New RGGI Credit Mechanism Wins Broad Support But Details Uncertain
View on Inside EPA/climate website"Hoagland spoke on a Feb. 7 webinar focused on the ECR hosted by Resources for the Future (RFF) and the Collaborative for RGGI Progress -- a coalition of environmental groups and utilities in the region."
"The ECR 'ensures the efforts by any individual entity out of the collective RGGI region' are supported, by making sure 'states don't free ride off other states,' said RFF's Dallas Burtraw. He called the free riding problem the 'waterbed effect' and noted that the ECR -- by withholding allowances when prices are low -- would put pressure on states that are doing less to comply with the program requirements.
Burtraw also suggested that the ECR, instead of being set at one trigger price, could be structured as multiple 'steps,' though some like McGraw cautioned that approach could be too complex.
However, Burtraw suggested a 'tiered' ECR could be advantageous because it would 'lessen the chance that any one price level is the outcome.' With multiple ECR 'steps,' he noted, 'the market is determining the price.'"
