Posted on September 29, 2016 by Seth Jaffe
When RGGI was first implemented, I heard Ian Bowles, then Secretary of Energy and Environmental Affairs in Massachusetts, say more than once that the purpose of RGGI wasn’t really to reduce greenhouse gas emissions or jump start the clean energy economy. Instead, the goal was much more modest; it was simply to demonstrate that a trading regime could work. The RGGI states were to serve as a model, to be the laboratory of a GHG allowance system. The hope was certainly that RGGI would succeed its way into obsolescence. Surely, by 2016, there would be a federal statutory basis for GHG regulation.
It’s now September 2016 and a federal statutory basis for a GHG trading system remains a seemingly distant hope (this post is definitely not about the Clean Power Plan). We may still be waiting, but we do at least have substantial data from the laboratory that is RGGI. In fact, yesterday, RGGI released its analysis of The Investment of RGGI Proceeds through 2014. Some highlights:
- Power sector GHG emissions have decreased by more than 45% since 2005, while regional GDP has increased by about 8%.
- The total value of RGGI investments reached $1.37 billion through 2014.
- Energy efficiency has taken up 58% of RGGI investment. The report states that the expected return is $3.62 billion in lifetime energy bill savings.
- Clean and renewable energy make up 13% of investments, with an expected return of $836 million in lifetime energy bill savings.
One can quibble with these numbers. They don’t really provide a reliable comparison to what would have happened in the absence of RGGI. Nonetheless, it’s pretty clear that RGGI does work. We can reduce GHG emissions without giving up on economic growth, and we can use the regulatory process to move our energy economy where it needs to be.
Now, if someone could just figure out a way to make RGGI obsolete, that would be true success.