New study finds RGGI reduces emissions and benefits economy
A new study by the Analysis Group, a global consulting firm, estimates that the Regional Greenhouse Gas Initiative (RGGI) not only reduced emissions but also generated USD 1.4 billion in net economic value for the RGGI participating states in 2015-2017 alone. In its nine years of operation, the program has generated USD 4 billion in net economic activity and has contributed to emissions reductions of over 50% in the power sector.
RGGI was initially set up in 2009 to reduce greenhouse gas (GHG) emissions within a ten-state coalition. Its current members include Maryland, New York, Delaware, Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont; though both Virginia and New Jersey have recently expressed interest in joining (or rather re-entering in the case of New Jersey) the cap-and-trade program. Focused on the power sector, RGGI distributes almost all of its allowances via quarterly auctions. The proceeds of RGGI emission allowance auctions have totaled USD 2.9 billion. Investments of these auction proceeds primarily into local energy efficiency and renewable energy projects stimulated additional economic activity in RGGI states.
The study estimates the program led to overall job increases and the investments in energy efficiency and renewable energy have also offset any potential increase in electricity prices as a result of the carbon price. Furthermore, the participating RGGI states also reduced their spending on fossil fuel energy imports by USD one billion over the past three years.