Webinar Will Show Now Is the Time To Strengthen RGGI
This blog post was co-authored with my colleague Bruce Ho.
The nine states in the Regional Greenhouse Gas Initiative (RGGI), which cuts carbon pollution from power plants in the Northeast and Mid-Atlantic regions, have been engaged in a comprehensive and careful program review for more than a year to determine the next phase of their carbon cap-and-invest program. And Thursday they’ll hold a public webinar to discuss updated technical modeling that shows RGGI is in an even stronger position to cut its post-2020 emissions than it was even a year ago.
The program in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont has already been an unmitigated win for the idea that smart climate policy and job growth can go hand-in-hand, surpassing even the states’ and stakeholders’ most optimistic projections. In fact, since RGGI was first implemented in 2009, it has helped to:
- Cut power plant carbon pollution by more than 40 percent;
- Create tens of thousands of jobs and more than $2.9 billion in regional GDP growth;
- Save consumers billions of dollars on their energy bills, with lifetime savings estimated at $4.67 billion so far; and,
- Prevent at least 8,200 asthma attacks, 39,000 lost work days, and 300 premature deaths resulting from power plant pollution.
Given this track record and our need now for well-designed action at the state and regional levels to help the United States meet what should be our national climate objectives, it’s time for the states to recommit to RGGI, by adopting an even more ambitious, post-2020 cap.
In advance of the 1 p.m. webinar on Thursday (registration details available here), the states released their presentation slides, and new modeling of the region’s current emissions trajectory shows that RGGI is in a really strong position to cut carbon further, post-2020. Compared to earlier modeling, the states’ new results show both lower emissions and lower power prices in the region’s “reference” cases (i.e., the current regional trajectory before strengthening RGGI), which suggests that deeper emissions cuts will be both easier and cheaper to deliver than earlier anticipated.
One reason ambitious cuts are even more feasible now is that individual RGGI states—especially New York, Maryland, Massachusetts, and Rhode Island—have begun implementing a number of major clean energy actions over the last year, including strengthening state renewable energy and energy efficiency standards. Just this month, in fact, Maryland enacted legislation to ensure continued strong statewide energy efficiency targets that will save customers money and continue to slash the state’s carbon emissions. By lowering the RGGI states’ emissions, these state policies act as down payments that will make a stronger, post-2020 RGGI program easier to achieve. (Every megawatt hour delivered by zero carbon resources such as renewables and energy efficiency is one fewer megawatt hour of fossil generation that the region needs; lower demand for fossil generation=lower demand for RGGI carbon allowances=lower electricity prices for everybody).
RGGI is also in a stronger position to cut carbon pollution because of economic trends. As our colleague Kevin Steinberger wrote recently, the costs of renewable energy continue to decline, and renewable technologies such as wind and solar are increasingly cost-competitive with fossil fuels, or cheaper, even before you monetize renewable energy’s considerable environmental and health benefits. These falling cost trends show no signs of abating, which means that the costs of cutting carbon in RGGI are likely to be even lower in the future than what the states can project today.
RGGI can succeed in spite of the Trump administration
Equally important, the benefits of a stronger RGGI do not depend on support from a Trump administration that is chocked full of delusional climate deniers hell-bent on pandering to the fossil fuel industry. RGGI was initiated in the mid-2000s as a bipartisan counterweight to the climate denial of George W. Bush’s administration. Since then, the program has charged forward and achieved benefits independently of climate inaction in Washington, D.C.
Let’s make no mistake: Strong federal climate policies are vitally important. But in their absence, states and cities can fill the void. Even if President Trump were to successfully unravel the Environmental Protection Agency’s Clean Power Plan—something that is far from a done deal and which NRDC will fight every step of the way—the RGGI states’ modeling shows that the impact would likely be minimal on RGGI and the economics of climate action in our region. In other words, the Trump administration can’t and won’t stop climate progress in the Northeast and Mid-Atlantic (and beyond).
Over the next few weeks, the RGGI states will conduct additional modeling of specific future emissions reduction trajectories under RGGI that will build on these new reference case results and help the states determine RGGI’s final, post-2020 carbon emissions caps. The states currently propose modeling three cap scenarios, which range from continuing RGGI’s current carbon reduction trajectory to larger cuts, and to present results to stakeholders in the early summer, with a final decision on the cap possible by the end of the summer. The states are requesting stakeholder feedback (due April 27) on these scenarios and other potential RGGI reforms, and NRDC will provide written comments.
One thing that is already clear, though, from both the new modeling the states are presenting this week and earlier analyses, is that the RGGI states can continue to cut emissions and increase economic and jobs growth, consumer bill savings, and public health benefits post-2020. An analysis from Synapse Energy Economics, for instance, shows that the RGGI states could save consumers $25.7 billion on their energy bills and support 58,400 jobs annually by doubling RGGI’s strength and continuing to invest in energy efficiency and renewables, as the states do with the proceeds earned when, under RGGI, power plants buy emissions allowances. Earlier modeling from the RGGI states’ themselves has also shown that tighter carbon caps would have minimal effects on power prices, even before accounting for energy efficiency investments that will lead to further consumer bill savings. We expect the states’ additional, forthcoming modeling to continue to support these conclusions, and it will be critical to ensure that this modeling considers a suite of ambitious post-2020 cap scenarios to avoid leaving potential RGGI benefits on the table. (And, as we’ve stated before, to inform their decision, the states should include in this modeling a 5 percent-per-year cap reduction scenario, which is similar to the actual rate of emissions reductions in the region since RGGI began.)
It’s time to chart RGGI’s future course
The time for the RGGI states to act grows increasingly near. The states’ thorough and careful analysis in the RGGI review to date has been warranted by the importance of RGGI and the need to get things right under both RGGI and other programs so that we can avoid the worst impacts of climate change. But, with all signs supporting a stronger RGGI, it is time for the states to begin moving their review to completion by adopting the strongest possible post-2020 cap levels supported by analysis, and by making complementary reforms that can ensure even more benefits under RGGI in the years ahead. These reforms include adjusting the RGGI cap to account for excess banked allowances, reforming RGGI’s problematic Cost Containment Reserve (CCR), and creating a new Emissions Containment Reserve (ECR).
The schedule outlined by the states shows that they should be able to complete their review and commit to finalizing a strong, post-2020 carbon reduction trajectory by this summer, if not before. By completing this review and committing to a post-2020 RGGI that is even stronger than the program is today, they can reposition themselves as pioneers and prove once again that smart environmental programs and policies offer a host of benefits: creating new jobs, saving consumers money on energy, and protecting our public health, all while safeguarding the climate not just for us, but also for future generations. RGGI is a proven winner, and the time has come for the states to double down and continue to lead on climate.