Senator Whitehouse Reintroduces Carbon-Tax Bill

Jun 18, 2015 by  | Bio |  Leave a Comment

In December 2014, Rhode Island’s U. S. Senator Sheldon Whitehouse introduced an excellent carbon-tax bill into the Senate, and I wrote a generally laudatory blog about the legislation.

On Wednesday, June 10, 2015, Senator Whitehouse reintroduced a similar, but somewhat more refined, version of the bill, S-1548.  Here is a link to the text of the bill; and here are the high points (with the relevant page numbers for those who are interested).

Senator Whitehouse’s bill imposes a tax on carbon emissions.  This alone is a very big deal, but there are two aspects that make it even better.

First, the carbon tax starts at the hefty rate of $45 per ton, and ratchets up at the rate of 2% per annum, plus inflation.  [Page 4, line 21; page 15, line 3.]  It is worth comparing this to the clearing price of carbon in the most recent auction in the Regional Greenhouse Gas Initiative (RGGI) that all six New England states are part of, $5.50 (RGGI Auction 28, held June 3, 2015).  That is, the price of carbon in the Whitehouse bill starts more than 700% higher than the carbon price under RGGI, and it goes up from there.  Most economists believe that society will have to price carbon emissions at a minimum of $82 per ton in order to achieve the carbon-emission reductions necessary to avert a climate disaster.  The ramp-up provided for in the Whitehouse bill gets us further than that, to $88.23 by 2050 (before factoring in inflation).

Second, RGGI applies only to the electricity sector; the Whitehouse bill applies to the entire economy.  [Page 15, line 3.]  Nationally, the electricity sector is the largest emitter of carbon; but here in New England the sector of the economy that is both the largest contributor of carbon pollution and the fastest growing is not electricity but the transportation sector.  Thus, the fact that Senator Whitehouse’s S-1548 affects the entire economy is critically important.

Although my December blog was generally quite laudatory about Senator Whitehouse’s carbon tax bill last year, I did note one major problem, the provision on so-called “Border Adjustments.  I said:

This provides that any mined or manufactured goods that are exported from the U.S. get a full refund on the carbon tax paid . . . The bill creates a perverse incentive to mine zillions of tons of coal for export to China; and drill zillions of new oil and gas wells to export the oil and gas to China. No carbon tax is paid on that coal (or oil or gas), but when the coal is burned in China, the carbon goes into the same atmosphere as if it were burned in the United States. (That is, climate change is a global problem, not a U.S. problem.)

Unfortunately, in this year’s bill that problem has not been fixed; the identical provision appears in S-1548.  [Page 11, lines 7 – 16.]  This was not a small problem last year, and it is not a small problem this year.

This year, Senator Whitehouse’s bill is revenue neutral, and this fact may appeal to fiscal conservatives.  (Although last year’s bill purported to be revenue neutral, it did allow for some expansion of government programs; this year the bill purports to be revenue neutral and actually is.)  Here is where the money would go:

  • The bill cuts the top marginal corporate tax rate from 35% to 29%. [Page 24, line 14.]
  • The bill provides a $500 tax credit per taxpayer ($1,000 for couples filing jointly) [page 26, line 7], to be adjusted for inflation. [Page 27, line 17.]
  • The bill provides an analogous $500 benefit to Social Security recipients and veterans program beneficiaries who might not qualify for the tax credit otherwise. [Page 29, line 6.]
  • The bill provides up to $20 billion per year to the states for distribution to low-income households, rural families, and workers in industries (like coal mining and oil drilling and refining) who will be especially hurt as the economy transitions away from reliance on fossil fuels. [Section starting on page 31.] This last point is especially important because it seeks to mitigate the effects of the change on vulnerable workers.

Senator Whitehouse is serious about climate change.  He has now given over 100 weekly speeches on the Senate floor addressing one subject only:  climate change (and the urgency of addressing it).

Two days before S-1548 was introduced, I heard Senator Whitehouse speak in Newport at the annual symposium of the New England Conference of Public Utilities Commissioners (NECPUC).  Although he could have addressed any subjects he wanted, Senator Whitehouse stuck to only one:  climate change.  He said, in part:

Eighty-three percent of Americans, including six in ten Republicans, want action on carbon emissions.  And with young Republican voters, more than half would describe a climate-denying politician as “ignorant,” “out-of-touch,” or “crazy.”

