Northeast Cap and Trade System Boosts Economic Growth
April 18, 2012
Since 2001, 10 Northeast states that participated in the Regional Greenhouse Gas Initiativehave proved to be pioneers in reducing fossil fuel pollution and creating a clean energy economy, according to a report released Wednesday by Environment Connecticut.
Between 2001 and 2009, the six New England states along with New York, New Jersey, Maryland and Delaware cut per capita carbon dioxide emissions 20 percent faster than the rest of the nation. In those years, the Northeast’s total economic output per capita grew 87 percent faster than the rest of the nation, the report said.
“Those figures challenge the claim that reducing emissions undermines economic growth,” said Johanna Neumann, regional director of Environment Connecticut, which is based in West Hartford.
Overall, the 10 states reduced the creation of carbon dioxide from energy use by nearly 18 percent between 2000 to 2009. During that same period, per capita gross domestic product in the 10 states increased by more than 8 percent, while the rest of the nation experienced a 4.5 percent increase in per capita GDP, the report said.
Participating northeastern states have realized nearly $1.6 billion in consumer savings, according to a study last year by the Analysis Group, the report said.
“The initiative requires polluters to pay for the right to emit carbon pollution. Those payments are invested in programs to install more efficient lighting, heating and power generating equipment.
This is not the first study to show the program’s benefits.
A study by the Boston consulting firm Analysis Group that was commissioned by four nonprofit foundations last year noted that states participating in the program had received $912 million over three years by charging electricity providers for their carbon dioxide emissions. Many of the states invested most of those funds in programs to retrofit homes and buildings to make them more energy-efficient, lowering consumption of electricity.
So while the program led to a slight rise in electricity rates – less than 1 percent — consumers in those states ended up seeing lower bills over all as their demand declined.
“All told,” the study said,” electricity consumers over all – households, businesses, government users and others – enjoy a net gain of nearly $1.1 billion as their overall electric bills drop over time. This reflects average savings of $25 for residential consumers, $181 for commercial consumers and $2,493 for industrial consumers over the study period.”
…RGGI has saved customers money and created jobs, as participating states have used proceeds from the auctions to promote energy efficiency and electricity generation from renewables
• Because of lower demand for allowances with the much greater than expected declines in emissions, participating states are retiring more than 90 percent of unsold credits, so as to prop up the prices of future allowances and encourage further carbon cuts
(In May last year, New Jersey Governor Chris Christie took the state out of RGGI, the whole notion of climate change having become a dirty word in Republican politics. But it’s worth noting that party leaders like John McCain and Newt Gingrich had once strongly promoted cap-and-trade.)