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NY Governor Spitzer unveils cutting-edge global warming regulations

By ( - January 25, 2007

Fulfilling his pledge to provide sound environmental stewardship, Governor Eliot Spitzer today unveiled new draft regulations to carry out a cutting-edge regional program that will cut greenhouse gases emitted by New York power plants. Today, New York issued draft regulations for implementing the Regional Greenhouse Gas Initiative (RGGI).

RGGI is an agreement by 10 Northeastern states to reduce greenhouse gas emissions. Under RGGI, participating states will each issue their own regulations, and when fully implemented RGGI will achieve a 16 percent reduction in emissions from projected business-as-usual emissions. Under the groundbreaking draft regulations established by Governor Spitzer, a power plant would have to buy enough carbon credits or allowances (one allowance per ton of emissions) to cover its emissions in a flexible, market-based system that are similar to those used to combat acid rain.

“Global warming is the most significant environmental problem of our generation, and by helping lead this regional program, we can reduce emissions from power plants – one of the main sources of carbon dioxide emissions in the Northeast,” said Governor Spitzer. “Absent federal leadership, states across the nation are taking action to cut greenhouse gas emissions and reduce their impact on the environment. This is a new approach and one that should be replicated at the federal level.”

In a major departure from previous programs, the state will not simply give away allowances to power plants. From the start, companies will have to buy allowances through an auction for every ton of carbon dioxide they emit. New York was the first state to advocate auctioning off 100 percent of its pollution allowances – a strategy that most other RGGI states will likely follow.

Power plants pump out 25 percent of the total annual carbon dioxide emitted in New York State. For the initial six years of the RGGI program, carbon emissions will be capped at current levels. In 2015 and in each of the subsequent three years, the cap will be reduced by 2.5 percent for an overall reduction of 10 percent.

Proceeds from the auction would go toward energy efficiency programs and renewable energy projects. The program would also provide opportunities for power companies to offset their emissions through other “green” investments.

Senator Martin Connor said: “I praise Governor Spitzer for his leadership in announcing New York State’s plans for the Regional Greenhouse Gas Initiative. New York will be in the vanguard of leading the nation and the Northeast by creating innovative policies to clean our environment, air and water, by reducing carbon emissions, and by using energy from our power plants more efficiently and effectively. The recommendations being discussed today will make our city and state a healthier place for our children and their children to live in well into the 21st Century and beyond.”

Senator Liz Krueger said: “We all need to face the reality of global warming, as well as our responsibility both as individuals and as a state to address this crisis. I am gratified that Governor Spitzer is acting aggressively to make New York State a leader in the fight to reduce greenhouse gases.”

City Council Speaker Christine Quinn said: “The City Council has been working to increase energy efficiency in buildings, which account for nearly 80 percent of New York City’s global warming emissions, and to reduce congestion and vehicle emissions on our streets. But the only way we’re going to fully address global warming on a statewide level is by reducing greenhouse gases produced by our power plants. The Governor’s plan will fight global warming, both by reducing CO2 emissions and by investing in green, renewable energy sources, and I am proud to support his efforts.”

Brooklyn Borough President Marty Markowitz said: “Bravo to Governor Spitzer for striking this blow against global warning and greenhouse gas emissions—and for recognizing that with a little courage, being ‘green’ is much easier than people think. Here in cutting-edge Brooklyn, we’re proud of our solar-powered subway terminal at Stillwell Avenue in Coney Island, our co-gen co-ops in Clinton Hill, our huge new green roof in Red Hook, our food justice efforts in East New York—the kinds of sustainable initiatives that have the rest of the country saying ‘Brooklyn, NYC, and New York State — How green it is!’”

Commissioner of the Department of Environmental Conservation Pete Grannis said: “Global warming is the issue of our time. It’s a problem that demands the attention and the action of every government body, every business and every citizen. With these regulations, we will be attacking it in three ways: first, reducing emissions; second, fostering energy efficiencies and conservation, and third, spurring the development of clean and renewable sources of energy.”

Paul Tonko, President of NYSERDA, said: “NYSERDA is pleased to be a part of the Regional Greenhouse Gas Initiative and partner with the Northeast and Mid-Atlantic States involved. We are steadfast in our commitment to reduce carbon dioxide emissions and combat global warming. New York State has been committed to moving toward a clean energy economy, and addressing the impact of greenhouse gas emissions plays a vital role in that effort, as well as the future of our environment.”

