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Northeastern States Pledge Steep Cuts in Carbon Dioxide Emissions

October 5, 2017

Nine states, stretching from the Mid-Atlantic to Maine, have agreed to more stringent reductions in greenhouse-gas emissions by the end of the next decade.

Nine states, stretching from the Mid-Atlantic to Maine, have agreed to impose more stringent reductions in greenhouse-gas emissions by the end of the next decade.

Under the August 23 agreement, which was open for public comments until September 25, members of the Regional Greenhouse Gas Initiative (RGGI) promise to curb their carbon emissions collectively by 30 percent between 2020 and 2030. This represents a slightly deeper cut in emissions than RGGI’s current mandate of 2.5 percent per year. A separate provision would mandate even steeper reductions if they aren’t too costly for the participating states.

Initiated in 2009, RGGI is a regional compact intended to combat climate change through a cap-and-trade system limiting greenhouse-gas emissions from power plants. RGGI’s member states are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont. RGGI initially had ten members. New Jersey Gov. Chris Christie withdrew his state from the compact in 2010.

Katie Dykes, a Connecticut regulator who serves as RGGI’s chair, expressed approval of the compromise agreement, saying in a statement it will “secure significant carbon reductions at a reasonable price on into the next decade.”

No evidence exists showing RGGI is having any effect on the climate.

Objections from Maryland

Massachusetts and a host of environmental groups had originally pushed for an annual reduction of 5 percent, or 50 percent over the decade, but Gov. Larry Hogan of Maryland refused to go along with the plan, arguing it would cost ratepayers too much.

After Maryland threatened to withdraw from RGGI, the group struck a deal for a more modest reduction.

The auctions in which energy producers bid against each other for the right to emit greenhouse gases have added much to member states’ coffers. Since 2009, RGGI auctions have raised $2.7 billion, with the money being funneled to assorted “clean energy” programs.

In Connecticut, the auctions generated $155 million in revenue through 2015, with the lion’s share distributed to the Connecticut Energy Efficiency Fund, the Connecticut Municipal Energy Cooperative, the Town of Wallingford’s Electric Division, and the Connecticut Green Bank. Under the new RGGI agreement, Connecticut expects to take in an additional $40 million through auctions between now and 2030.

Responding to Trump Policies

Early in his first term, President Barack Obama sought to create an RGGI-like nationwide cap-and-trade system, but the effort failed to win congressional approval. Subsequently, the Obama administration attempted to force comparable carbon dioxide emission reductions through regulations, in particular the Environmental Protection Agency’s Clean Power Plan, which imposed strict emission limits on power plants, especially those powered by coal.

In response to President Donald Trump’s efforts to roll back Obama’s climate policies, including Trump’s decision to review and possibly rescinded the Clean Power Plan earlier this year and his June 1 commitment to pull the United States out of the Paris climate agreement, RGGI-participating states decided to ramp up their greenhouse gas reductions unilaterally.

‘A Regressive Tax’

The Caesar Rodney Institute (CRI) has been studying RGGI for several years and has found the initiative punishes the poor, says CRI President Chuck Daniel.

“What’s clear based on the data is that the cost of RGGI has become a regressive tax hitting low-wage residents of Delaware and those on fixed incomes,” Daniel said. “On average, people in Delaware are making less today than they were several years ago.

“The result of RGGI has been a net negative for most of the people in our state,” said Daniel.

Data collected by the U.S. Energy Information Administration shows Delaware residents in 2015 paid 7.3 percent more per kilowatt hour for electricity than the average for the nation as a whole, and residents across the RGGI paid 42.4 percent more for electricity than the national average. Electricity rates in every RGGI state were above the national average.

Natural Gas Expansion

James Taylor, president of the Spark of Freedom Foundation, says the best way to cut carbon dioxide emissions is to expand the use of natural gas, not restrain fossil fuel use.

“U.S. carbon dioxide emissions have declined 14 percent since 2005, with the primary reason being the growing share of natural gas in our nation’s energy mix,” Taylor said. “It is ironic two of the states in RGGI—Maryland and New York—have imposed fracking bans while simultaneously calling for more carbon dioxide reductions.

“If policymakers in the Northeast desire to continue and accelerate CO2 emissions cuts, they should encourage, rather than oppose, more natural gas production,” said Taylor.

Bonner R. Cohen, Ph.D. (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research.

Author
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
bcohen@nationalcenter.org

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