Cap & Trade Program Has Saved New Englanders $460 Million
A report from the Analysis Group claims the cap & trade program called the Regional Greenhouse Gas Initiative (RGGI) involving 9 New England and Mid-Atlantic states has added $1.3 billion in economic activity to the region since 2011, while lowering carbon emissions by 15%. It also says people in those states have paid $460 million less for electricity during that time thanks to the cap & trade program.
“The nine New England states’ experience with RGGI can provide other states with valuable lessons for how one might comply with the CO2 regulations included in the Clean Power Plan,” Andrea Okie, a report author, told Think Progress.
RGGI could be a model for other states looking to reduce carbon emissions under the Environmental Protection Agency’s Clean Power Plan, which is scheduled to be released next month. The Clean Power Plan requires states to lower carbon emissions from the electricity sector, but lets states choose how they reduce those emissions.
Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont have reduced the amount of carbon allowed from electricity producers by requiring them to buy a credit for every metric ton of carbon they emit. There are only a limited number of permits, which are put up at auction every quarter. The states use the proceeds from the auctions to invest in further carbon reduction programs, such as efficiency retrofits and renewable energy development.
New Jersey was originally a participant in the RGGI plan, but withdrew after Tea Party darling Chris Christie became governor. Christie and his ilk prefer to “let the free market” find the most efficient economic solution to climate change. He and his cronies will no doubt be waving goodbye to the rest of us as the waves close over Bayonne some time in the future. Perhaps he will take up residence in one of Elon Musk’s space colonies on Mars after the Earth is no longer fit for human habitation.
Much of RGGI’s success has been the reinvestment of money from the carbon permit auction. So far, the states have spent 59% of the funds on energy efficiency; 15% on renewable energy projects; 13% on bill-payment assistance to energy consumers; 12% on other greenhouse gas programs and program administration; and 1% on clean technology research and development.
While opponents of the Clean Power Plan say that it will raise electricity prices for consumers and depress the economy, putting a price on carbon has actually had the opposite effect, according to the Analysis Group report.
Another report released this week by Ceres shows that US states have reduced their carbon emissions an average of 15% since 2008. By comparison, the 9 states participating in RGGI reduced their emissions by 40% during the same period.
Jackson Morris, director of the eastern energy program for the Natural Resources Defense Council (NRDC), agreed that efficiency measures have been critical for lowering emissions across the industry. In the 1950s, the amount of electricity we used increased alongside our economic growth, he said. Now, there are so many ways to become more efficient, projections for our future electricity needs are flat in some places. In other words, we are getting more efficient as quickly as we are needing more power.
There are other downward pressures on emissions from the electricity sector. Notably, renewable energy is a greater portion of generation than ever before. In addition, we’re seeing many of the older, high-carbon-emitting power plants go offline.
“A generation of power plants built in the fifties are finally dying,” Morris says. “A lot of those were not only burning coal, they were burning less efficiently — imagine a car that’s not only burning leaded gas, but getting three miles to the gallon.”
Image via RGGI