A major legislative goal for the Forest Society in the 2008 legislative session is enactment of House Bill 1434, a bill providing the authority for the New Hampshire to implement the Regional Greenhouse Gas Initiative (RGGI). RGGI (pronounced "reggie") is an effort by 10 Northeastern States, including New Hampshire, to establish a cap and trade program for emissions of carbon dioxide from electrical generating plants of 25 megawatts or larger that emit carbon dioxide (CO2) from the burning of fossil fuels. In NH, RGGI would apply to Public Service of NH generating plants in Bow and Portsmouth and two natural gas generating plants; Newington Energy (Con Ed) and Granite Ridge in Londonderry.

If adopted, HB 1434 would require CO2 emissions from these electric generating plants to be capped at 8,620,420 tons which is approximately equal to the average of actual emissions from 2003-2004. The emission cap would decrease 2.5% per year beginning in 2015 to 7,758,378 tons by 2019. The subject power plants must obtain an "allowance" for every ton of annual emissions. One compliance method would be for plants to acquire allowances from other plants that have achieved more reductions than required. States may auction their allowances to make them available to any RGGI power station through a market trading program. In addition, subject power plants can purchase offsets from non-utility carbon reduction projects approved by RGGI. It is projected that with a modest increase in energy efficiency or greater use of lower-carbon fuels (e.g., natural gas versus coal), the regional cap on CO2 cap will be readily achievable.

The ten RGGI states have an aggregate economy that would be the world's 7th largest economy if the region was an independent nation. RGGI was initiated by former New York Governor George Pataki in 2003 in part to motivate the federal government to act on climate change and in part to provide the participating RGGI states with a plan of action in the absence of a federal climate policy.

The Forest Society strongly supports HB 1434 as a modest but important first step in the larger task of reducing carbon dioxide emissions economy wide, and encourages Society members to ask your representatives in the Legislature to support it when it comes before them for a vote. The bill is currently before the House Science and Technology Committee (click here for an STE Committee roster). The Forest Society presented testimony before the Committee at it's hearing on the bill on January 17 (click here for a copy of the Society's testimony). STE Committee Chairman Naida Kaen (D-Lee), a lead sponsor of HB 1434, has appointed a working Subcommittee chaired by STE Committee member Thomas Fargo (D-Dover) to scrutinize the bill and report back to the full committee with a recommendation.

This bill has strong bipartisan support, the support of Governor John Lynch, the Senate President Sylvia Larsen (a lead sponsor) and the House leadership. In addition to asking your elected representatives to support the bill, please express your thanks to the bill's primary sponsors: Rep. Naida Kaen, Rep. Suzanne Harvey (D-Nashua), Rep. Richard Barry (R-Merrimack), Sen. Margaret Hassan (D-Exeter), Sen Martha Fuller Clark (D-Portsmouth), Sen. Peter Bragdon (R-Milford), Sen. Robert Odell (R-Lempster) and Sen. Sylvia Larsen (D-Concord). Click here for information about your state legislators.

One tool RGGI provides as an alternative to the purchase of allowances is the purchase of pre-qualified, verifiable carbon offsets. Individual emitters can only use offsets in place of a total of 3.3% of their total annual allowance purchases. The only pre-qualified forestry offset under RGGI at this time is the planting of new trees (called "aforestation"). Since this is not likely to be a significant tool in a state that is already 84% forested, the Forest Society is actively exploring how to include forest management activities that accelerate the storage of carbon in trees through photosynthesis as a pre-qualified offset under RGGI.

Most of the allowances for all ten states will be sold at regional auctions held quarterly. HB 1434 provides that the revenues from the sale of New Hampshire allowances will go into a "Greenhouse Gas Emissions Reduction Fund," the purpose of which is to support energy efficiency, conservation and demand response programs. The Public Utilities Commission is charged with administering the fund.

NH DES Commissioner Tom Burack and DES Air Resources Director Bob Scott have been actively involved in preparing the legislature and the vast group of New Hampshire stakeholders (including everyone who pays an electric bill) for RGGI as part of New Hampshire's energy future. The Forest Society, as one of these stakeholders, will be actively engaged in educating its members and all New Hampshire legislators on the need for RGGI and the requisite authority to make it work in the Granite State.

RGGI is designed to reduce CO2 emissions from power plants in the ten states, while maintaining energy affordability and reliability and accommodating, to the extent feasible, the diversity in policies and programs in individual states. After the cap-and-trade program for power plants is implemented, the states may consider taking additional public policy actions to reduce CO2 emissions from other market sectors --- such as transportation, manufacturing and the heating of residential and commercial buildings.