Electricity may still be expensive in Massachusetts, but the Regional Greenhouse Gas Initiative has had a positive effect on the environment and electricity, according to a report by Analysis Group.
A regional cap-and-trade program has added $1.3 billion in economic activity to nine New England and Mid-Atlantic states since 2011, while decreasing their carbon emissions by 15 percent, according to independent analysis released Tuesday.
Aside from getting solar panels on my roof, I’m no expert on energy policy. Some of us, Stomv & JohnT, for example, know more. Here’s ThinkProgress:
In addition to stimulating the economy and reducing carbon, the Regional Greenhouse Gas Initiative (RGGI) has also reduced the cost of electricity for consumers, saving residential, businesses, and public users $460 million, the report from the Analysis Group found.
These benefits mean that RGGI (pronounced “reggie”) could be a model for other states looking to reduce carbon emissions under the Environmental Protection Agency’s Clean Power Plan, set 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.
“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 ThinkProgress.
Under the RGGI plan, nine states — 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 initially participated, but withdrew in 2011 under Republican Governor Chris Christie).
Cap-and-trade works. And even though it’s a market-based solution, the Republican Party largely opposes it. Governor Candidate Mitt “Dead Zepplin” Romney had taken us out of RGGI, though thankfully Governor Patrick put us back in. Governor Candidate Chris “I Have a Bridge I Can Sell You” Christie took New Jersey out of the initiative.
Health care, marriage equality, and now clean energy. Massachusetts leads.
The revenue from RGGI carbon allowance auctions goes to the states. Each state gets to spend its money however it likes (legislative perogative!).
New Jersey spent much of it on general budgetary gaps. NY did a bit of that as well. NH likes to spend lots of it on refunds to customers. The remaining states tend to spend it on energy efficiency, with some renewable generation subsidies, some low income subsidies, and the like.
Bottom line: by spending the money on EE (paying for those drill noises Bob hears), New England has been able to push its electricity consumption downward. Because we have a market-based system in New England, a reduction in demand corresponds with a lower clearing price — and that means savings for everyone.
Yes, our electricity prices are high as compared to other parts of the country. They’d be even higher were it not for the EE made possible by proceeds from RGGI.