Published on November 23rd, 2012 | by Silvio Marcacci3
RGGI Emission Auctions Create $617 Million In Clean Economy Investments
Fast on the heels of California’s successful first emissions auction, the Regional Greenhouse Gas Initiative’s (RGGI) 2011 Investment Report finds CO2 trading systems reducing emissions while powering a clean energy economy.
The report states that auction proceeds have created $617 million in total investment for energy efficiency, renewable generation, utility ratepayer assistance, and green collar job training programs across the nine-state system.
RGGI is the nation’s first operational greenhouse gas emissions reduction program, and it applies to power sector emissions. The system held its first emissions auction in September 2008, and has sold more than 450 million CO2 allowances in 16 quarterly auctions across a price range of $3.51 to $1.86.
Investments Across The Clean Energy Economy
Auction proceeds have generated a wide range of environmental and economic benefits. RGGI estimates the overall investments will return $1.3 billion in energy bill savings, offset 27 million megawatt-hours (MWh) of electricity generation, and prevent 12 million tons of carbon emissions. In addition, an independent 2011 study found 16,000 new job-years created by the program.
Energy Efficiency And Utility Bill Assistance
Energy efficiency programs are the largest recipients of RGGI investments. 56 percent of 2011 investments, and 66 percent of cumulative investment to date has gone toward efficiency upgrades. Beyond lowering energy demand and preventing emissions, this funding is creating a robust energy efficiency economy across the region – six RGGI states were recently ranked among the top ten energy-efficiency markets nationwide by the American Council for an Energy Efficient Economy.
RGGI proceeds also directly help consumers manage their utility costs. 25 percent of 2011 investments, and 17 percent of cumulative investments to date have funded direct utility bill assistance programs to the tune of $107 million in bill credits for 2.3 million recipients. These credits often target low-income households and typically appear as a credit on the consumer utility bills.
Abatement, Adaptation, Renewables
Allowance revenue is also being directed toward emissions abatement and climate change adaptation. Nine percent of 2011 investments and five percent of cumulative investments have gone toward advanced transportation, industry emissions reduction, sustainable farming and land-use, and severe weather and sea level rise planning. Overall investment in this sector will prevent 2.3 million tons of CO2 pollution and save $690,000 in electricity costs.
Last but not least, auction revenue is making the region’s electricity portfolio cleaner by funding new renewable energy generation. Five percent of both 2011 investments and cumulative investments to date have paid for new clean energy capacity through grants or low-interest financing for on-site generation at homes, businesses, schools, and government facilities.
Boosting Economy By Cutting Emissions
Allocation of RGGI auction revenue is up to each individual state in order to address each state’s policy needs and circumstances. For instance, Maine and New Hampshire both push over 90 percent of their revenue toward energy efficiency programs, while Maryland and Connecticut direct their revenue into clean energy investment funds.
It’s hard to dismiss the overall impact RGGI’s auctions have had on the regional economy and environment. By reducing emissions, boosting renewables, and cutting energy use, the system has helped speed the transition to clean energy future.
“RGGI investments have turned a triple-play that delivers significant economic, environmental, and consumer benefits to businesses and families in the region,” said Collin O’Mara, Secretary of Delaware’s Department of Natural Resources.
Top Image Credit: Carbon tax image via Shutterstock