Yesterday the nine states that participate in the Regional Greenhouse Gas Initiative (RGGI) released a report that highlights the continuing success of the nation’s longest-running carbon market. The big takeaway: yes, it is possible to tackle our climate and energy challenges while delivering huge benefits to consumers!
How to cut carbon and save money
Nine New England and Mid-Atlantic states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont) currently participate in the RGGI program, which limits power plant carbon emissions. Allowances issued under the emissions cap are auctioned to generate revenues that can be used for a variety of purposes.
The latest RGGI report, which tracks the program’s impact through 2013, is full of good news:
- Together, the RGGI states have cut emissions by 40 percent since 2005, while their economies have grown a robust 8 percent.
- The $1.4 billion in auction proceeds invested to date will return more than $2.9 billion in lifetime energy bill savings to more than 3.7 million participating households and 17,800 businesses.
- Much of the bill savings are driven by investments in energy efficiency, which were also the largest share of the investments. It’s no coincidence that six RGGI states are ranked among ACEEE’s 2014 top ten states for energy efficiency.
- Investments in clean energy and direct bill assistance programs also helped save consumers money.
A simple recipe for success
RGGI’s recipe is simple: put a price on a “bad” (carbon emissions) and use the money for “good” stuff like investing in clean energy, energy efficiency, and other measures that help lower consumer electricity bills.
In fact, RGGI has been so successful at achieving its goals that the program participants made the decision to further tighten the emissions cap. By 2020, emissions from the nine RGGI states are projected to be 50 percent below 2005 levels. If that progress continues through 2030, they will collectively be on track to achieve their Clean Power Plan goals.
Among the great stories of how RGGI funds are being used, here’s one that caught my eye: In New York, a little more than $11 million in RGGI proceeds has helped leverage $125 million in private investment to fund solar energy projects on Long Island. These types of public-private partnerships are exactly what we need to scale up renewable energy rapidly.
Your state can replicate RGGI’s success too
The RGGI states and California have blazed a path in using a market-based approach to cut carbon, grow their clean energy economies, and benefit consumers. Your state can take advantage of this success too, by joining existing programs (or rejoining, as the case may be) or creating new regional programs. This can also help states meet their Clean Power Plan emission reduction targets.