1. Climate Change John Sherwell PPRP

2. Two major initiatives 1 – RGGI http://www.rggi.org/http://www.rggi.org/ All NE states except PA Component of the HAA Affects fossil generating units >25MW A cap-and-trade program Stabilize emissions at current levels from 2009 through 2015, then to achieve a 10% reduction in emissions by 2019.

3. Compliance Own allowances to cover emissions Reduce emissions Credits from offset projects StateEmissions Cap (Tons CO2) CT10,695,036 DE7,559,787 MA26,660,204 ME5,948,902 NH8,620,460 NJ22,892,730 NY64,310,805 RI2,659,239 MD37,505,984 TOTAL188,078,977 RGGI Inventory

4. Each state sets fraction to auction (>25%) MD ~100% allowance auction Allocations for new generation economics [PPA terms] renewables Owning allowances

5. Four RGGI-wide auctions/year (2 in 2008) First auction announced – Sep 25 2009 compliance year allowances Reserve price $1.86 12,565,387 allowances on auction MD placed 5,331,781 allowances on auction Not all states are participating – regs not in place MD regs final authorize: trading program, auction Next auction in Dec Auctions

6. Uniform price, sealed bid, one round format Bids are in blocks of 1,000 allowances Can’t bid for more than 25% of allowances Demand < supply Allowances sell at reserve price Demand > supply Allowances sell at marginal price MEA recipient of MD net revenues Auctions

7. Emission Reductions Credits for early reductions Switching from oil to gas – summertime Biofuels Biodiesel in CTs Other biomass co-firing

8. Offsets RGGI compliance offsets currently limited to:  Landfill methane capture and destruction;  Reduction in emissions of sulfur hexafluoride (SF 6 );  Sequestration of carbon due to afforestation;  Reduction or avoidance of CO 2 emissions from natural gas, oil, or propane end-use combustion due to end-use energy efficiency; and  Avoided methane emissions from agricultural manure management operations.

9. 2 - Maryland Commission on Climate Change Formed April 20, 2007 by Executive order of Governor O’Malley At a minimum reduce GHG emissions –To 1990 levels in 2020 –80% from 2006 levels by 2050 Working groups formed for planning Two major initiatives

10. Working Groups Scientific and Technical –UM lead Greenhouse Gas and Carbon Mitigation –MDE lead Agriculture, Forestry and Waste Management Cross Cutting Energy Supply Residential, Commercial and Industrial Transportation and Land Use Adaptation and Response –DNR lead Existing Built Environment and Infrastructure Future Built Environment and Infrastructure Resource and Resource-based Industries Human Health, Safety and Welfare

11. 2-Phase Approach Phase 1 – develop policy options –Report delivered the Office of the Governor –Coming soon to a website near you (http://www.mdclimatechange.us/)http://www.mdclimatechange.us/ Phase 2 – develop implementation plans –Agencies develop plans early 2009

12. Questions?