Full Title: The Economic Impacts of the Regional Greenhouse Gas Initiative on Nine Northeast and Mid-Atlantic States
Author(s): Paul J. Hibbard, Andrea M. Okie, Susan F. Tierney, and Pavel G. Darling
Publisher(s): Analysis Group
Publication Date: July 1, 2015
Full Text: Download Resource
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 existing and new power plants.1 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 their development and implementation of the RGGI program, these states have gained first-mover policy experience and have collaborated to form a multi-state emission-control policy that has reduced CO2 emissions and operated seamlessly with well-functioning and reliable 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, and may be relevant to other states and regions as they develop their own plans to reduce CO2 emissions in response to the Environmental Protection Agency’s (“EPA’s”) proposed Clean Power Plan.
This Report analyzes the economic impacts of RGGI’s most recent three years, covering the years 2012 through 2014. This analysis follows on our prior November 2011 Report (hereafter “AG 2011 Report”) that assessed the economic impacts of RGGI’s first three years (2009-2011).2 Since the time of our last economic review, the electric industry has experienced changes in power plant economics, emission-control requirements, and wholesale market structures in the RGGI region. In addition, the RGGI states completed a comprehensive program review during 2012, and modified elements of the program including, most importantly, adopting a significantly lower overall cap on CO2 emissions in the RGGI region.