Virginia has a cap-and-trade program on the books and ready to go that should reduce greenhouse emissions from power plants by 30 percent. Unfortunately, the program is effectively on hold due to a budget restriction preventing the state from spending any money to administer the program.
Under the program developed and approved by the State Air Pollution Control Board, Virginia utilities would need to hold an allowance for each ton of greenhouse gas they produce by burning fossil fuels. The number of allowances will be reduced each year, resulting in a 30 percent reduction over the next decade. Utilities can buy and sell the allowances from a regional auction, called the Regional Greenhouse Gas Initiative, which is a proven and effective marketplace that has been around for a decade. In this system, utilities have the flexibility to burn more fossil fuel as long as they buy additional allowances. But, if they can reduce their emissions more quickly, utilities can sell any surplus credits into the marketplace to the benefit of their customers.
The regional program is working. The nine states already participating in the Regional Greenhouse Gas Initiative have cut carbon dioxide emissions from power plants by more than 40 percent, while experiencing billions of dollars in net economic benefits and public health gains. The success of these programs is being reinforced in the west and Midwest where comparable programs targeting carbon emissions are underway and it was a similar cap-and-trade program that helped address the acid rain crisis of the 1990s.
By taking advantage of this existing regional program, Virginia’s costs to administer the program are low—only about $200,000 a year, a small part of the state’s $58 billion operating budget.
“Climate change is a big problem and there’s no doubt it can feel daunting,” said SELC Attorney Nate Benforado. “But we have a program that is ready to go, that will benefit Virginia’s economy, improve public health, and is an inexpensive step we can take to start addressing climate change now.”