How Some States Are Making Carbon Pollution Cuts Really Easy


While some states and lawmakers are complaining about the EPA’s new carbon limits, or gearing up to block and delay the rule, one group of states is already well on their way to big emissions cuts, and they’re making millions of dollars from it. The EPA took its first major step to regulate carbon emitted from existing power plants Monday, as required by law, and issued guidelines on reducing carbon emissions, allowing states to come up with their own plans or join in regional compacts. In the nine states participating in the Regional Greenhouse Gas Initiative (RGGI, often pronounced “Reggie”) regulators are finding that they already have the framework in place to reduce greenhouse gases, help the economy, and create jobs. And other states are taking notice.

The groundwork began in 2003, when several northeastern and mid-Atlantic states started talking about coordinating greenhouse gas reductions, kicking off years of study and planning that would turn into RGGI. They decided on a regional cap-and-trade system, which puts a limit on the total amount of carbon allowed to be produced in the region, then auctions pieces of that limit off to power plants and other emitters.

The state then keeps the money earned from those auctions, a total of $1.6 billion since they started in 2008, and 25 percent of that is required to be invested in energy efficiency and clean energy. That’s enough to get states excited about the program. In a phone call with ThinkProgress, Jessamine Logan, spokesperson for Maine’s Department of Environmental Protection, touted the “millions and millions” the state had directed to the Efficiency Maine Trust to help homeowners and businesses save money by increasing efficiency. She praised RGGI’s flexibility, saying it “allows states to implement market-based reduction programs while still creating economic benefits and jobs.” While opposition to the new EPA regulations has focused on lost jobs and higher consumer energy bills, RGGI, Inc. touts $1.3 billion in energy bill savings, and 16,000 job years created in the region.

Even Maine Governor Paul LePage, no friend of clean energy, has tried to use the money RGGI brings in for his own priorities. He attempted unsuccessfully in 2013 to divert more money to lowering electricity bills, instead of efficiency, despite the fact that Maine’s electric bills are the lowest in New England.

They’ve seen that we can do this in a cost-effective way, that we don’t have to choose between economy and environment

Revenues are likely to rise, since the relatively high cap that was set in 2005 didn’t predict the recession or natural gas boom that lowered carbon emissions significantly. That meant carbon permits were cheap, and that RGGI didn’t have as much of an impact on emissions as it could have. But a new, lower cap that took effect this year should begin to address those issues, and the next quarterly auction, which occurs this week, is likely to confirm that permits are more in-demand than ever.

And while the details on how EPA limits on carbon will compare with RGGI’s aren’t totally clear yet, states seem confident they will have to take little action, or maybe even no action beyond their RGGI commitments. Kelly Speakes-Backman, a member of RGGI, Inc’s board of directors, told ThinkProgress she was “thrilled” that the EPA recognized how useful regional compacts like RGGI were in cutting greenhouse gases.

“We’re pretty confident we’re going to be in good shape as a region,” she said. “They’ve seen that we can do this in a cost-effective way, that we don’t have to choose between economy and environment, that we can have both and do long-term good.”

Though Speakes-Backman said no states had approached directly about joining RGGI, “we’d certainly be open to it,” and RGGI has participated in a variety of public meetings to spread information on how other states could form something similar.

In addition to the possibility that some states could join RGGI is the question of whether New Jersey will re-join. New Jersey was a founding member of RGGI, and remained in the compact until Governor Chris Christie announced the state was pulling out of what he called the “gimmicky” agreement in May 2011. Since then, environmental groups and legislators have fought to get back in.

Pulling out [of RGGI] has slowed emissions reductions.

While an attempt by state lawmakers to put the question of membership to voters showed some promise, hopes are currently focused on the outcome of a lawsuit from Environment New Jersey and the Natural Resources Defense Council. A judge ruled that the administration acted illegally by taking the significant action of leaving RGGI without public input, and now Christie’s Department of Environmental Protection will have to use formal rulemaking procedures to withdraw, including a 60-day public comment period.

State Sen. Bob Smith (D-Middlesex), who supported the resolution to put RGGI to a public vote in New Jersey, thinks that this is the opportunity the legislature has been waiting for. Once withdrawal from RGGI goes through the regulatory process, the legislature will be able to vote to overturn it, he told ThinkProgress. “Pulling out has slowed emissions reductions,” he said. It’s also cost “about 40 million a year in lost revenue, and that’s a conservative estimate.”

With 130 miles of coastline, Smith said, “we’re a state that’s extremely vulnerable to sea level rise and global climate change… if we can’t set an example for the rest of the country, shame on us.”