Huge Climate Opportunity If RGGI Governors Step Up
The governors of nine Northeastern and Mid-Atlantic states are about to make a momentous climate decision: how much power plant pollution they’re going to cut, and how fast they’ll cut it. A decision to go big on carbon cuts could add $3.2 billion more to state coffers and help reduce energy bills for residents—not to mention make the air cleaner and healthier for everyone to breathe.
Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont are all part of the Regional Greenhouse Gas Initiative (RGGI), an immensely successful program that has cut carbon pollution 40 percent since its launch in 2009, outpacing other parts of the country. The upcoming decision by the RGGI governors will determine how much more pollution they’ll cut through 2030. This decision, in light of the Trump administration’s attempts to undermine climate action, could take on global significance.
Under the RGGI program, power plants buy permits, or allowances, at quarterly auctions that allow them to emit a specific amount of carbon pollution. The number of allowances available for sale decreases each year, leading to less pollution. The states invest the bulk of the auction revenues in energy efficiency, renewable energy, energy bill assistance for low-income households, and other programs that benefit consumers.
Along with deep carbon pollution reductions, RGGI’s impressive record of success includes:
- Consumer savings of $618 million on energy bills, with billions more expected, due to energy efficiency measures and renewable energy installations funded by state RGGI programs.
- A boost to regional employment by more than 30,000 job-years (one year of full-time employment for one person).
- Public health benefits valued at $5.7 billion. (Cutting carbon pollution from power plants also cuts other illness-causing power plant pollution.)
- A 3.4 percent reduction in electricity rates while prices in other areas rose.
- State economic growth of 25 percent, outpacing growth in non-RGGI states, including at least $2.9 billion in economic growth attributed to RGGI.
The RGGI states’ decision to auction pollution permits, rather than giving them away for free to the owners of polluting power plants, creates significant benefits for consumers. That’s a big reason why the upcoming decision, expected in the next few weeks, has such huge potential upside for each state. NRDC’s analysis shows the states could earn $3.2 billion more in RGGI’s auctions by selecting the tightest emissions cap under consideration, as compared to the least ambitious option, which would merely maintain easily achieved status quo reductions in carbon pollution of 2.5 percent per year. The tightest cap on the table would increase reductions to 3 percent annually, plus an additional cut of 6.5 percent in 2019, and would cut 99 million more short tons of carbon pollution by 2030, the equivalent of avoiding one-year’s worth of emissions from 19 million cars.
Every RGGI state would benefit under this tightest cap, with funding increases of:
- Connecticut: $15.8 million annually and $204.8 million through 2030.
- Delaware: $11.1 million annually and $144.7 million through 2030.
- Maine: $8.8 million annually and $113.9 million through 2030.
- Maryland: $55.2 million annually and $718.0 million through 2030.
- Massachusetts: $39.3 million annually and $510.4 million through 2030.
- New Hampshire: $12.7 million annually and $165.0 million through 2030.
- New York: $94.7 million annually and $1.23 billion through 2030.
- Rhode Island: $3.9 million annually and $50.9 million through 2030.
- Vermont: $1.8 million annually and $23.5 million through 2030.
That’s real money that can support clean energy programs—if RGGI goes for the strongest cap option on the table. While this option is the most ambitious of the three under consideration by the states, experts say that even bigger cuts are also clearly achievable, and would drive even more benefits. A recent study by Synapse Energy Economics found that cutting carbon pollution by 5 percent per year in the RGGI region—even more than what the states are considering—would help save consumers $25.7 billion on their energy bills and support 58,400 jobs a year.
Modeling from the RGGI states shows that tighter carbon caps would have minimal effects on power prices (less than one-tenth of a penny per kilowatt-hour in 2017 and two-tenths of a penny in 2031), even before accounting for any of RGGI’s benefits, including continued health savings and investments in energy efficiency and renewable energy that will lead to further job growth and consumer energy bill savings.
With the Trump Administration’s dangerous denial of climate change, it’s up to the states to lead. California recently set a new bar for climate action by passing legislation to help ensure it cuts carbon pollution 40 percent by 2030. The question is, will the RGGI states—with a combined economy that surpasses California’s—take the baton from the Golden State and sprint forward? It’s up to the RGGI governors to reach out now and grab this opportunity, or risk leaving the region behind in the slow lane to the clean energy future.