The exterior of the Ocean State Power plant, in Burrillville. The facility, owned by TransCanada Power, is among plants that will be required to purchase emission allowances.

THE PROVIDENCE JOURNAL / STEVE SZYDLOWSKI STEVE SZYDLOWSKI

Rhode Island has joined a group of Northeast states that have agreed to a long-term plan designed to limit and then reduce the amount of carbon dioxide emitted from power plants.

Carbon dioxide is the byproduct of burning fossil fuels, such as coal and natural gas, and rising emissions have been linked to an overall warming of the earth’s atmosphere.

In February, Governor Carcieri announced that the state would join the Regional Greenhouse Gas Initiative, or RGGI. Last month, the General Assembly passed a law that spells out how Rhode Island will participate. It became the 10th state to join.

Environmental advocates have praised the new law, saying it will help slow global warming, provide incentives to build new renewable-energy projects and even lower electricity rates.

“This legislation means less global warming pollution from power plants and that is a good thing for our coastline, our beaches and the Bay,” said Matt Auten, advocate for Environment Rhode Island.

“The General Assembly has proved it is serious about combating global warming, the defining environmental issue of our generation,” said Cynthia Giles, an attorney for the Conservation Law Foundation, one of the groups that have been pushing for Rhode Island’s participation in the initiative. “The bill sets a tough environmental standard, and will save consumers money by reducing overall demand for power.”

Electricity generation is the second-biggest source of carbon dioxide pollution in New England, accounting for about 33 percent of all emissions, according to the Conservation Law Foundation. The largest single source is the transportation sector, which accounts for about 51 percent.

The RGGI agreement aims to slow global warming by requiring power plants to gradually reduce the amount of carbon dioxide they emit. Beginning in 2009, power plant owners will have to buy an “allowance” for each ton of carbon dioxide they release into the air. The allowances are essentially a permit allowing the discharge of a certain amount of CO2.

The Rhode Island law directs the Department of Environmental Management to administer the program. The DEM is charged with writing regulations that will spell out exactly how the state will participate.

Initially, Rhode Island will be given allowances for about 2.7 million tons of CO2, the current amount emitted by power plants in the state. Region-wide, the total allowances will be for 121 million tons of CO2.

The plants will be able to purchase these allowances through an auction process, so how much they will cost is unclear. Giles said that the states estimate the allowances will sell for between $2 and $3 per ton.

Beginning in 2015, the number of allowances will be reduced annually by 2.5 percent, which will reduce emissions by a total of 10 percent by 2018.

As fewer allowances become available to purchase, their cost to power produces is expected to rise. At some point, the allowances will become so expensive that it will be more economical for the power produces to cut down on C02 emissions by investing in new technology, adding renewable-energy sources to their portfolios or switching to cleaner-burning fuels.

The costs of these allowances will be passed on to ratepayers, said Giles, of the Conservation Law Foundation. But she said that those costs will be minimal and would result in rate increases of less than 1 percent. However, if the money that the state receives from selling these allowances is invested in renewable energy and efficiency projects, as Rhode Island’s law calls for, the overall impact will be to lower electricity rates, she said.

Power plants that generate more than 25 megawatts of electricity will be required to purchase the emission allowances. In Rhode Island, that includes: Manchester Street Station in Providence, owned by Dominion Resources; Ocean State Power in Burrillville, owned by TransCanada Power; Pawtucket Power Associates, owned by Sempra Energy Trading; Rhode Island State Energy in Johnston, owned by FPL Energy Operating Services; and Tiverton Power in Tiverton, owned by Calpine.

Other states already signed onto the regional pact include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York and Vermont.

tbarmann@projo.com