Subnational Carbon Pricing in North America
Subnational Carbon Pricing in North America Current state of play John Larsen Director [email protected]
Center for Strategic and International Studies | May 1, 2018 10 East 40th Street, Suite 3601, New York, NY 10016 | Fax: +1.212.532.1162 | Web: www.rhgroup.net Center for Strategic and International Studies | Subnational Carbon North America Tel:| +1.212.532.1158 1 Address: 5 Columbus Circle, New York, NYPricing 10019 in | Tel: +1.212.532.1157 Fax: +1.212.532.1162 | Web: www.rhg.com
Current subnational carbon pricing programs British Columbia & Alberta: Economy-wide Carbon Tax
California: Economy-wide Cap-and-Trade
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
Ontario & Quebec: Economy-wide
Regional Greenhouse Gas Initiative (RGGI): Electric Sector Cap-&Trade
2
Recent action British Columbia & Alberta: Economy-wide Carbon Tax
California: Economy-wide Cap-and-Trade
Ontario & Quebec: Economy-wide
Regional Greenhouse Gas Initiative (RGGI): Electric Sector Cap-&Trade
Joining RGGI Carbon Tax Legislation Considered Cap-&-Trade Legislation Considered
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
3
US emissions subject to a carbon price 400
COVERED EMISSIONS, 2015 (MMTCO2E)
% OF TOTAL EMISSIONS, 2015 100%
344 90%
350
25%
80% 300 70% 250
60%
200
85%
83%
15%
17%
Current RGGI
RGGI expanded
50% 40%
150
117
75%
30% 100
70 20%
50
10%
0
California
Current RGGI
RGGI expanded
0%
California
Not Covered
Covered
Source: Rhodium Group US Climate Service
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
4
US quarterly carbon prices, 2009-2018 $2018 / metric ton $25
CA [QC+ON]
$20
$15
$10
$5
RGGI
$2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Source: RGGI Inc., California Carbon Dashboard, Rhodium Group analysis.
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
5
RGGI emissions may continue to hover below the cap Million short tons < HISTORICAL
200
PROJECTED >
180 160 140 120 100 80
Effective Cap 60 40
Emissions
20
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
0
Source: Rhodium Group US Climate Service. Note: Emissions and cap through 2011 include New Jersey.
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
6
RGGI prices may hinge on expansion caps and bank adjustments Cumulative million short tons CO2, 2020-2030 WITHOUT NJ + VA
WITH NJ + VA
1,200
1,200
1,160
Loose Cap 1,079
1,000
1,148
1,000
939
Tight Cap 800
800
629
Loose Cap 623
570
600
552
600
Tight Cap 400
400
200
200
-
High Emissions
Low Emissions
High Emissions
Low Emissions
Source: Rhodium Group US Climate Service
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
7
In RGGI electric power is a smaller and smaller contributor Expanded RGGI GHG emissions, million metric tons CO2e 300
Transportation 250
200
Buildings
150
Electric Power 100
Everything Else
50
Industry
0 2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Rhodium Group US Climate Service
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
8
California sees cap-and-trade as central to decarbonization Million metric tons CO2e
Source: California ARB
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
9
Subnational Carbon Pricing in North America Current state of play John Larsen Director [email protected]
Center for Strategic and International Studies | May 1, 2018 10 East 40th Street, Suite 3601, New York, NY 10016 | Fax: +1.212.532.1162 | Web: www.rhgroup.net Center for Strategic and International Studies | Subnational Carbon North America Tel:| +1.212.532.1158 10 Address: 5 Columbus Circle, New York, NYPricing 10019 in | Tel: +1.212.532.1157 Fax: +1.212.532.1162 | Web: www.rhg.com
Center for Strategic and International Studies | May 1, 2018 10 East 40th Street, Suite 3601, New York, NY 10016 | Fax: +1.212.532.1162 | Web: www.rhgroup.net Center for Strategic and International Studies | Subnational Carbon North America Tel:| +1.212.532.1158 1 Address: 5 Columbus Circle, New York, NYPricing 10019 in | Tel: +1.212.532.1157 Fax: +1.212.532.1162 | Web: www.rhg.com
Current subnational carbon pricing programs British Columbia & Alberta: Economy-wide Carbon Tax
California: Economy-wide Cap-and-Trade
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
Ontario & Quebec: Economy-wide
Regional Greenhouse Gas Initiative (RGGI): Electric Sector Cap-&Trade
2
Recent action British Columbia & Alberta: Economy-wide Carbon Tax
California: Economy-wide Cap-and-Trade
Ontario & Quebec: Economy-wide
Regional Greenhouse Gas Initiative (RGGI): Electric Sector Cap-&Trade
Joining RGGI Carbon Tax Legislation Considered Cap-&-Trade Legislation Considered
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
3
US emissions subject to a carbon price 400
COVERED EMISSIONS, 2015 (MMTCO2E)
% OF TOTAL EMISSIONS, 2015 100%
344 90%
350
25%
80% 300 70% 250
60%
200
85%
83%
15%
17%
Current RGGI
RGGI expanded
50% 40%
150
117
75%
30% 100
70 20%
50
10%
0
California
Current RGGI
RGGI expanded
0%
California
Not Covered
Covered
Source: Rhodium Group US Climate Service
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
4
US quarterly carbon prices, 2009-2018 $2018 / metric ton $25
CA [QC+ON]
$20
$15
$10
$5
RGGI
$2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Source: RGGI Inc., California Carbon Dashboard, Rhodium Group analysis.
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
5
RGGI emissions may continue to hover below the cap Million short tons < HISTORICAL
200
PROJECTED >
180 160 140 120 100 80
Effective Cap 60 40
Emissions
20
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
0
Source: Rhodium Group US Climate Service. Note: Emissions and cap through 2011 include New Jersey.
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
6
RGGI prices may hinge on expansion caps and bank adjustments Cumulative million short tons CO2, 2020-2030 WITHOUT NJ + VA
WITH NJ + VA
1,200
1,200
1,160
Loose Cap 1,079
1,000
1,148
1,000
939
Tight Cap 800
800
629
Loose Cap 623
570
600
552
600
Tight Cap 400
400
200
200
-
High Emissions
Low Emissions
High Emissions
Low Emissions
Source: Rhodium Group US Climate Service
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
7
In RGGI electric power is a smaller and smaller contributor Expanded RGGI GHG emissions, million metric tons CO2e 300
Transportation 250
200
Buildings
150
Electric Power 100
Everything Else
50
Industry
0 2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Rhodium Group US Climate Service
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
8
California sees cap-and-trade as central to decarbonization Million metric tons CO2e
Source: California ARB
Center for Strategic and International Studies | Subnational Carbon Pricing in North America
9
Subnational Carbon Pricing in North America Current state of play John Larsen Director [email protected]
Center for Strategic and International Studies | May 1, 2018 10 East 40th Street, Suite 3601, New York, NY 10016 | Fax: +1.212.532.1162 | Web: www.rhgroup.net Center for Strategic and International Studies | Subnational Carbon North America Tel:| +1.212.532.1158 10 Address: 5 Columbus Circle, New York, NYPricing 10019 in | Tel: +1.212.532.1157 Fax: +1.212.532.1162 | Web: www.rhg.com
