Regional Greenhouse Gas Initiative

Our planet is suffering from climate change due to human activity and greenhouse gas emissions, especially carbon dioxide (CO2).  According to the Environmental Protection Agency (EPA, 2013b), “Earth’s average temperature has risen by 1.4°F over the past century, and is projected to rise another 2 to 11.5°F over the next hundred years” (para. 1). This may not seem like much, but on a global scale the warming of Earth’s surface to this extent can change aspects of climate tremendously. Increasing global average temperatures will have drastic negative impacts on agriculture, water supplies, communities, and human health. Perhaps, focusing on one geographic area makes it easier to define the problem and how significant this issue actually is. The Northeast is susceptible to the impacts of climate change especially in coastal regions and due to the adverse weather patterns in the area. The Environmental Protection Agency (2013a) states that “As temperatures rise, farms and fisheries will likely face…problems with productivity, potentially damaging livelihoods and the regional economy” (para. 9).   More frequent heavy rains cause a rise in sea levels which will increase flooding in the Northeast (Environmental Protection Agency, 2013a, para. 4).  In spite of trying to minimize these effects, policy change is necessary in order to reduce the amount of harmful greenhouse gas emissions that fuel climate change.

Fossil fuel consumption is a pressing issue, both as a limited resource and a pollutant of the atmosphere with greenhouse gases that negatively impact human existence.  Scientific studies show that increasing carbon dioxide levels are linked to global rising temperatures and climate change. In fact, the EPA (2014) explains that “atmospheric CO2 concentrations have increased by almost 40% since pre-industrial times” (para. 9). Carbon dioxide acts as a heat-trapping gas, so the more excessive we are in emitting it, the warmer planet Earth will get. The EPA (2014) claims “human activities currently release over 30 billion tons of CO2 into the atmosphere every year” (para. 11). Currently, there is too much carbon dioxide in the atmosphere for it to be naturally absorbed by the carbon cycle. This is why we are facing climate change head on and clearly some sort of political action is necessary.  A program like the Regional Greenhouse Gas Initiative is taking measures to reduce CO2 levels in the atmosphere.

In an attempt to reduce climate change, states in New England adopted policy that regulates emissions of pollution created by fossil fuels to make a substantial difference. The best way to reduce greenhouse gas emissions that are harmful to the environment is to advocate expansion for other states to join the Regional Greenhouse Gas Initiative (RGGI). The Regional Greenhouse Gas Initiative is the first market-based regulatory program in the United States to reduce greenhouse gas emissions (RGGI Inc, 2013a).  This program, in the simplest terms, is a cap-and-trade policy that charges power generation plants for the amount of pollution they create in terms of carbon dioxide emissions. The program specifically targets energy producers of 25 megawatts or greater. A cap is set on CO2 emissions and is reduced by 2.5% each year. These funds gained by RGGI are then invested in programs that will reduce the need for electricity in the future, such as energy efficiency and renewable energy.  Individuals must take action to spread the success of RGGI because it efficiently reduces harmful emissions; eventually creating a cleaner, healthier environment while also promoting innovation in the green energy industry.  The cost of doing nothing and arguing over who receives the most benefit from this program is greater than the cost of implementing this policy on a broader scale as it has proven success.

As the program was in its infancy, administrators of RGGI focused on reducing greenhouse gas emissions.  Administrators describe this program as “RGGI is a cooperative effort among the nine states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector.” (RGGI Inc, 2013a). Fossil fuel usage is one of the main contributing factors that increase the rate of climate change. RGGI is a cap-and-trade program that “went into effect on January 1, 2009 and [it] has been delivering economic and environmental benefits for participating states” (Bryk, 2014, para. 6).   The RGGI program auctions permits for a set price ($5.02 in 2014) per 1 Ton of carbon dioxide emissions to power generation plants.  Bryk (2014) further explains the policy works “by requiring polluting power plants of a certain size (25 megawatts) to purchase pollution permits for the amount of carbon pollution they dump into our already overloaded atmosphere” (para. 6). The money generated through the sale of these permits is reallocated to investments in energy efficiency and the renewable energy sector. RGGI works well in reducing greenhouse gas emissions because it sets a cap on carbon emissions that is established at the beginning of every year. When a power company releases more pollution than the permits they own, more permits need to be purchased either by another permit holder or at the next auction ran by RGGI.  This check and balance system monitors polluters within the power sector, thus achieving the goal of lowering harmful emissions.

