Nine-State Collaborative Pushes Cap and Trade

By TIM FAULKNER/ecoRI News staff

For all of the national opposition to a cap-and-trade program for cutting greenhouse-gas emissions, there’s been scant push-back in Rhode Island and resistance in only a few states to the Regional Greenhouse Gas Initiative (RGGI).

At public hearings here in November and January, there was no opposition to lowering the carbon output for major power plants across all nine RGGI states. A lone environmental group, Environment Rhode Island, stated its support for the lower emission standards and tweaks to how Rhode Island spends its RGGI revenues.

“The Northeast can and must make a meaningful contribution to reducing the impacts of global warming by significantly reducing its emissions of carbon pollution,” said Channing Jones, program director for Environment Rhode Island, at the Nov. 22 hearing.

Since it went into effect in 2009, RGGI has delivered mostly positive results. A report by Analysis Group shows the program helped cut carbon emissions by 40 percent from 2005 levels. A jump in lower-emission natural gas was a big factor, but during its first three years RGGI sent $912 million to states from the sale of carbon allowances. That money funded energy-efficiency programs, boosted renewable-energy projects and subsidized loan-assistance programs. It also helped reduce energy demand and created 16,000 jobs, according to the study.

The added cost to electricity suppliers, which is passed on to consumers, is offset but an overall drop in electricity usage, according to the 54-page report. “This reflects average savings of $25 for residential consumers, $181 for commercial consumers and $2,493 for industrial consumers over the study period."

Rhode Island’s RGGI representative Frank Stevenson, supervising air quality specialist with the state Department of Environmental Management (DEM), is impressed by the ability of RGGI states to agree on changes and move forward. “It‘s really been a model of interstate cooperation,” he said. “It has all been very successful.”

Opposition, so far, has come from chapters of the conservative group Americans for Prosperity in New Hampshire and New Jersey. The group, supported by the Koch brothers, is seen as influencing New Jersey Gov. Chris Christie from dropping out of RGGI in 2011. The New Hampshire and Maine legislature also came close to bailing on RGGI.

“That’s been where the opposition is coming from, an ideological opposition to cap and trade,” said Peter Shattuck, director of market initiatives for Environment Northeast (ENE), an environmental group that monitors RGGI and other energy programs.

RGGI’s cap-and-trade model isn’t a new concept. It was based on successful programs for reducing ozone-depleting emissions, which helped curb acid rain. The cap-and-trade concept was offered by Republicans as a market-driven alternative to pollution reduction, while the RGGI concept itself was introduced by a Republican, Gov. George Pataki of New York. Four Republican governors signed on to RGGI, including then-Rhode Island Gov. Donald Carcieri.

The tide of opposition may also be changing. New rules for carbon emissions are expected from the Environmental Protection Agency (EPA) in June. And RGGI, Shattuck said, might be the model states must adopt to comply.

The state-by-state approach to climate reduction might find success as a grassroots program that avoids the grandstanding in Congress, he said. “The question is, will it prompt other states to meet CO2 standards.” 

RGGI states include Rhode Island, Massachusetts, Connecticut, Delaware, Maine, Maryland, New Hampshire, New York and Vermont. California runs a similar cap-and-trade system.

The emission standards apply to fossil-fuel power plants with capacity of 25 megawatts or greater. There are 209 such plants in the region and six in Rhode Island.