1. Regional Greenhouse Gas Initiative RGGI John Marschilok, P.E. Environmental Engineer Department New York State Department of Environmental Conservation Office of Climate Change 625 Broadway Albany, New York 12233-1030 Phone (518) 402-8448Fax (518) 402-9021 E-mail: jxmarsch@gw.dec.state.ny.usjxmarsch@gw.dec.state.ny.us

2. The Regional Greenhouse Gas Initiative (RGGI) Regional effort among 10 states to cap and reduce carbon emissions Focus on power sector Generators ≥ 25 megawatts Region wide and state specific caps Auction rather than allocation based allowance distribution

3. Offset Allowances Requirements: real, additional, verifiable, enforceable and permanent Purpose price relief expand beyond power sector Cautions ensure integrity all reductions should not come from offsets

4. Offset Categories 1.Landfill methane capture and destruction 2.Reduction in emissions of sulfur hexafluoride (SF6) 3.Sequestration of carbon due to afforestation 4.Reduction or avoidance of CO 2 emissions from natural gas, oil, or propane end-use combustion due to energy efficiency 5.Avoided methane emissions from agricultural manure management operations

5. Additionality 1.The offset project can not be required pursuant to any local, state or federal law, regulation, or administrative or judicial order. 2.Offset allowances shall not be awarded to an offset project that includes an electric generation component, unless the project sponsor transfers the legal rights to any and all attribute credits generated from the operation of the offset project that may be used for compliance with a renewable portfolio standard or other regulatory requirement, to the department or its agent. 3.Offset allowances shall not be awarded to an offset project that receives funding or other incentives from any benefit system, or funds or other incentives provided through energy efficiency and clean energy technology account allocation. 4.Offset allowances shall not be awarded to a project that is awarded credits or allowances under any other mandatory or voluntary greenhouse gas program.

6. Offset General Requirements Location – any RGGI state or any state or US jurisdiction that signed MOU Project Sponsor – sponsor must establish a general account under subdivision 242-6.2(b) Timing – projects initially commenced or after December 20, 2005

7. Offset Submittal Requirements Consistency application – must be verified by accredited independent verifier and includes: General Information Project description Baseline determination Calculation of emission reductions Monitoring and verification plan Monitoring and verification report - must be verified by accredited independent verifier.

8. Accreditation RGGI states accreditation builds on ANSI accreditation to ISO 14065 Potential verifier receives accreditation from RGGI state where offset project is located RGGI states may accept accreditation from other RGGI states RGGI Model Rule – verifier shall be accredited for a period of three years from the date of application approval

9. Afforestation Eligibility Project shall occur on land that has been in a non-forested state for at least 10 years preceding commencement of the offset project Eligible offset projects shall be managed in accordance with widely accepted environmentally sustainable forestry practices and designed to promote the restoration of native forests by using mainly native species and avoiding the introduction of invasive nonnative species. If commercial timber harvest activities are to occur, certification must be obtained, prior to any harvest activities at the site, through the Forest Stewardship Council (FSC), Sustainable Forestry Institute (SFI), American Tree Farm System (ATFS), or such other similar organizations as may be approved by the Regulatory Agency.

10. Afforestation Carbon Sequestration Permanence The project sponsor shall place the land within the offset project boundary under a legally binding permanent conservation easement, which requires the land to be maintained in a forested state in perpetuity. The conservation easement shall include a requirement that the carbon density within the offset project boundary be maintained at long-term levels at or above that achieved as of the end of the CO 2 offset crediting period The conservation easement shall require that the land be managed in accordance with environmentally sustainable forestry practices A ten (10) percent discount is applied to the net sequestered carbon to account for potential losses. This ten (10) percent discount shall not be applied if the project sponsor retains long-term insurance that guarantees replacement of any lost sequestered carbon for which CO 2 offset allowances were awarded.

11. Offset Program Status Offset staff working group reviewing documents to meet June 30, 2009 deadline for projects commencing between December 20, 2005 and December 31, 2008. Information to be posted soon on www.rggi.org www.rggi.org Application for projects commencing after January 1, 2009 must be submitted within 6 months of project commencement