The Regional Greenhouse Gas Initiative (RGGI) has produced a total of $1.6 billion in economic value to the ten RGGI member states between 2009 and 2011, according to an Analysis Group report. By implementing a cap-and-trade program for electricity sector greenhouse gas emissions, RGGI reduced fossil fuel use for electricity and heating, keeping an extra $765 million in fuel expenditures within the region and creating 16,000 new “job years” in RGGI member states. "RGGI generates greater economic growth in every one of the 10 states that participate in RGGI than would occur without a carbon price," said Susan Tierney, a managing principal of the Analysis Group and a report co-author (ClimateWire story – November 15, 2011 ).
Since 2009, power plant owners have bought allowances at auction to cover their carbon dioxide (CO2) emissions. The proceeds of the sales have cumulatively equaled approximately $912 million, and RGGI states have invested this money into their local economies. The Analysis Group report lists energy efficiency measures, community-based renewable power projects, assistance to low-income customers, education and job training programs, and contributions to state general funds as the various recipients of the $912 million in revenue.
The report states that consumers will experience electricity bill increases in the short term. Over time, however, households, businesses, government users, and others will enjoy a net gain of $1.1 billion between 2009 and 2021 due to investments in energy efficiency programs that reduce overall electricity consumption. Power plant owners are expected to lose $1.6 billion in revenue on a net present value basis between 2009 and 2021, and RGGI will afford a competitive advantage to power plants with lower emissions.
New Jersey, which in May 2011 announced its intention to leave RGGI by the end of the year, received approximately $118 million (around 13 percent) in proceeds from allowance sales and benefited from $151 million in economic value added between 2009 and 2011. Approximately $75 million was placed into the state’s general fund, while around $27 million was devoted to renewable energy investment.
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