Cumulative proceeds from all RGGI CO2 allowance auctions exceed $2.2 billion dollars for reinvestment in strategic programs, including energy efficiency, renewable energy, direct bill assistance, and GHG abatement programs.
By Ramona du Houx
The Regional Greenhouse Gas Initiative (RGGI), the nation’s first market-based regulatory program to reduce greenhouse gas pollution, announced the results of RGGI’s 29th August, 2015 auction of carbon dioxide (CO2) allowances. Maine earned $5,597,684.96.
RGGI is a cooperative market-based effort to reduce climate-changing carbon pollution from power plants and spur investments in energy efficiency and clean energy. Allowance auctions have taken place quarterly since September 2008, generating $70,402,611.85 million in total for Maine.
"Not only has RGGI helped clean up and diversify Maine's energy mix and make us more energy efficient, it demonstrates the potential to make even more positive gains when done right," said Former State Senator and current Portland City Councilor Jon Hinck.
Maine joined RGGI in 2007, when the Legislature voted nearly unanimously to participate. Hinck was a major proponent of the program and helped the Baldacci administration sail through the lawmaking process. The program took effect in 2009 and is on schedule to reduce global warming pollution from power plants by half of 2005 levels by 2020. Carbon emissions in the nine participating RGGI states have dropped by about a third since 2009.
“This latest auction is Maine’s smart, consumer-oriented approach to this climate program in action. Most of this RGGI revenue will go straight to energy-saving programs at Efficiency Maine to help businesses lower energy costs and homeowners save on heating bills,” said Dylan Voorhees, Clean Energy Director, of the Natural Resources Council of Maine.
Together the participating states add up to the seventh largest source of global warming pollution in the world. More than 30 percent of this pollution comes from dirty power plants. RGGI helps to “cap” that as each power plant has to acquire enough permits to cover its emissions or face heavy fines. They can also “trade” or sell them among themselves.
The Efficiency Maine Trust determines how the revenue generated from the sale of credits can be best used for energy efficiency programs and carbon savings. By law, Maine invests RGGI revenue into energy efficiency programs and investments. From 2009 - 20011 Maine invested $27 million from its sale of carbon credits in energy efficiency projects, generating $80 million in reduced electric bills for residents and businesses. This activity added a total of $92 million to Maine’s economy, including more than 900 jobs, according to the NRDCM.
Since 2013 Efficiency Maine has been allocating 35 percent of its revenues from RGGI to programs that will reduce home heating demand, lower costs and decrease greenhouse gas emissions.
“Out of the $2.5 million, nearly $1 million will go to the Home Energy Savings Program, enough to help another 1,000 homeowners invest in insulation, heat pumps and other energy-saving improvements. RGGI is also putting Maine in great competitive position to benefit from the President’s Clean Energy Plan to cut carbon from power plants, so it’s win-win-win,” added Voorhees.
President Obama’s Clean Energy Plan would limit carbon pollution from all power plants, set improved energy efficiency standards for appliances and buildings, boost clean renewable energy, and help Americans, businesses, and communities deal with the effects of climate change.
RGGI provides numerous economic benefits by stimulating economic investment and supporting energy efficiency and renewable energy technologies— and their related businesses.
Alternative energy jobs on the rise with good pay—
RGGI has reduced pollution while measurably strengthening Maine’s economy by reducing energy costs and creating jobs. The cap-n-trade program also creates incentives for energy efficiency and clean, renewable power.
Alternative energy is among the industries in Maine that show the most potential for job growth, according to a state report commissioned by the Maine Technology Institute in 2013 to identify fast-growing, technology-intensive industries that could yield significant economic growth.
Businesses that work in alternative energy are a part of the state’s fastest-growing sectors according to the report. The sector posted job gains in Maine of 11.9 percent from 2007 to 2012, and is predicted to grow by 4.7 percent through 2022, beating a forecasted U.S. growth rate of 2.3 percent. It also has high average wages at $74,091. That compares with Maine’s average private-sector wage of $38,090.
RGGI is providing significant benefits to Maine homeowners and businesses by supporting cost-effective weatherization and efficiency improvements while being an effective solution to help address global warming. The program is one of the most important steps in Maine’s Climate Action Plan, developed under the Baldacci administration to reduce greenhouse gas emissions and to create an energy independent Maine. It also creates incentives for energy efficiency and clean, renewable power.
RGGI has generated $2.2 billion in benefits for the nine U.S. states participating. It also created more than 14,000 new jobs in the Northeast and saved consumers $460 million in lower electric bills over the past three years, according to a report released July 13, 2015 by Analysis Group, a Boston-based consulting company.
“This (29th) auction comes directly on the heels of several independent reports which have reinforced RGGI’s benefits to consumers, the economy, and our environment,” said Katie Dykes, Deputy Commissioner for Energy of the Connecticut Department of Energy and Environmental Protection, and Chair of the RGGI, Inc. Board of Directors. “States across the country are preparing for the implementation of EPA’s Clean Power Plan. With a seven year track record the RGGI states have demonstrated that reducing pollution is fully compatible with economic growth and providing reliable power.”
The six-year-old carbon trading market, the first in the U.S., serves as a model for other states, which all must now regulate emissions to meet new rules from the U.S. Environmental Protection Agency. Pennsylvania and Virginia officials have discussed joining RGGI.
“There are a lot of states that are looking carefully at doing the same thing,” said Paul Hibbard, an Analysis Group vice-president and co-author of the study. “It will be hard for states to not realize that from the standpoint of economic efficiency, that’s the way to go.”
The Northeast program was overhauled last year. After reducing the amount of allowances available by 45 percent, prices increased, and so did the incentive to cut emissions.
Recently, Stanford researchers have a developed 50-state roadmap to a clean, renewable energy future, proving that Maine can become energy independent. The study, published in the Energy and Environmental Sciences, showcases how each state can replace fossil fuels by tapping into renewable resources available in each state, such as wind, solar, geothermal, hydroelectric, and in some states— like Maine— tidal and off-shore wind.