Having worked in the field myself for some years, I am not sure that Senator Whitehouse is entirely correct about the breadth of popular opinion on climate change.  But I am sure that he believes that himself, and is acting on that belief in a way that few elected officials at the national level are doing.

Vermont is Burning the Furniture

Apr 30, 2015 by  | Bio |  Leave a Comment

photo courtesy of Vicki Burton @

photo courtesy of Vicki Burton @

Vermont legislators are scrambling to plug the budget – and there are plans to raid funding for heating efficiency to do that. This is troubling on many levels. It raids monies from the Regional Greenhouse Gas Initiative (RGGI) to backfill another shortage. It also comes on top of the proposal to shortchange energy efficiency as part of otherwise helpful energy legislation that would expand renewables and reduce fossil fuel use.

The end of a legislative session always brings out some of the worst ideas. It seems that as the warm weather approaches in Vermont, some lawmakers are keen to throw the furniture in the fire to eke out that last bit of heat after the woodshed is empty.

Burning furniture is burning money. Energy efficiency consistently delivers the biggest bang for the buck by reducing pollution and saving money for all of us. Smart investments should not be held hostage to close budget gaps.

A vote is expected on Friday May 1. If you are in Vermont, you can call your Senator and leave a message with the Sergeant-at-Arms at 802-828-2228 and tell your Senators to leave efficiency funding alone.

Federal Carbon Tax Bill Introduced Into Senate

Dec 17, 2014 by  | Bio |  1 Comment »

Earlier this month, Rhode Island’s U.S. Senator Sheldon Whitehouse, who has made climate change his signature issue, introduced into the Senate the American Opportunity Carbon Fee Act (S-2940). The bill imposes a direct, simply-applied, economy-wide tax on carbon emissions. While the bill is not perfect, it is quite excellent (and has a number of very interesting features).

The centerpiece of the bill is that it immediately imposes an economy-wide tax on carbon at the rate of $42 a ton. This figure ratchets up at a rate of 2% annually plus inflation (as measured by the Consumer Price Index).  At that annual rate of increase, carbon would be priced at $85.68 a ton in 2050, a bit more than the $82/ton rate widely recommended by scientists for properly pricing carbon so as to avert a climate disaster.

That is, there are three very salient differences between the Whitehouse bill and the Regional Greenhouse Gas Initiative (RGGI), the current carbon-pricing scheme that has been adopted by nine northeastern states (including all six New England states):

  • RGGI covers only the electricity sector; the Whitehouse bill covers virtually the entire economy.
  • The most recent RGGI clearing price for carbon (Auction 26, December 3, 2014) was only $5.21 per ton; the Whitehouse bill imposes a much more appropriate price, because it starts at over 800% of that amount and then ratchets up.
  • RGGI prices carbon by means of cap-and-trade; the Whitehouse bill is a straight tax.

A key part of the Whitehouse bill is that it requires governmental agencies, notably EPA and the Department of Energy, to collect data on all methane emissions resulting from extraction (including coal mining and oil drilling!) and distribution (including all gas pipeline losses and fugitive emissions) – and to impose the same carbon tax (starting at $42/ton) on methane based on the methane’s CO2 equivalent! This is important because, depending on the time horizon used, methane is 21 times or more as powerful a greenhouse gas as CO2. Thus quantifying and pricing methane emissions must be an important component of any overall plan to address climate change – but methane is also one that is frequently overlooked (especially by people who push increased use of natural gas as a means of lowering greenhouse gas emissions).

Interestingly, the bill directs 100% of the carbon-tax proceeds to a new “American Opportunities Fund,” and specifies what the fund may be used for. This includes things like economic assistance to low-income households hurt by the newly-imposed tax, and providing transition assistance to workers and businesses in fossil fuel industries. However, the bill is not, and is not intended to be, revenue-neutral. Money in the Opportunity Fund can also go to the general fund to offset tax cuts, invest in domestic infrastructure, and go for climate mitigation and adaptation measures.

I discussed this last point with one of Senator Whitehouse’s staff aides. Obviously, one potential selling point with Tea Party and other fiscal conservatives would be if the bill were truly revenue neutral, with zero dollars going to enlarge the federal government, and 100% of the proceeds being returned to the American people. Senator Whitehouse’s staff aide acknowledged this point. However, Senator Whitehouse seems to be viewing the varied ways of using the money as a way of drawing in other sponsors for the bill: sponsor the bill and help us allocate this large new source of money. (Readers can consider whether or not they agree with this decision, but this is the decision that Senator Whitehouse made.)

The one major flaw I see in the bill is a provision on “Border Adjustments.” This provides that any mined or manufactured goods that are exported from the U.S. get a full refund on the carbon tax paid. The hypothetical I put to Whitehouse’s staffer was this: The bill creates a perverse incentive to mine zillions of tons of coal for export to China; and drill zillions of new oil and gas wells to export the oil and gas to China. No carbon tax is paid on that coal (or oil or gas), but when the coal is burned in China, the carbon goes into the same atmosphere as if it were burned in the United States. (That is, climate change is a global problem, not a U.S. problem.) The answer I got for Senator Whitehouse’s aide was two-fold: (a) Yes, my hypothetical accurately describes this provision of the bill; and (b) Senator Whitehouse did this on purpose, believing that the provision was a political necessity.

One final set of observations: it is worth comparing and contrasting the American Opportunity Carbon Fee Act to the 2009 Waxman-Markey bill (that passed the House but died in the Senate). (I am not thinking here of the obvious contrast that Waxman-Markey priced carbon by means of a cap-and-trade system, while the Whitehouse bill prices carbon by means of a carbon tax.) Waxman-Markey was a 986-page monstrosity; it took me a full week just to read through it and understand how it worked. In contrast, the Whitehouse bill runs 28 pages; it is short, direct, and easy to understand. Moreover, Waxman-Markey had huge give-aways to the fossil fuel industry. In fact, the immediate give-aways to certain coal companies would have tripled the book value of those companies overnight. At the time Waxman-Markey was pending, one environmentalist, with tongue firmly in cheek, said that if Waxman-Markey passed, investors would have been well advised to sink their entire retirement savings into coal mining companies (because of those give-aways). The Whitehouse bill has no such pernicious give-aways to fossil-fuel industries (though there is the export loophole that is significant).

All in all the American Opportunity Carbon Fee Act is a very significant bill well worth knowing about.

The Time Has Come to Scale Up Energy Efficiency in New Hampshire

May 14, 2014 by  | Bio |  Leave a Comment

Increasing energy efficiency is among the cheapest and cleanest ways to save on energy costs, reduce energy demand, and lower greenhouse gas emissions that intensify the effects of climate change. In the words of a recent report on New Hampshire’s energy efficiency potential, think of energy efficiency as “using less energy to provide the same [or better] service.” When compared with new energy resources, saving energy through efficiency measures is actually cheaper and in many cases much cheaper. It also can create thousands of local jobs and boost diverse sectors of the economy.

Yet, among the New England states, New Hampshire has not lived up to its thrifty reputation when it comes to energy efficiency. With big energy projects garnering much of the attention in New Hampshire in recent years, the Granite State hasn’t pursued investments and policies that would prioritize energy efficiency over imported fossil fuels and other resources. The good news is that there are encouraging efforts underway to change that, including legislation that goes before the New Hampshire Senate tomorrow.

New Hampshire law does encourage energy efficiency with programs that are similar to those in other states. While modest in scale, these programs are quite popular and provide energy audits, rebates, and other incentives to households and businesses, funded through a very small charge on electric and natural gas bills and proceeds of the Regional Greenhouse Gas Initiative (RGGI).


Installation of energy saving spray foam insulation (photo credit: wikimedia/chicagosprayform)

The energy efficiency programs that New Hampshire has implemented have already yielded strong savings. Just one of the programs, the “Pay for Performance” program (P4P) funded by RGGI, estimates it has saved New Hampshire building owners 10.9 Million kWh in electric energy consumption, generating 26 percent cost savings from a $11.5 Million investment (incentives covered 35 percent of that investment). P4P says these savings achieved a 12,000 ton reduction in greenhouse gas emissions. Assuming the same rate of greenhouse gas reductions, 6.6 percent in energy savings statewide could reduce greenhouse gas emissions by over 787,000 tons.

Unfortunately, despite existing programs, New Hampshire ranks last in New England for energy efficiency policy, according to a 2013 State Energy Efficiency Scorecard released by the energy efficiency organization ACEEE. In similar fashion, Northeast Energy Efficiency Partnerships found that New Hampshire is “falling behind” other states in the region on energy efficiency. A big reason is that some energy efficiency funds, such as dollars collected under RGGI, have been redirected away from their intended use. In recent years, business lobbyists and some state agency staff also have questioned the costs of energy efficiency investments and have been reluctant to pursue well-grounded policies that have already been implemented in other states, like reorienting utilities to incentivize energy efficiency. Most importantly, the state has yet to pass a policy mandating significant and measurable increases in energy efficiency.

Over the long-term, increasing energy efficiency and intelligently changing utility incentives will bring New Hampshire excellent returns on investment, as a progression of technical studies have demonstrated and diverse stakeholders have argued. A recent study commissioned by New Hampshire’s Office of Energy and Planning estimates that achieving all “cost-effective” energy efficiency improvements in New Hampshire’s buildings could save the state as much as 715.4 million kWh in electric energy annually. This would require a graduated capital investment of $941 million over 15 years, yielding a remarkable $2.9 billion return. The $195 million in potential annual savings represents 6 percent of total energy expenditures in 2012. Indeed, there are even greater savings possible that are not discussed in the study, which recommends a series of innovations in energy efficiency programs through adoption of what is called an Energy Efficiency Resource Standard (EERS).

Energy-Efficiency-in-New Hampshire

Thermal imaging to identify energy waste (photo credit: flickr/Walmart)

The environmental case for ramping up energy efficiency in New Hampshire only gets more urgent. In the last few weeks, both President Obama’s recent National Climate Assessment and the IPCC’s landmark Fifth Assessment report have made the impacts of failing to respond to climate change abundantly clear. The reports explain that significant amounts of anthropogenic greenhouse gasses are already impacting many communities around the world. Those particularly hard hit are the poor, communities of color, children and the elderly. Many scientists believe that climate change intensified Hurricane Sandy’s destruction in the Northeast, and that the resulting temperature increases and ocean level rise will bring more floods to New England. A recent study at UNH supported that conclusion with analysis specific to the Granite State. Without committed action from the private and public sectors in the United States to using what is available (such as energy efficiency improvements) to reduce greenhouse gas emissions, the myriad negative consequences of climate change are more likely to become the new norm.

With this backdrop, New Hampshire is finally moving forward with policy changes that will help the state achieve its energy efficiency potential. Tomorrow, the state Senate will be voting on two energy efficiency-related bills (House Bills 532 and 1129).

  • HB532 would strengthen New Hampshire’s “Property Assessed Clean Energy” law, which ties investments in energy-related projects to the building, not the building owner, through property assessments used by municipalities. The bill would enable much more ambitious projects such as deep retrofits of existing buildings by allowing for significant private investment. Our colleagues at the Jordan Institute have taken a lead role in advocating for this bill.
  • HB1129, which is based on a series of four studies of energy efficiency in New Hampshire, would create a legislative study group tasked with recommending ways to increase all cost-effective energy efficiency in buildings across the public and private sectors and appropriate legislation for 2015. Along with the New Hampshire Sustainable Energy Association and the New Hampshire Clean Tech Council, CLF offered testimony in favor of HB1129 in both the House and Senate. (A complementary effort is already underway at the NH Public Utilities Commission.)

These bills alone will not achieve the energy efficiency savings in New Hampshire that studies have indicated are attainable. Getting there will require boosting energy efficiency investments with an Energy Efficiency Resource Standard. And it will also require addressing the challenge of addressing “lost revenue” that utilities will experience as energy use moderates and declines as those investments bear fruit. I will explore both issues in a future post.

In the meantime, take a moment today to call your state senator to support energy efficiency in New Hampshire by voting in favor of HB532 and HB1129!

Jeff Fromuth is an intern in CLF’s New Hampshire office.

The Battle to Save the Climate Continues: The Northeastern States Reboot and Improve “RGGI”

Feb 7, 2013 by  | Bio |  1 Comment »

I was on television the other night talking about the impact of sea level rise and storms on Boston and how the impacts of global warming mean that coastal cities like Boston face very real threats. During that interview, I found myself comparing the process of adapting to a changed climate to finding out the house is on fire and grabbing the cat and the kids and getting out – steps that should be followed by calling the Fire Department in order to save the rest of the house and neighborhood.

The climate equivalent of calling the Fire Department is reducing carbon emissions to head off even worse global warming and the wide gamut of effects that we are feeling and will feel from that phenomenon. On the national level, our problem is that Congress is not sure what kind of Fire Department we should have – and in fact a powerful contingent of folks in Congress refuse to believe in the existence of fire.

But here in the upper right hand corner of the U.S., the Northeast and Mid-Atlantic, our state governments have been rolling the big red truck out of the garage and taking action to address the greenhouse gas emissions from power plants, a key source of this pollution causing global warming, by capping carbon emissions through the program known as the Regional Greenhouse Gas Initiative (“RGGI”).

Today, February 7, those states (including the New England states of Massachusetts, Maine, Vermont, New Hampshire, Rhode Island and Connecticut) announced an agreement  to strengthen that cap on carbon  from 165 million tons down to 91 million tons (2012 levels).

This step, along with associated refinements to the RGGI program, is an important step toward meeting the climate imperative of an 80% reduction in greenhouse gas emissions by 2050, but we temper our applause by clearly noting that more sweeping action will be needed to get there. Listen to the wise words of Jonathan Peress, my colleague and our lead advocate on RGGI from our official release marking this announcement:

“This is a very meaningful step in the evolution of RGGI and a powerful example of how markets can drive solutions to climate change,” said N. Jonathan Peress, VP and director of CLF’s Clean Energy and Climate Change program. “Over the past four years, the RGGI program has proven that putting a price on carbon emissions and using the revenues to expand energy efficiency and clean energy as part of our mix is a formula that works. The program refinements announced today will further accelerate the ongoing transition away from dirty and inefficient fossil fuel power plants to meet our energy needs. Once again, the Northeast and Mid-Atlantic states have demonstrated a path forward for others areas of the country.”

RGGI, the nation’s first market-based cap and trade program requires power plants to hold permits, known as “allowances,” for each ton of CO2 they release into the atmosphere. Revenue from the sale of these allowances is reinvested in energy efficiency programs that reduce costs for businesses and make the states more competitive.

Peress continued, “We applaud the New England states for supporting and strengthening RGGI as an important tool in their toolkits for reducing greenhouse gas emissions and advancing a clean energy economy. The RGGI program has proven that carbon cap-and-trade programs can reduce carbon pollution while contributing to economic growth and prosperity. However, state leaders still have much to do to meet the emissions reductions levels dictated by science and our understanding of what it will take for our region to thrive in the face of climate change. Today’s action to strengthen the regional electric power plant cap-and-trade program is a step in the right direction, but we have a long way to go.”

The new cap level locks in emission reductions achieved to date, and continues to drive additional reductions through 2020. Since it was launched in 2009, economic experts say the increased energy efficiency that RGGI is driving has been generating greater rates of economic growth in each participating state.

During the years (nearly a decade) since RGGI was first proposed, much has changed. Emissions have continued and we have moved closer and closer to climate disaster, Congress has considered and failed to pass (despite success in one chamber) a comprehensive climate bill, international negotiations on a climate treaty have faltered. But it hasn’t been all bad news: states, including RGGI states like Massachusetts and Connecticut, have adopted legal requirements for climate action and California has moved forward with its own similar program.

When we began the RGGI adventure, we knew that while action would be necessary on the national and global level, the states and regions were the best forum to really take action immediately and effectively. That strategy has paid off in many ways, including the pivotal Supreme Court case brought by Massachusetts and allied states, with support from a host of environmental groups including CLF, that continues to propel forward action by EPA. Now, this decision by the states to turn RGGI up a notch in order to protect the climate and build clean energy and efficiency tells us that this is still the path to travel.

New Hampshire’s Political Winds Help New Hampshire’s Environment

Nov 8, 2012 by  | Bio |  Leave a Comment

Two years ago, Republicans dominated New Hampshire’s elections at every level, winning races for the U.S. Senate and House of Representatives, taking complete control of New Hampshire’s Executive Council, and locking up strong majorities in the state legislature.  On Tuesday, the political pendulum swung back in a way that is likely to end some unfortunate politics that have dominated the last two years, and to advance needed efforts to protect the health of New Hampshire’s environment and communities.

Democrat Maggie Hassan won the race for governor; Democrats Anne McLane Kuster  and Carol Shea-Porter won seats in the U.S. House of Representatives, making New Hampshire the first state in the Union to have an all-female Congressional delegation; the Executive Council shifted to a 3-to-2 Democratic majority; and Democrats reclaimed a majority in New Hampshire’s 400-seat House of Representatives and nearly drew even in the Senate.  (To learn more about changes in the state legislature, click here and here.)

So, what do these changes mean for the environment and the issues CLF is tackling in New Hampshire?

Clean Energy & Climate Change: At the state level, the last two years have been marked by aggressive efforts in the legislature to end New Hampshire’s participation in the Regional Greenhouse Gas Initiative, or “RGGI,” and to preclude New Hampshire from participating in region-wide efforts to adopt clean-fuel standards aimed at reducing global warming pollution.  Governor-elect Hassan has made no secret of her support for RGGI, and a more balanced legislature should put an end to the sort of extreme, anti-science/anti-climate-change ideology that distracted the legislature – particularly NH’s House – over the past two years.  At the federal level, where Representative Charlie Bass has acknowledged the need for action on climate change and has on many occasions cast votes in support of renewable energy and protecting air quality, Representatives-elect Kuster and Shea-Porter will be allies in the effort to address the threats of global warming and to build a clean energy economy. (Click here to read about the recent Bass – Kuster debate and the candidates’ discussion of climate change.)

Northern Pass: Senators Shaheen and Ayotte, and Representative Bass, have continued to be proponents of a fair permitting process in the controversial Northern Pass project. We’ll be working hard to engage Representatives-elect Kuster and Shea-Porter and Governor-elect Hassan to build an even stronger voice for a fair permitting process – one that protects New Hampshire’s environment and secures a clean energy future for the Granite State.

Great Bay: In the past two years, Representative Frank Guinta has worked to undermine efforts to solve water pollution problems in the Great Bay estuary, going so far as to introduce legislation aimed at preventing EPA from issuing new permits to reduce nitrogen discharges, and politicizing the issue of nitrogen pollution – and EPA needed action – in a Congressional “field hearing” in Exeter. Representative-elect Shea-Porter, who has met with Great Bay stakeholders in the past, will provide a needed respite from such political theater.

The Capitol Corridor Rail Project: This year, New Hampshire’s Executive Council voted 3-2 (with Councilors Ray Burton and Ray Wieczorak in the minority) against receiving federal funds to study the re-establishment of train service from Boston to Concord, via Nashua and Manchester. Fortunately, the opportunity to accept these needed federal funds has not yet disappeared. The election of Debora Pignatelli, Chris Pappas and Colin Van Ostern – each of whom has been highly critical of the Executive Council’s vote to reject these funds – signals a bright future for getting the Capitol Corridor rail project back on track.

RGGI’s Results: Good For Our Climate, Economy And Consumers

Dec 6, 2011 by  | Bio |  Leave a Comment

Photo courtesy of kriswho @ flickr. Creative Commons.

If you listen to the word on street, or read the headlines, you’ll have 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 is a program to creates jobs, generates money, and reinvests each of those in our communities to make them stable, healthier and happier.

According to a study by The Analysis Group, it turns out 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. In its first three years, it 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, efforts that increase efficiency and reduce fuel use benefit consumers, manufacturers and employers.

As the first regional program in the country, how well it is functioning is being observed 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 answers these questions in full. In case you want them in short: $1.6 billion, customers and definitely not.

Outpacing now stalled negotiations on a national greenhouse gas trading program, ten Northeastern and Mid-Atlantic states formed RGGI in 1999, 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 as they account for one-sixth of the population in the US and one-fifth of the nation’s gross domestic product.

These consumers, and this regional economy, now reflects a price on CO2 emissions. And after three years, the results are in. There are a few points to highlight.

First, the program is economically and environmentally effective. As power plant owners have spent roughly $912 million to buy CO2 allowances, emissions have gone down, as a consequence of both RGGI and larger economic trends. At the highest level, then, RGGI has proven to be economically productive while meeting its emission objectives.

Given the way RGGI dollars interact with local economies – through energy efficiency measures, assistance to low income customers to help pay their electricity bills, education and job training programs, and more – the dollars have multiplier effects. Once amplified by these local and regional programs, RGGI’s $912 million in allowance expenditures “produced to $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, due to reduced demand and investment in energy efficiency, 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 this program.7,200 new job-years were created in New England alone, while the region reduced its payments to out-of-region fossil fuel providers by $210 million.

So too are the benefits to energy consumers. As a consequence of energy efficiency programs implemented by RGGI funds and focused on reducing consumption of oil and natural gas heat in homes, energy consumers across the region have saved nearly $174 million through RGGI programs. Furthermore, energy consumers came out ahead of power generators. “Of the three regions, only in New England do the savings to electricity consumers outweigh the reduction in revenues by power generators,” says the Analysis Group.

This benefit is most notably due to New England’s 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 rising burden, this is undoubtedly a good thing for New England.

As our country, and New England, faces tough times our politicians and people are calling for programs that create jobs, save money, and protect our environment. RGGI does all three.

Regional Greenhouse Gas program is a win for the economy and environment – so let’s do more!

Nov 15, 2011 by  | Bio |  Leave a Comment

A study released today documents the powerful benefits of the Regional Greenhouse Gas Initiative (RGGI) – the nation-leading effort by Northeastern and Mid-Atlantic states to reduce greenhouse gas emissions from power plants while building up energy efficiency and clean energy efforts in the states.

The study found that RGGI created $1.6 Billion in net economic benefits across the region ($888 million in New England alone).  The program saved electricity customers $1.3 Billion on their energy bills region-wide due to investment by the program in energy efficiency and created 16,000 Job Years (a standard measure of employment) during the first 3 years of the program (including temporary and permanent positions).   The cost of the program was minimal, creating an imperceptible 0.7% electricity price increase on customer bills across the region that was more than offset by the benefits of the program.

CLF has been deeply involved with the RGGI program from its inception. We strongly believe that this is solid proof that RGGI, while first and foremost an effort to reduce greenhouse gas emissions, is also a win for the economy, consumers and business, as well as the environment.

We must apply the lessons of RGGI to date and move beyond this pilot phase, scaling up the program to further reduce pollution, create even more jobs and reduce energy bills on a much greater scale, and take this effort into other parts of the nation.

RGGI has proved that a well-designed greenhouse gas reduction policy is a win for just about everybody.  The complaints (amplified by their well-financed megaphone) from the filthy few companies who make their money by extracting and selling coal and oil, at great cost in lives and environmental damage, should not distract us from hearing that very positive story.

Attempt to undermine RGGI fails

Jul 13, 2011 by  | Bio |  Leave a Comment

A judge in New Jersey has determined, after an exhaustive legal proceeding, that RGGI, the regional program to regulate emissions of Carbon Dioxide (the primary pollutant causing global warming) from power plants,  can and must keep confidential internal market information. All sophisticated auctions and markets, like the stock and commodities markets have very similar rules because the traders who operate in these markets could potentially manipulate and subvert the market if they had internal information, like exactly what other businesses bought and sold, and the exact prices they paid.

When the ideological opponents of climate action filed a lawsuit in New Jersey to force full disclosure of all information about the RGGI auction they were in effect asking to force disclosure of this information, a release that would have created a real risk of market manipulation.  Even more suspiciously, it appeared that some of those same opponents were financially backed by businesses who were trading in the RGGI market and would have financial interests in the release of that information.

Now that lawsuit has been dismissed by a wise judge in New Jersey.  In a 75 page decision (posted on the website of the organization that brought the lawsuit) the judge determined that “Clearly, the RGGI auction information is often identified as confidential due to the detrimental effect its release would have on the auction process . . . Thus, the court agrees with defendants that the [disclosure] request—including the names of the bidders, individuals bids, and amount and type of allowances requested are proprietary commercial or financial information and should be not be disclosed.”

The bottom line is that RGGI continues to function, acting as a limit on greenhouse gas emissions from power plants and a critical source of support for clean energy development, especially the deployment of energy efficiency.  It is a well functioning market and program and should be preserved and enhanced.  The judge’s decision was not unexpected as this kind of internal confidentiality is so needed and common and is a complete vindication for the states in the RGGI program and the folks who administer the program for them.