardized processes that can lead to standardized accounting for “non-RGGI” sectors
Thank You. • Detailed written comments to follow Michael S. Ashford Deputy Director The Climate Trust mashford@climatetrust.org Phone: (503) 238-1915 Fax: (503) 238-1953