Massachusetts sets state GHG emissions limit for 2020 at 25% below 1990 levels, releases plan with additional measures, including Pay As You Drive auto insurance
30 December 2010
Massachusetts Energy and Environmental Affairs (EEA) Secretary Ian Bowles has set the statewide greenhouse gas (GHG) emissions limit for 2020 required by the Global Warming Solutions Act of 2008 at 25% below 1990 levels, the maximum authorized by the Act, saying that measures already in place will get Massachusetts much of the way toward that goal.
A targeted portfolio of additional policies, chosen because they promise overall cost savings, will allow the state to reach the most ambitious target for GHG reduction of any state in the country, Secretary Bowles said. Included among these is a pilot program for Pay As You Drive auto insurance, intended to incent reduction in vehicle miles travelled (VMT).
The Global Warming Solutions Act (GWSA), signed by Governor Deval Patrick in August 2008, mandates the reduction of greenhouse gas (GHG) emissions 80% below 1990 levels by 2050, and requires the Secretary of Energy and Environmental Affairs to set a legally enforceable GHG emissions limit for 2020 of between 10% and 25% below 1990 levels by 1 January 2011, and to issue a plan for achieving those reductions while growing the clean energy economy.
Secretary Bowles set the limit today at the statutory maximum of 25 percent and released the Clean Energy and Climate Plan for 2020, which contains a portfolio of policies designed to meet the limit.
In his formal determination of the 2020 emissions limit, Secretary Bowles noted that “established state policies to promote energy conservation and cleaner energy sources are expected to produce GHG reductions of 18% below 1990 levels by 2020,” and that the remaining question before him in making the determination was “where in the remaining statutory range of 18 to 25% reduction it is practical and appropriate to set the 2020 limit. Central to that question is what additional actions of policy, regulation, and legislation could be pursued that would achieve additional emissions reduction by 2020 and beyond.”
Though he considered “a wide range of measures,” Secretary Bowles included in the implementation plan for 2020 “only those additional measures that provide significant energy cost savings and create clean energy jobs,” but those he found sufficient to support the maximum emissions reduction requirement of 25 percent.
The 136-page Clean Energy and Climate Plan for 2020 contains a portfolio of established and new measures that reduce energy waste, save money, and stimulate the adoption of clean energy technologies, thereby creating jobs at the same time that they reduce GHG emissions.
Transportation. The state is targeting a 7.6% reduction below 1990 levels for the transportation sector. Existing policies contributing to this include:
- Federal and California light duty vehicle standards (2.6% reduction);
- Federal emissions and fuel efficiency standards for medium- and heavy-duty vehicles (0.3% reduction);
- Federal renewable fuel standard and regional low carbon fuel standard (1.6% reduction);
- Sustainable development principles (0.1%)
New policies outlined in the report include:
Clean Car Consumer Incentives. Incentives for consumers to shift their vehicle purchases to more fuel-efficient (or lower GHG) models. This includes varying the rates on new car sales taxes, annual auto excise (property) taxes, and registration fees, with rates raised on low-MPG vehicles and reduced on high-MPG ones. The change could be designed to be revenue-neutral to consumers as a whole and to the state. EEA and MassDOT will conduct a study to examine critical implementation challenges and possible regulatory or legislative paths for this policy. (0.5% reduction)
Pay As You Drive (PAYD) Auto Insurance Pilot. PAYD would convert a large fixed annual premium into a variable cost based on miles traveled, creating a major incentive to reduce discretionary driving, while cutting the overall cost of insurance due to fewer accidents. Miles driven would fall substantially, according to state estimates, along with CO2 emissions and costs for gasoline, accidents, and congestion. The Commonwealth plans to conduct a PAYD pilot program initially, and, depending on results, work with the insurance industry to make this payment method more widely available. (1.1% reduction)
GreenDOT. GreenDOT is MassDOT’s sustainability initiative, announced through a Policy Directive by the Secretary of Transportation in June 2010. GreenDOT is focused on three related goals: reducing GHG emissions; promoting the healthy transportation modes of walking, bicycling, and public transit; and supporting smart growth development. (1.2% reduction)
Smart Growth Policy Package (Expanded Policy) Additional smart growth would make it easier for households and businesses to decrease the number and distance of vehicle trips, reducing VMT and related emissions. Massachusetts already has several policies promoting smart growth, but new, complementary policies are necessary to achieve the smart growth targets. Such policies would focus on influencing infrastructure investments by state agencies and planning decisions made by local governments. (0.4% reduction)
Outside of the transport sector, existing policies include the Green Communities Act requirement of capturing all cost-effective energy efficiency, projected to yield $6 billion in customer savings from $2 billion of investment over three years. Continuation of these energy efficiency efforts, plus additional building-related measures such as deep-energy improvements in buildings; advanced, flexible building energy codes; and a new energy rating and labeling system that will be the equivalent of miles-per-gallon auto fuel efficiency ratings for buildings, beginning as a pilot program in western Massachusetts will reduce GHG emissions statewide nearly 10% by 2020.
In electricity supply, established programs like the Regional Greenhouse Gas Initiative and the Renewable Portfolio Standard will be supplemented by efforts to obtain additional clean energy imports such as Canadian hydropower and a proposed Clean Energy Performance Standard, which would require electricity suppliers to favor lower- and no-emissions sources in the mix of electricity delivered to their customers, will reduce emissions 7.7% by 2020.
In non-energy related sources of emissions, new and expanded programs will address leaking refrigerants that are more powerful greenhouse gases than carbon dioxide, for additional reductions of 2%.
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