Today’s guest blog is written by N. Jonathan Peress and was originally featured online at the Conservation Law Center. Jonathan is the Vice President and Director for Clean Energy and Climate Change for CLF, and he was previously a partner at Downs Rachlin Martin’s Environmental Practice Group in New Hampshire. He practices environmental and regulatory law and has worked extensively on matters involving electricity generation and utility regulation throughout the Northeast.
If you read the headlines or listen to the word on street, you’ve heard that our times are hard times. Joblessness remains stubbornly high, markets remain volatile and credit is tight. Most people agree that what we need are programs that create jobs, generate money, and reinvest each of these in our communities to make them stable, healthier and happier.
Well according to a study by The Analysis Group, that’s exactly what the Regional Greenhouse Gas Initiative (RGGI)—the country’s first market-based program to reduce power plant carbon emissions—has done. As the first regional program in the country, RGGI is being closely watched by many: How much money will be generated, if any? Who does that money benefit? And are customers bearing the brunt of this program in already hard times? The Analysis group provides the answers to these questions in full. But in case you want them in short: $1.6 billion, customers and definitely not. In its first three years, the group has reduced greenhouse gas emissions, created jobs and fostered increased economic activity, proving that addressing climate change is boosting the region’s economy. Simply put, their efforts to increase efficiency and reduce fuel use have benefited consumers, manufacturers and employers.
Outpacing now stalled negotiations on a national greenhouse gas trading program, ten Northeastern and Mid-Atlantic states formed RGGI in 2009, setting a national precedent. The importance of the program is a combined function of its timing and its location: in addition to gaining first mover position, RGGI states are both populous and productive, accounting for one-sixth of the US population and one-fifth of the nation’s gross domestic product. This regional economy now reflects a price on CO2 emissions, and after three years, the results of RGGI are in.
First, the program is economically and environmentally effective. As power plant owners have spent roughly $912 million on CO2 allowances, emissions have gone down—a consequence of both RGGI and larger economic trends. Furthermore, given the way RGGI interacts with local economies—through energy efficiency measures, assistance to low income customers to help pay their electric bills, education and job training programs and more—these dollars have multiplier effects. Once amplified by local and regional programs, RGGI’s $912 million in allowance expenditures “produced $1.6 billion in net present value (NPV) economic value added to the ten-state region.”
This money has created jobs and, in turn, kept money local. By generating a market and a need for labor, RGGI created approximately 16,000 new job-years, or about 20% of the 73,000 civilian jobs lost from September 2010 to September 2011. Moreover, RGGI reduced the 10 states’ payments to out-of-region providers of fossil fuels “by just over $765 million.” New England in particular benefited greatly from the program, creating 7,200 new job-years and reducing its payments to out-of-region fossil fuel providers by $210 million.
Consumers have also benefited. As a result of RGGI programs focused on reducing the use of oil and natural gas heat in homes, energy consumers have saved nearly $174 million. Once again, New England stands out, this time as the only region in which “savings to electricity consumers outweigh the reduction in revenues by power generators.” This is due, in part, to a “much-higher level of investment in energy efficiency with RGGI allowance proceeds than the other regions.”
At a time when jobs are scarce and the cost of heating a home is an ever increasing burden, this is undoubtedly a good thing. Our country faces tough times, and the people are calling for programs that create jobs, save money and protect our environment. RGGI does all three.