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National Grid USA endorses economywide price on carbon for northeastern states

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National Grid USA endorses economywide price on carbon for northeastern states

In a new white paper examining what states need to do to achieve their ambitious emissions reductions targets National Grid USA said it is in favor of putting an economywide price on carbon dioxide emissions across northeastern states.

"Carbon pricing should apply not just to electricity (as it currently does) but to all fuels," National Grid USA said in the white paper released June 15. The paper offers a blueprint on how to deeply cut greenhouse gas emissions in the New England states and New York, all of which participate in the Regional Greenhouse Gas Initiative, a power-sector specific cap-and-trade emissions program.

Raising the price of higher-carbon emitting fuels will encourage customers to pick cleaner transportation and heating systems, National Grid said. And "gathering carbon revenue from all sectors ... will provide a more robust and balanced revenue source for supporting the necessary changes." The white paper also suggested a significant portion of the revenue from carbon pricing should be used to mitigate price hikes for "vulnerable populations."

National Grid noted that the seven northeastern states have all adopted targets of curbing carbon emissions from 1990 levels by 80% by 2050, which is in line with the goals of the Paris Agreement on climate change to limit global warming to 2 degrees C from preindustrial levels. President Donald Trump has pledged to pull the U.S. from the Paris accord, but a number of states, businesses and local governments have stepped up their decarbonization efforts in hopes of keeping the nation on track regardless.

The white paper also comes as a number of northeastern and mid-Atlantic states are eyeing options for curbing transportation emissions, which are now higher than those produced by the power sector. Some states, including Massachusetts, are also considering expanding carbon pricing to include transportation emissions, which could not only help them reach their emissions targets but also help refill their cash-strapped transportation infrastructure spending coffers.

As of 2015, carbon emissions from electric generation in the northeastern states plus Maryland and Delaware were down by about 50% from 1990 levels thanks in part to their participation in RGGI, the paper said. But overall economy-wide emissions are down only 16%, leaving the states a long way to go to reach their 2050 target. National Grid estimated the Northeastern states will need to curb overall emissions at a rate triple of what occurred from 1990 to 2015 to reach their longer-term targets.

National Grid, which is largely in the business of delivering electricity and natural gas to customers in New York, Rhode Island and Massachusetts, said it is well positioned "and committed" to help facilitate the transition to a low-carbon economy. The utility said in a news release it will be "engaging with various stakeholders in the coming months and years" to help reach the 80% by 2050 goal.

The path to reaching that goal begins with the electric generation sector "but by necessity moves beyond this and requires modifications to individual behavior and choices in transportation and how we heat our homes and businesses," National Grid said.

Much of the paper focuses on the steps states need to take to achieve an informal interim target of 40% emissions reductions by 2030, a level that experts have said would keep the states on track toward their bigger target. Three big shifts would have to happen in the electric, transportation and home heating sectors by 2030, the report said.

The amount of zero-carbon emitting generation, such as renewables and nuclear, would need to increase to 67% from current levels of about 50% of total generation in the region. And people, businesses and cities would need to ramp up their adoption of electric vehicles and install related charging infrastructure, the paper said. By 2030, about half of all light-duty vehicles in the region, or about 10 million cars, would need to run on electricity. To get there, the paper said electric vehicle sales would need to climb quickly and, by 2028, account for all new light-duty vehicle sales.

National Grid USA's white paper largely aligns with the perspective of its UK-based parent company National Grid PLC, which also aims to curb its greenhouse gas emissions by 80% by 2050.