Gov. Cuomo aims to link U.S. Northeast’s carbon market with Calif.’s

By Elizabeth Harball | 10/09/2015 08:40 AM EDT

New York Gov. Andrew Cuomo (D) yesterday announced his state will “explore the possibility” of linking the Northeast’s carbon cap-and-trade system with California’s, envisioning a “North American market” where emissions allowances are bought and sold across the United States as well as in Canada.

New York Gov. Andrew Cuomo (D) yesterday announced his state will "explore the possibility" of linking the Northeast’s carbon cap-and-trade system with California’s, envisioning a "North American market" where emissions allowances are bought and sold across the United States as well as in Canada.

During a speech alongside former Vice President Al Gore yesterday at Columbia University, Cuomo called carbon markets "a powerful tool for reducing the pollution that is contributing to climate change," but added, "Small regional coalitions are not enough."

"Therefore, today, I have directed my administration to reach out to our partners in other states, such as California, as well as the Canadian provinces, about building a broader North American market to collectively reduce harmful emissions," Cuomo said. "Hopefully, this will drive a national discussion to every state in the nation."


In a release made public after the remarks, the governor’s office added that the administration will pursue a linkage between the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade system that involves eight other Northeastern states, and California’s carbon market, which is also linked to the Canadian provinces of Quebec and Ontario.

"Connecting these markets would be more cost-effective and stable, thereby supporting clean energy and driving international carbon emission reductions," the release stated. "New York State will also engage other states and provinces to build a broader carbon market and further drive an international discussion that encourages government action on carbon emissions."

Praising both New York and California for the states’ aggressive climate policies in a speech after Cuomo’s remarks, Gore said, "We really do have the prospect of seeing the emergence of a North America market in carbon emissions and the instruments that will accelerate that decarbonization of our economy."

This announcement was also cheered by environmental advocates.

"The Governor’s commitment to work toward a North American carbon market underscores the importance of putting a price on carbon and highlights the effectiveness of existing cap-and-trade programs, including the nine-state Regional Greenhouse Gas Initiative (RGGI) and the California-Quebec system," Derek Walker, associate vice president of global climate at the Environmental Defense Fund, said in a statement.

However, representatives for the Regional Greenhouse Gas Initiative and the California Air Resources Board, which administers the state’s cap-and-trade system, provided no additional details on the potential linkage. It remains unclear if the two systems are actively discussing the idea.

"We are committed to working with others to expand the number of jurisdictions that put a price on carbon," a spokesman for the California Air Resources Board said in a statement.

No immediate response from the West

RGGI did not return a request for comment in time for publication, directing an emailed inquiry to the New York State Department of Environmental Conservation.

Carbon trading between states is widely seen as a key mechanism that may be used to comply with the Obama administration’s sweeping new rule regulating greenhouse gas emissions from power plants. Yesterday, acting EPA air chief Janet McCabe told the House Energy and Commerce Subcommittee on Energy and Power that the Clean Power Plan "does not set in place a cap-and-trade program," but she did say that interstate trading is a tool that could help states maintain an affordable and reliable power supply (Greenwire, Oct. 7).

RGGI is regarded as a model for interstate trading under the rule. New York, for example, is expected to easily meet EPA’s targets laid out by the final Clean Power Plan, and a recent analysis by the nonprofit Acadia Center determined that it and other states will be able to use RGGI to comply with the Clean Power Plan if the program makes only "a few minor changes."

Bob Perciasepe, president of the Center for Climate and Energy Solutions, said in an emailed statement that "market-based approaches to reducing carbon emissions are already proving to be effective and efficient," adding that many additional states "are looking into how they could use these approaches to implement the Clean Power Plan."

Cuomo’s announcement was made along with a series of other commitments yesterday, including a $1 billion pledge to the New York solar industry and a memorandum of understanding between New York and other states, provinces and cities called the Under 2 MOU committing to help maintain Earth’s average temperature rise below 2 degrees Celsius. California, which has been gathering participants to the MOU ahead of the U.N. climate talks in December, now counts 42 signatories in 19 countries.

"Climate change is a reality, and not to address it is gross negligence by government and irresponsible as citizens," Cuomo said.

California Gov. Jerry Brown (D) put out a statement praising Cuomo for signing the MOU but not mentioning the possibility of linking markets.

"Across the globe, imaginative leaders of states, provinces and cities are taking decisive action to stem the mounting threats of global warming," Brown said. "Governor Cuomo’s participation marks a real milestone in the subnational movement to block dangerous climate change."

Reporter Debra Kahn contributed.