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Cap And Trade

Published on April 22nd, 2012 | by Stephen Lacey


States in NE Cap & Trade Program Have Increased GDP at Twice the Rate of Other States, Cut CO2 20% Faster

April 22nd, 2012 by  


This article was originally published on Climate Progress and has been reposted with permission.

Northeastern states participating in America’s first carbon cap and trade program have outperformed the rest of the country in GDP growth and reduction in global warming pollution.

That’s according to a new report from Environment New Jersey, which examined emissions data and economic growth indicators from 2000 to 2009.

The Regional Greenhouse Gas Initiative (RGGI) is a nine-state cap-and-trade market designed to reduce emissions in the utility sector 10% by 2018. A recent independent analysis showed that the program has already created $1.6 billion in economic value and set the stage for $1.1 billion in ratepayer savings through investments in efficiency and renewable energy.

This latest report shows that states under the RGGI program saw a 20% greater reduction in per-capita carbon emissions than non-RGGI states — all while growing per-capita GDP at double the rate of the rest of the country.

It is, however, very difficult to pinpoint the exact impact that RGGI had on these emissions reductions. While the program has been in the works since the early 2000′s, it was only implemented in 2008. The combination of increased penetrations of natural gas and the economic downturn likely had the biggest roles to play in the emissions dip.

But some officials in the region believe that RGGI did play a part. SolveClimate News reported on reactions to the news:

“It’s very clear that emissions have decreased in the Northeast. I think it’s largely because of low natural gas prices, plus the effects of RGGI on top of that,” said Bob Teetz, vice president of environmental services at National Grid USA, a Waltham, Mass.-based electric and gas company. The utility operates 4,000 megawatts of natural gas power plants in Long Island, N.Y.

“All of these efforts are bearing fruit,” Ken Kimmell, commissioner of the Massachusetts Department of Environmental Protection, told InsideClimate News. “We very much expect that that progress will continue,” as the economy gains strength, he said.

While we can’t say exactly what role RGGI played in these drops, we can make many other observations with certainty: The program has helped stimulate more efficiency and renewable energy, it has helped local businesses grow, it has added enormous economic value to the region, and it has not driven up electric rates.

Let’s compare real-world experience to the outlandish claims made by opponents of the program.

The Koch-backed Americans for Prosperity actually claimed that RGGI would drive rates up in New Jersey by 90%. And New Jersey Governor Chris Christie pulled his state out of the program, calling it a “gimmicky tax.” According to program administrators, proceeds from carbon credit auctions brought $29 million to New Jersey in 2010, leveraging $3 to $4 in benefitsfor every dollar invested.

Opponents who claim cap and trade is bad for the economy simply don’t have a leg to stand on.

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About the Author

is an editor at Greentech Media. Formerly, he was a reporter/blogger for Climate Progress, where he wrote about clean energy policy, technologies, and finance. Before joining CP, he was an editor/producer with RenewableEnergyWorld.com. He received his B.A. in journalism from Franklin Pierce University.

  • Scott Wesley

    Here it actually states that California is the first to adopt Cap and


  • Scott Wesley

    That is an old report, cap and trade is only in California now…and carbon monitoring has just begun. The rest of the states found that there was too much inconsistency in monitoring the carbon emissions. This should not be posted, as it is outdated!

    • C&T only in CA now? Not sure what you mean — RGGI is still going strong.
      This report is from April 2012, not old..

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