I’m not big on parroting press releases, but I’m going to make an exception for RGGI, the northeast’s carbon cap-and-trade program. RGGI is quietly demonstrating that carbon markets can work wonderfully. So it’s too bad no one seems to be paying attention any longer.
Last week, RGGI’s most recent auction netted $83 million, for a lifetime total of nearly $861 million. The vast majority of that money is channeled into energy efficiency and job creation with immediate and tangible results.
Maine is investing a portion of its RGGI proceeds to implement large-scale energy efficiency projects in commercial and industrial facilities… the project will enable the Dixfield sawmill to produce 25 percent of its electricity on site, saving enough money to sustain 235 jobs. Moose River Lumber anticipates adding at least three jobs while retaining the 66 full-time and 5 part-time workers currently employed.
Maryland is investing RGGI proceeds to help the state’s farmers control their energy budgets… The program… will save the farmers a collective total of more than $15 million in energy costs over the lifetime of the projects.
In New York, RGGI proceeds are a catalyst, leveraging federal, state and private investments to revitalize local economies. For example, the Village of Patchogue on Long Island used $27,000 in RGGI proceeds to identify energy efficiency opportunities as part of a proposal to upgrade its waste water treatment plant. This analysis made Patchogue eligible for $11.4 million in federal and state funds, which it received for its proposed upgrade.
There’s much more in a new report “Investment of Proceeds from RGGI CO2 Allowances,” which thoroughly documents the program’s investments. It’s encouraging stuff. Or it would be, if there was any serious conversation afoot to expand RGGI geographically or sectorally.
Some critics accuse RGGI of falling short because its allowance prices are low—just $1.89 for a ton of CO2 as of last week’s auction. There’s a fair, if limited, point to make on that score. It’s true that RGGI’s carbon budget is presently generous enough that during this recessionary period it’s not creating a meaningful reduction of carbon emissions beyond what would have happened anyway.
But it’s also worth remembering two things. First, one of the virtues of market pricing for carbon is that the price eases off when times are tough, just as it ratchets up when demand for carbon is high. That’s a smart feature for the climate and the economy. Second, even with carbon prices so low that they’re virtually undetectable, the northeast states—and their residents and businesses—are reaping important dividends in job growth and energy cost savings by investing in efficiency. That’s a win no matter how you slice it.