Many companies in the power sector are skeptical of the positive impacts of RGGI.  The opponents state “the RGGI plan (during the first three years of operation) imposed roughly $1.6 billion in losses on power plant owners” (Institute for Energy Research, 2011, p. 2).  These losses occur within the purchasing of RGGI credits; these added expenses tend to extend to the customer.  The Institute for Energy Research (2011) further states the flaws within the RGGI program by asserting, “consumers are actually poorer… bills being 0.7 percent higher” (p. 6).  Consumers saw an increase in energy bills by a small margin during the beginning phases of the program which is speculated to drop over time as more energy efficiency and alternative energy infrastructures are added within those states.  In light of the criticism within the corporate power sector, various data has found contrary results.  As the constituency for RGGI programs shed light on their research, Bryk (2014) claims that “not only is carbon pollution in the region down by close to 30 percent with Regional Greenhouse Gas Initiative’s help, but the area has experienced reduced electric rates,…economic growth, [and] consumer savings on energy bills” (para. 7). Throughout the RGGI cap and trade system, many states saved costs on energy bills while investing in future energy savings. Since 2009, “states participating in RGGI have enjoyed an average 8 percent drop in electric rates and energy-efficiency measures that will save consumers more than $1.8 billion in energy costs” (Bryk, 2014, para. 7). Over time this policy results in decreasing electricity costs because the money that is made from purchasing pollution credits is re-invested in energy efficiency. Consumers end up saving money in the long run because of how cost-effective this policy can be if it is allowed to run its course.

New Jersey was one of the ten states that participated in RGGI until 2011 when Governor Chris Christie’s administration decided to pull out of the program.  The Christie administration agreed that climate change was man-made yet “Christie said the initiative was ineffective and amounted to a tax” (Augenstein, 2014, para 9).  The actions of Christie were highly debated and the New Jersey appeals courts ruled that Christie had broken the law by withdrawing from RGGI.  Many politicians and voters feel that Christie’s decision was politically motivated and not within the best interest of New Jersey or the environment. The state legislature and Christie are at odds over RGGI; New Jersey courts have tried to pass three bills to rejoin the initiative and all were vetoed by the Governor.  Augenstein states “the state has lost $114 million in auction proceeds since Christie pulled out of RGGI in 2011” (2014, para 3).  The loss in proceeds from RGGI auctions also are losses in future efficiency and renewable energy independence in New Jersey.  The RGGI program has projections of success and proceeds within all states in the future as far as 2020.  Augenstein asserts that in New Jersey, “those losses increase to $500 million over the next six years” (2014, para 3).  The courts and Christie remain deadlocked over this issue but a resolution should happen soon because every year that passes results in lost revenue for the state.

            With the shared success of states participating in the Regional Greenhouse Gas Initiative, it is imperative that other states adopt this program.  At the very least, states outside the northeast should adopt similar criteria to that of RGGI, using the program as a base model to develop their own green energy policies that effectively reduce states’ carbon emissions, while investing in renewable energy and energy efficient infrastructure.  MassDEP (2014) states “RGGI allowances have totaled $252 million for Massachusetts to date… Massachusetts can anticipate an additional $625 million in proceeds for reinvestment in energy efficiency and renewable energy by 2020” (p. 2). The success of the Regional Greenhouse Gas Initiative has been seen throughout each of the participating states. As the program shows data on the reduction of greenhouse gas emission, participating states have been recognized for their efforts in monitoring properly. RGGI, Inc. (2013a) claims “six RGGI states were ranked among the top ten states nationwide for energy efficiency investments by the American Council for an Energy Efficient Economy in 2012” (p. 4). There is no doubt that this policy provokes efficiency because it ultimately reduces the cost of energy production.

