by Andrew Grandahl
Many detractors of climate policies often claim that regulating greenhouse gas emissions and transitioning to renewables will harm the economy. Though these arguments are based on anecdotal evidence at best, they have stubbornly stuck around in opposition to a greener grid for decades. Thankfully, we now have crystal clear evidence on a large scale that these claims are verifiably false. And if you live in a state in the Northeast U.S., the proof is right in your backyard.
Established in 2009, the Regional Greenhouse Gas Initiative, or RGGI, (pronounced “Reggie”) is a cap-and-trade system that requires electric generators to reduce carbon emissions while incentivizing utility companies to incorporate more renewables. The market operates by placing a price on the ability to emit a metric ton of carbon. These emission allowances must be purchased by companies in order for them to release any carbon into the air. Over time, the emission permits available per year decline, meaning the utilities must reduce their carbon emissions by using renewable sources or investing in energy efficiency programs, or else suffer financial consequences.
So far, the initiative has been a resounding success. Under RGGI, emission targets drop by 2.5% per year, meaning that RGGI will result in a 40% reduction in electric sector emissions by 2020 as compared to 2009 levels. On August 23rd, governors from the nine participating states - the six New England states plus New York, Maryland and Delaware - moved to set even more ambitious goals to reduce emissions an additional 30% beyond 2020 levels by 2030. This further fortifies the Initiative, and brings the Northeast into step with meeting Paris Climate Agreement goals. In the wake of climate policy inaction in Washington D.C., this is the latest example of state leaders stepping up to take passing meaningful climate policy into their own hands.
Outside of the obvious benefits of reducing carbon emissions to help stabilize our climate, RGGI has also contributed substantial economic benefits to participating states. Collectively, the GDP of the nine states implementing RGGI has risen since 2009, while electric sector emissions continue to fall significantly. In addition, electricity prices in those states have fallen an average of 3.4% according to the Acadia Center. By stark contrast, non-RGGI states have seen electricity prices go up by 7.2%. The evidence is clear: reducing emissions from the electric sector simply is not at odds with healthy economic growth. Further, according to Abt Associates, the overall improvement in region-wide air quality has helped avoid an estimated 5.7 billion dollars in health care costs.
From our climate to our wallets and even our personal health, RGGI has had positive impacts on citizens of the Northeast. Our hats go off to the governors who are deepening their commitment to a more sustainable planet, and for standing up to those who won’t.