New EDF Study Reveals Shocking Benefits of “80 by 30” RGGI Target—A Game-Changer for U.S. Climate Goals!

Stepping Up Climate Ambitions with RGGI

The Regional Greenhouse Gas Initiative (RGGI) is at a pivotal juncture as it embarks on its third program review. To effectively combat the climate crisis, the program must aim high, leveraging the cost-saving potentials of the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA). An ambitious approach is vital.

Aiming for an 80% reduction in emissions from 2005 levels by 2030 (80 by 30) is essential. This target could reduce emissions by 182 million tons between 2025 and 2035, compared to a linear path to zero by 2040. This ambitious goal would support the U.S.’s 2030 climate commitments and maximize IRA funding benefits.

EDF’s power sector modeling indicates that RGGI states can achieve significant emission reductions cost-effectively. Aligning with the 80 by 30 target is a “no regrets” move that aligns with national climate objectives. EDF’s model even suggests an 85 by 30 cap could achieve greater reductions at a modest cost.

Near-term power sector reductions are crucial for decarbonizing other sectors like transport and industry. Setting a cap aligned with at least 80 by 30 lays a strong foundation for broader decarbonization efforts across various sectors.

Another story you will enjoy : From Arctic Ingenuity to Global Resorts: How Finnish Snow-Saving Mats are Revolutionizing Skiing Amid Climate Chaos

Why Immediate Action is Essential

EDF emphasizes that setting an 80 by 30 interim target yields better results than aiming for 2035 or 2040 alone. Without a 2030 target, crucial emission reductions might be missed, especially as climate impacts accelerate. Rapid cuts in power sector emissions are essential to achieving the U.S.’s 50-52% economy-wide reduction target by 2030.

Limiting early-year allowances incentivizes swift CO2 emission reductions, reducing cumulative emissions over time. CO2’s long atmospheric lifespan means every year’s emissions add to the total atmospheric stock, influencing long-term warming. Thus, cumulative emissions are a critical measure of climate benefits.

• Immediate action maximizes cumulative emission reductions.
• Delaying ambitious caps leads to higher emissions.
• Early reductions are more cost-effective.

The sooner an ambitious cap is set, the greater its impact on cumulative emissions. Delays in finalizing the program review result in continued higher emissions under the current cap. Every year counts in the race to achieve climate goals.

Steps RGGI States Must Take

Firstly, with 2030 approaching, RGGI states must swiftly finalize the program review and implement a new, ambitious cap. The earlier this cap is adopted, the more substantial its effect on cumulative emissions. Facilities must take additional abatement measures now to avoid continued greenhouse gas production under the current cap.

Secondly, the 2030 cap must be as ambitious as possible. This ensures RGGI states align with U.S. climate targets under the Paris Agreement. Such ambitious targets drive significant cumulative emission reductions compared to a straight-line path to zero by 2040.

An interim 80 by 30 cap, leading to a 0x40 cap, results in 19% lower cumulative emissions between 2025 and 2040. An 85 by 30 cap further reduces emissions by 30% relative to a straight path to zero by 2040, emphasizing the need for ambitious interim targets.

Another story you will enjoy : EU's Shocking Emissions Plunge: Outpacing Global Powers & Surpassing 1990s Milestones in 2023!

EDF’s modeling underscores that adopting an ambitious cap now, when reductions are cheaper, ensures serious environmental benefits at low cost. The stakes are high, and delaying ambition hampers progress.

EDF’s Comprehensive Modeling

EDF’s new analysis uses the FACETS model to evaluate various cap scenarios under different cost, demand, and policy assumptions. This model explores how different cap trajectories impact allowance prices, emissions, and electricity costs across multiple scenarios.

EDF’s modeling complements RGGI Inc.’s analysis by ICF, focusing on deep decarbonization by 2035 and 2040 with and without an interim 80 by 30 target. EDF also examined the effects of banking rules, leakage mitigation, and cost containment reserves.

Beyond cap scenarios, EDF assessed the impact of cost assumptions for renewables and natural gas under high electricity demand conditions. FACETS approximates net-zero emissions with a 95% reduction over 2005 levels, providing valuable insights.

EDF’s findings align with ICF’s, demonstrating that an ambitious 2030 cap yields significant emissions benefits at low cost. This analysis supports the case for a more ambitious RGGI cap.

Achieving High Ambition at Low Cost

Emission reduction benefits can be attained at a low cost. An 80 by 30 interim target on the path to deep decarbonization by 2040 keeps allowance prices below recent RGGI averages through 2030. Even under an 85 by 30 cap, prices remain manageable, indicating cheap abatement opportunities.

Another story you will enjoy : UChicago's Surprising Climate Venture: A New Institute Challenges the World's Dependence on Fossil Fuels

EDF’s analysis shows a more ambitious cap has minimal impact on electricity costs. Delivered electricity costs follow similar trajectories with or without the 80 by 30 target, despite the emissions benefits. Wholesale electricity costs are expected to rise, but the cap does not significantly drive these costs higher.

Gas prices and high electricity demand pose larger risks to electricity prices. Under reference assumptions, an 80 by 30 cap results in only a 2% increase in electricity prices. Actual consumer bill impacts are likely smaller, as states use strategies to mitigate costs.

The IRA’s investments help lower the cost of clean energy, reducing the financial burden of transitioning from fossil fuels. RGGI must take advantage of these investments to lock in policies ensuring cost-effective emissions reductions.

Conclusion

EDF’s modeling demonstrates that ambitious RGGI caps, aligned with necessary electric power sector reductions, do not significantly increase costs. An 80% reduction below 2005 levels by 2030 offers substantial climate benefits without major price impacts. RGGI states should prioritize this interim goal in their third program review to achieve meaningful climate progress.