An Update on the Regional Greenhouse Gas Initiative

Share this

 Dan Allegretti Vice President of State Government Affairs at Exelon photo by Kay MannOn December 8, 2016, Peter Shattuck, Director of the Clean Energy Initiative at the Acadia Center, Dan Allegretti, Vice President of State Government Affairs at Exelon, and Kathleen Meil of Evergreen Home Performance spoke at E2Tech’s forum event titled, “Wake Up! A Convenient Forum on Climate Change & RGGI”. Green Energy Maine was there and brings you this report.

The Regional Greenhouse Gas Initiative (RGGI) is "a victim of [its] own success," Dan Allegretti proclaimed of the market-based cap and trade agreement. Cap and trade is an incentive-based approach to cut greenhouse gas emissions. Under the RGGI agreement, which exists in 9 northeast states, a maximum ceiling is established for carbon emissions from energy production, and credits are sent to auction for energy producers to purchase. If a producer emits fewer emissions than they are credited, they may sell their credits to other energy producers who exceed their emissions limits. This in turn creates an incentive to discover mechanisms to reduce carbon emissions. Market-based solutions to reduce negative environmental impacts force competition and produce innovation, which limits the costs associated with environmental policy.

With the help of RGGI, carbon dioxide emissions have been reduced by 37 percent since 2009, and have been cut in half in the past 10 years. Energy costs have not increased significantly despite the requirement to purchase emission credits, and in fact have decreased between three and six percent since the initiative began. To a large extent, the successes of the RGGI program are not well known. As Mr. Allegretti stated, much of the public is not aware of the emissions reductions from power plants.

Still, there are challenges with the regional initiative. Because transmission lines cross boarders, carbon reduction goals can be undermined through “leakage” from non-participating states and provinces, Allegretti explained. This makes it possible for a state to consume energy produced in non-participating states, without accounting for the associated greenhouse gas emissions in that state’s carbon inventory. Nonetheless, the Regional Greenhouse Gas Initiative has inspired support for similar initiatives in other regions of the United States, notably in the Midwest and western states.

Peter Shattuck Director of the Clean Energy Initiative at the Acadia Center photo by Kay MannMost states participating in the RGGI agreement invest the revenue generated by sale of emission credits in energy efficiency measures. Ninety-two percent of the revenue earned in from RGGI credits in Maine has been invested in efficiency measures, which are overseen by the Efficiency Maine Trust, according to Peter Shattuck, Director of the Clean Energy Initiative at the Acadia Center in Boston, Massachusetts. Revenue reinvestment has generated approximately 2,000 jobs in the northeast since the creation of RGGI, Shattuck added. Maine has an emissions reduction goal of 35 to 45 percent below 1990 levels by 2030, which is established by Maine state policy, rather than by federal policy.

Kathleen Meil Communications Director of Evergreen Home Performance photo by Kay MannInvestments in energy efficiency measures are particularly helpful in Maine, which has the oldest housing stock in the nation, explained Kathleen Meil, Marketing & Customer Relations Manager at Evergreen Home Performance. Unpredictable heating costs and drafty homes can cause significant uncertainty for many Maine families. The Home Energy Savings Program, which one third of RGGI revenue in Maine is dedicated to, helps alleviate the financial burden of winterizing homes.

The carbon cap under RGGI will continue to be reduced until 2020, allowing electricity producers time to discover carbon reduction technologies, before it is leveled off. Since the Regional Greenhouse Gas Initiative came to be, cost savings from energy efficiency measures have exceeded any increase in costs. With its success, "RGGI is recognized worldwide," Allegretti boasted.

Watch for future forums on the E2Tech website events page. Learn more about RGGI here.

Photos of Dan Allegretti, Peter Shattuck and Kathleen Meil by Kay Mann. Special thanks to guest author Tom Redstone for this article.