Full Title: The Economic Impacts of the Regional Greenhouse Gas Initiative on Ten Northeast and Mid-Atlantic States: Review of the Use of RGGI Auction Proceeds from the First Three-Year Compliance Period
Author(s): Paul J. Hibbard Susan F. Tierney Andrea M. Okie Pavel G. Darling
Publisher(s): Analysis Group
Publication Date: November 1, 2011
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Description (excerpt):
In 2009, ten Northeastern and Mid-Atlantic states began the Regional Greenhouse Gas Initiative (known as RGGI), the country’s first market-based program to reduce emissions of carbon dioxide (CO2) from power plants. Understanding the program’s performance and outcomes is important given that RGGI states account for one-sixth of the population in the US and one-fifth of the nation’s gross domestic product. Through the development of the RGGI program, these states have gained first-mover policy experience and have collaborated to merge a common policy into well-functioning electricity markets. Insights and observations gleaned from an analysis of the program’s performance will be valuable in evaluating past policy decisions and future policy recommendations.
RGGI has now been operating for nearly three years. The rights to emit CO2 have been auctioned off. Power plant owners have spent roughly $912 million to buy CO2 allowances. Consumers now pay regional electricity rates that reflect a price on CO2 emissions. These emissions have gone down, affected by both RGGI and larger economic conditions. States have received, programmed, and disbursed virtually all the $912 million in allowance proceeds back into the economy in myriad ways – on energy efficiency measures, community-based renewable power projects, assistance to low- income customers to help pay their electricity bills, education and job training programs, and even contributions to a state’s general fund. Figure ES1 shows RGGI proceeds by state and region.