How RGGI is Growing Renewable Energy and Reducing GHGs

The Regional Greenhouse Gas Initiative reduces GHG, grows the economy and promotes renewable energyA new report demonstrates that emissions markets can increase renewable energy, decrease greenhouse gases (GHGs) and grow the economy. The Regional Greenhouse Gas Initiative (RGGI) is the first U.S. market-based regulatory program designed to reduce GHGs. RGGI is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce the power sector’s CO2 emissions.

There are roughly 160 power plants covered by RGGI. Under the program, states sell emission allowances through auctions and invest the proceeds in consumer benefits including energy efficiency, renewable energy, and other clean energy technologies. In addition to spurring cleantech innovation and reducing GHGs, RGGI is creating green jobs.

Proposed amendments to RGGI have been incorporated in an Updated Model Rule which was released on February 7, 2013. Although New Jersey Gov Chris Christie pulled out of the program nearly two years ago, the nine remaining states have all agreed to make even deeper cuts to power plant carbon emissions, leading to a 20 percent reduction over the next decade.

According to a report released on March 26th 2013, RGGI has increased renewable energy, lowered GHGs and grown the economy. Between 2000 and 2010, the economies of the ten Northeast states grew twice as fast per capita as other states, while per capita carbon dioxide emissions declined 25 percent faster.

These are the findings of a report released by Environment America titled “A Double Success: Tackling Global Warming While Growing the Economy with an Improved Regional Greenhouse Gas Initiative.” A news release on the report concludes that the Northeast states can make a meaningful contribution to emissions reduction.

“By promoting clean energy and energy efficiency programs, RGGI helps keep energy dollars in our local economy while reducing the risk of climate change-related costs,” said Pat Stanton, senior vice president for policy and advocacy at the Conservation Services Group (CSG), a large energy services company. “In the last five years, RGGI has helped to spur CSG’s growth. We have added over 450 new employees and improved the efficiency, comfort, and affordability of thousands of New England homes.”

A recent analysis also indicates that RGGI has produced a $1.6 billion economic boost to the region through 2011 and that strengthening of the program could produce an additional $8 billion in economic benefits.

“By using RGGI to accelerate investments in energy efficiency, the Northeast states have made RGGI into a winner for businesses and consumers in the Northeast,” stated the Northeast Energy Efficiency Partnerships’ public policy director Jim O’Reilly. “This report shows that RGGI will continue to be a critical tool for states to manage their energy use and maintain our competitive advantage as we emerge from the economic downturn.”

Emissions reductions also provide risk mitigation. Reducing global warming causing emissions helps to preempt extreme weather events like flooding. In the Northeast floods impact 1.5 million people living in coastal flood zones. The report indicates that by mid-century the costs of these floods could reach $212 billion annually in storm-related economic losses.

“In the wake of Winter Storm Nemo, Hurricane Sandy and Hurricane Irene, the Northeast must double-down on its commitment to lead the nation in reducing the pollution that’s warming the planet and changing our climate,” said Rob Sargent, energy program director for Environment America. “There’s no time to waste in tackling the climate challenge and it’s got to start right here and right now. The success that these states are having in limiting pollution, promoting energy efficiency and shifting to renewables should give us the confidence that they can continue to show the nation and the world that it can be done.”

The report urged further action including:

  • New Jersey should rejoin the RGGI program, and lead the way in preventing increasingly severe storms and rising sea levels while bolstering the state’s economy.
  • Northeast states should adopt limits on global warming pollution that go beyond the electricity sector to include transportation and heating fuels.
  • Maryland, New Jersey, Connecticut and Massachusetts must implement their laws with binding targets for reducing global warming pollution.
  • More states should take action to limit emissions, and joining RGGI would be a great step forward.
  • The U.S. Environmental Protection Agency should move forward on limiting global warming pollution from new and existing power plants in all states.

The Northeast emissions market not only helps to stave off climate change it also provides a healthier environment including cleaner air.

“Reducing emissions from power plants has a direct positive impact on the health of our communities, translating into less asthma, less respiratory disease and less allergies,” said Gary Cohen, president of Health Care Without Harm, which works with the health care industry to promote sustainable practices. “Addressing climate change through RGGI and similar policies will help protect our families from climate-related diseases and other health impacts of extreme weather events.”

Although some of the emissions reductions attributed to RGGI are undeniably due to a slower economy, there are still tremendous benefits afforded by the program. The success of the program is attributable to the fact that it is a market based mechanism that reduces GHGs while stimulating a cleaner economy.

“Strengthening programs such as RGGI is a win-win for the Northeast,” said Sargent. “We can reduce the impacts of global warming while powering our clean energy economy.”

The future for the RGGI looks bright and this has important implications for other states that have not yet enacted mandatory emission limits or set a price on carbon. According to the UK based Alternative Marketplace, the combination of rising electricity costs and increasing demand for renewable energy will auger a 40 percent annual increase in the US emissions market.

California offers us a glimpse into the future of GHG initiatives. While RGGI covers the electric power generation sector in the U.S. Northeast, California has a mandatory carbon cap-and-trade system that covers over 80 percent of the state’s economy.

Actions taken by RGGI states are the first steps towards a national energy strategy that will expedite the transition to a cleaner economy.

Richard Matthews is a consultant, eco-entrepreneur, green investor and author of numerous articles on sustainable positioning, eco-economics and enviro-politics. He is the owner of The Green Market Oracle, a leading sustainable business site and one of the Web’s most comprehensive resources on the business of the environment. Find The Green Market on Facebook and follow The Green Market’s twitter feed.

Image credit: lisacchamberlain, courtesy flickr


Richard Matthews
Richard Matthews
Richard Matthews is a consultant, eco-entrepreneur, sustainable investor, and writer. He is the owner of THE GREEN MARKET, one of the Web’s most comprehensive resources on the business of the environment. He is also the author of numerous articles on sustainable positioning, green investing, enviro-politics, and eco-economics.

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