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Dale Bryk’s Blog

New report: RGGI is cutting pollution, lowering bills & creating jobs on East Coast

Dale Bryk

Posted February 28, 2011 in Curbing Pollution, Living Sustainably, Moving Beyond Oil, Solving Global Warming

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In a country that can seem crippled by partisan rancor, where we’ve really never had a comprehensive energy plan, it’s nice to see that it is possible to make meaningful progress on some of the most challenging issues of our time. 

A new report released today shows the Regional Greenhouse Gas Initiative works! In its first two years of existence, RGGI and its 10 participating Northeast and Mid-Atlantic states —Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont — are cutting pollution, lowering energy bills for businesses and consumers, and creating jobs. The RGGI states have done this by setting a regional limit on pollution, selling pollution permits to power-plant owners, and investing most of the proceeds in energy efficiency and other clean-energy technologies. Thanks to RGGI, we are sending fewer dollars out of the region to import fossil fuels. Instead, we’re generating regional economic benefits by investing more in local businesses that provide jobs for residents, weatherize our homes, upgrade heating and air-conditioning systems, and provide energy with clean, homegrown American power. 

Because I have mentioned the acronym “RGGI,” a small army of commenters funded by the Koch brothers oil firm (and currently running under the banner of Americans for Prosperity) will undoubtedly chime in here with any number of outrageous, and as this report shows, false claims about RGGI. But the numbers in the report speak for themselves. They show that policies like RGGI, which shift our energy dollars to cleaner, local, job-creating resources, are in residents’ best interests – no matter their political affiliation.

RGGI isn’t perfect. The limits on pollution aren’t stringent enough. And, as critics have noted, some governors have poached funds that would otherwise have lowered energy bills even further. (Though the funds didn’t go where they were intended, they helped stanch cuts in education and healthcare.) Nevertheless, there is no question that the overall program is effective, delivering enormous benefits to the region.

So, some top line results:

Less Pollution: Just as designed, RGGI has helped bring climate change pollution in our region down 30 percent. Yes, the poor economy has also motivated people to cut back on electricity use and low gas prices have played a role in this decrease (allowing power plants that can run on either gas or oil to opt for gas, which emits less climate change pollution, while it’s cheaper.) But RGGI will continue keeping our air clean long after the economy bounces back. It does this by putting a price on pollution, which makes utilities careful about how much of it they create. RGGI’s design requires large fossil-fuel power plants to buy pollution permits—allowing them to emit only a specific amount of pollution—through a quarterly auction. It will then reduce the number of allowances—the amount of pollution these power plants can release into our air—by 10 percent by 2018.

Economic Gains: RGGI’s success isn’t just a win for our atmosphere. What’s most heartening about the initiative is the way it cuts pollution while creating a host of economic gains, largely for the benefit of consumers, unemployed workers, and small businesses. RGGI has generated more than $789 million so far—and invested the vast majority of that money in projects that promote energy efficiency, support renewable energy, create clean-energy jobs and train workers to fill them, and cut energy costs for low- and middle-income households. In fact, 80 percent of the RGGI revenue has gone towards strategic energy programs. More than half has been invested in energy-efficiency programs that deliver $2-4 in consumer energy savings for every dollar put in.

It’s also creating high-paying jobs at rates that surpass dirty sources of energy. The wind & solar industries generate 40 percent more jobs per dollar invested than coal mining, and the average yearly compensation for jobs created at renewable energy facilities is about $75,000. Energy efficiency programs funded by RGGI through December 2010 will create nearly 18,000 job years – that is, the equivalent of 18,000 full-time jobs that last one year (these jobs are created when states invest in good programs and when energy consumers use their savings in their communities).

Thanks to RGGI, energy costs for participating consumers in the region are an average of 15-30 percent lower than they would be without the program, especially at peak times. And RGGI has gone one step further to help lower consumer costs – putting more than $110 million into programs that help low- and middle-income households in the region with their energy bills, both through direct assistance and through programs that weatherize low-income homes. 

What does that mean for the people who live in the 10 participating states? Here’s just a glimpse at what these benefits look like on the ground:In Massachusetts, one RGGI-funded weatherization program has enabled low-income households to save an average of $500 a year on their energy bills by replacing inefficient old furnaces and boilers with economical, high-performance ones.

  • In New York, the RGGI-funded Green Jobs-Green New York program is providing low-interest loans to low-income homeowners and renters for property upgrades. This program can save enough electricity to power nearly 59,000 homes for a year, cut residents energy costs by an estimated $600 million, and support training programs for 6,000 workers.
  • In New Hampshire, RGGI is funding a new building-analyst course at Lakes Region Community College, and five other locations statewide, that establishes a new certification program for energy auditors. Shad Lawton and Jamie Myers are just two recent graduates who have since started a business called NHNRRG, a full-service energy auditing and building performance contractor in Lisbon. Their company has already conducted 140 energy audits on 80 building retrofit projects.
  • In New Jersey, the Clean Energy Solutions Capital Investment Loan/Grant Program is providing zero-interest loans and grants for large-scale energy efficiency and renewable energy projects. Twelve projects have received nearly $30 million for projects that will create enough electricity to meet the annual electricity needs of more than 19,600 New Jersey homes. And they’ll save 1.7 million tons of climate-change pollution over their lifetimes – the equivalent of taking more than 325,000 cars off the road. RGGI is also helping the state’s offshore wind industry get up and spinning by making financial assistance and tax credits available to businesses involved in projects that are in development. This will not only create direct jobs, but will help attract new, supporting industries to the sate.
  • In Maine, the largest industrial manufacturer in Waldo County – GAC Chemical in Searsport – received a $314,000 grant to implement a variety of innovative measures to recycle steam from the manufacturing process to heat water. This is projected to save enough fuel to heat 247 homes a year, and enough electricity to power 35 homes annually. This RGGI-funded project will help keep the 60 jobs at GAC in the county, as well as make the company more competitive with others out-of-state.
  • In Maryland, some public housing residents in St. Mary’s County saw their heating and cooling costs cut almost in half, through the installation of energy-efficient heat pumps.

RGGI is the product of many years of hard work by a group of state officials and a wide array of business, consumer and environmental stakeholders. Launched by former New York Republican Governor Pataki, it has enjoyed broad bipartisan support from the start. Now out-of-state oil interests are funding a campaign to pressure Republicans in New Hampshire, Maine and New Jersey to abandon the clean energy future – and all the benefits that come with it – that RGGI has helped these states realize. But in these tough economic times, we need RGGI jobs and energy savings more than ever. Governors of these states should stand up for the interests of their residents – not big oil – and keep RGGI delivering for the people. 

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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