MassDEP (2014) explains:

[RGGI] caps GHG emissions from the power sector and reduces those emissions by 2.5 percent a year until 2020.  The states participating then invest the proceeds generated from auctioning emission allowances back into clean energy programs, which lower overall energy costs and grow local economies. (p.2)

As the RGGI evolves, the benefits have been noticed through energy efficiency and renewable energy grants from permit proceeds.  For example, the town of Cromwell in Connecticut recently installed a 300 kilowatt photovoltaic solar powered energy system in three schools. RGGI (2013b) explains “the town of Cromwell used a CEFIA grant of $850,000, partially funded by RGGI proceeds; to pay for the $1,882,061 required to purchase and install the PV solar systems” (para. 1). People in communities outside of RGGI must realize what this program can provide and how it can create a healthier environment in the long run. Through projects like this, public support increases and will further alert state public officials and legislators outside of the program that RGGI is an effective policy. Another great example of how the program invests its revenue in clean energy takes place in Dover, Delaware. RGGI helped install the first utility-scale photovoltaic facility in Delaware. RGGI (2013b) justifies that “The SUNPark creates enough energy to power 1,500 Delaware homes” (para. 2). It is clear that RGGI is successful in re-investing in projects that benefit the greater good of society and the environment.

            The success of  the Regional Greenhouse Gas Initiative in Massachusetts and other participating states have proven to both reduce greenhouse gas emissions and support infrastructure to further reduce pollution and overall cost of energy.  The incentives for participating states in RGGI should act as a model for other states to be on board with either RGGI or similar incentive programs across the United States.  Many opponents to the RGGI program perhaps think that the overall global pollution saved by the RGGI states have little impact overall, yet if the program were to be adopted on a larger scale, the results would impact global pollution. Massachusetts’ participation in RGGI serves as a stepping stone for other states and nations to observe how effective programs operate that shows results against pollution and dependence on fossil fuel. Instead of arrogance, policymakers need to display resilience and support policies that benefit future social well-being, the economy, and the environment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Untitled photograph of energy production pollution] Retrieved November 9, 2013, from: http://intercongreen.com

 

 

 

 

 

 

 

 

 

 

 

REFERENCES

 

 

 

Augenstein, S (2014, September 9).  N.j. could lose $500m by pulling out of emissions program. Retreived from http://nj.com

Bryk, D (2014, June 9). East coast states have limited power plant pollution for years. Retrieved from http://switchboard.nrdc.org/blogs/dbryk/east_coast_states_have_limited.html.

Environmental Protection Agency. (2013a). Climate impacts in the northeast. Retrieved from http://www.epa.gov/climatechange/impacts-adaptation/northeast.html.

Environmental Protection Agency. (2013b). Climate change: Basic information.  Retrieved from http://www.epa.gov/climatechange/basics/.

Environmental Protection Agency. (2014). Causes of climate change. Retrieved from http://www.epa.gov/climatechange/science/causes.html

Institute for Energy Research (2011). Study of the impacts of the regional greenhouse gas initiative deeply flawed. (pp. 1-9). Retrieved from http://www.instituteforenergyresearch.org.

Massachusetts Department of Environmental Protection. (2014). Massachusetts leads the way in greenhouse gas emissions reduction efforts; Successful RGGI program advocated as model for other states. (EnviroMatters: MassDEP Environmental eNewsletter). Retrieved from GeoRef database.

RGGI, Inc. (2013a). Retrieved from http://www.rggi.org/rggi.

RGGI, Inc. (2013b). Retrieved from http://rggi.org/rggi_benefits/success-stories

Evan

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