Peter Lehner, Executive Director of the Natural Resources Defense Council, said: “This is a win-win-win policy for New Yorkers and our environment that also sends a signal that will resonate from Washington to Wall Street about the future of energy and emissions performance. It establishes a concrete limit on global warming pollution from power plants while generating a major new investment stream for cleaner, more efficient energy technologies. The sky belongs to all of us. Companies shouldn’t be allowed to use it as a free, private dumping ground. These rules will ensure that polluters pay their fair share for the emissions they put into our atmosphere.”

Laurence DeWitt, Pace Energy Project Senior Analyst, said: “We applaud Governor Spitzer for his willingness to act now to confront one of our state’s and nation’s great economic and environmental threats. Governor Spitzer was the first national figure to support a 100 percent auction of carbon dioxide allowances – a position he took when he was New York’s Attorney General.”

Jason K. Babbie, Environmental Policy Analyst for the NY Public Interest Research Group, the state’s leading consumer and environmental organization said: “Global warming is turning up the heat on the need for bold pollution reduction solutions, and Governor’s Spitzer’s draft regulations provide a way to decrease pollution while making polluters pay. These are the types of solutions that New Yorkers need.”

David Manning, Executive Vice President of National Grid, said: “We understand the urgency of addressing climate change and have established our own goal to reduce our world-wide greenhouse gas emissions 60 percent by 2050. As owner of over 6,500 megawatts of primarily low carbon natural gas powered generation in New York, we have actively supported the RGGI process since its inception and we applaud Governor Spitzer and Commissioner Grannis for continuing to lead the charge to reduce CO2 emissions in the Northeast. We believe the 100 percent auctioning of allowances and use of such proceeds to facilitate energy efficiency programs is an appropriate approach for reducing energy demand. We look forwarding to reviewing the details of the draft regulations and to working with DEC and NYSERDA to make the final NY RGGI rule an example for the nation to follow.”

Carol Murphy, Executive Director of the Alliance for Clean Energy New York, said: “By auctioning 100% of all allowances and using these funds to encourage energy efficiency and investment in clean energy resources, we are taking essential steps forward to making New York green again. Once again, New York is leading the way on an important policy that benefits us all. It is essential that we continue to seek new and innovative ways to encourage use of clean energy in order to protect our environment, cut our dependence on foreign oil and promote economic development in our State.”

Under RGGI, annual emissions of carbon dioxide from New York power plants 25 megawatts and larger would be capped at 64.3 million tons from 2009 through 2014. From 2015 to 2019, emissions would be reduced by 10 percent. This will achieve a 16 percent reduction from projected business-as-usual emissions.

“By design, this plan creates winners and losers. Older, less efficient power plants with higher emission levels will pay more to comply with RGGI than newer, more efficient units,” added Governor Spitzer. “Dirty generators will be at a competitive disadvantage, and there will be a new incentive to build clean, efficient or renewable generation.”

The draft regulations are the culmination of dozens of public meetings, which included energy industry representatives, between 2003 and 2007.

RGGI is part of a regional strategy to combat global warming. Under the draft regulations, power plants will have to procure enough allowances or “offsets” to meet their actual emissions over a three-year period. In order to ensure that the cost of compliance does not increase dramatically, the state would permit generators to use offsets to account for up to 3.3 percent of their overall emissions. Offsets are greenhouse gas emission reduction projects from outside the electricity sector. For example, generators could choose from a number of projects — from planting trees on land where there are none to landfill gas recapture — to removing a corresponding amount of CO2 from the atmosphere. Offset projects provide generators with additional flexibility to meet their compliance obligations.

Other states participating in RGGI include: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New Jersey, Delaware and Maryland. Each state is given allowances to approximately match current emissions; each state has discretion to allocate up to 75 percent of their allowances. Maine and Massachusetts recently published their proposed regulations, which call for an auction of 100 percent of allowances.

The release of the draft regulations kicks off a 60-day public comment period that ends on December 24th. Public hearings will be held on December 10th in Albany, December 11th in Ray Brook in the Adirondacks, December 12th in New York City and December 13th in Avon.

The draft regulations are available at: