As the Regional Greenhouse Gas Initiative (RGGI) approaches its seventh anniversary, the program’s nine participating northeastern states – which includes all of New England – are conducting a periodic review of the program to assess its successes and impacts, as well as what, if any, modifications to implement.
RGGI’s successes to date have been impressive. According to a new report, The Investment of RGGI Proceeds Through 2014, RGGI has resulted in a 45% reduction in climate-damaging greenhouse gas emissions from the power sector and spurred $1.37 billion in investments in energy efficiency in the program’s nine states. At the same time, the region’s GDP has increased by 8%. These successes are projected to amount to a lifetime savings of more than 20 million megawatt hours of electricity and $4.6 billion in energy bill savings for residents of the northeast.
CLF was actively involved in the creation of RGGI – a groundbreaking carbon reduction program – and we commend it on these successes. Looking forward, we urge it and leaders in the RGGI states to build on these gains by strengthening the annual emissions cap so that we can cut carbon pollution even more and help the RGGI states meet their 2030 and 2050 overall targets for greenhouse gas reductions.
Building on Success
While RGGI’s successes to date are laudable, the program requires further modification to ensure states meet their long-term emissions goals. As a result of the first periodic program review in 2012, the RGGI states revised the annual rate at which the program’s regional carbon dioxide (CO2) cap declines to 2.5% from 2015–2020. As RGGI conducts its current program review, CLF is urging the RGGI states to double the cap to 5% for the years 2021–2030. The higher cap will mean deeper cuts in carbon pollution year over year during this critical decade. We know this rate is achievable, as emissions are already being slashed at this rate under the current RGGI program.
As CLF and others have argued, the RGGI states should also restructure or eliminate the Cost Containment Reserve (CCR), a tool added during the 2012 program review to moderate the price of program allowances of CO2 emissions whenever the demand for those allowances exceeds the initial supply at the opening of a RGGI auction. Recent studies estimate that if left in place, the CCR could lead to an additional release of 65 million tons of carbon pollution.
These two program modifications will achieve even further CO2 emissions reductions through RGGI, and will help the RGGI states meet their commitment to reduce emissions to 35–45% below 1990 levels by 2030 and 75–80% below 1990 levels by 2050. The modifications will also ensure that RGGI remains a groundbreaking model for reducing carbon emissions in the battle against climate change – a role made even more important as countries begin determining how to satisfy their individual obligations under the Paris Climate Agreement, which entered into force earlier this month.