Report: RGGI model of carbon trading a 'natural fit' for Clean Power Plan compliance

Dive Brief:

The northeast and mid-Atlantic regional approach to reducing greenhouse gas emissions is a “model for compliance” with the federal government's Clean Power Plan, according to a new report from the Acadia Center.
The Regional Greenhouse Gas Initiative is a “natural fit” for the sector, and has helped to push down emissions, reduce electricity prices and boost the region's economy, the analysis showed.
But in a separate report issued earlier this year, Acadia also noted that some changed to the RGGI would be needed to help align it with anticipated federal standards, including extending the regional cap and altering reduction trajectories.

Dive Insight:

Six years of coordination on the Regional Greenhouse Gas Initiative has laid out a blueprint for how states and regions across the United States can comply with the federal government's highly-anticipated Clean Power Plan, according to Acadia.

“The experience of the RGGI states shows that we can reduce emissions while benefiting consumers and boosting economic growth,” Daniel Sosland, Acadia Center president, said in a statement.

Last year emissions fell 5% below the regional cap, the report found, largely thanks to increasing generation from renewables and efficiency improvements. And electricity prices are down 2% since the initiative's start, Acadia noted. Overall, states taking part in the initiative have seen three times the emissions reductions of other states, Acadia said, and 3% additional economic growth.

“Thanks to the success of the RGGI program, states around the country have gained confidence in market-based mechanisms to reduce CO2 emissions,” said Peter Shattuck, Director of Acadia Center’s Clean Energy Initiative. “That confidence has translated into numerous multi-state groups discussing RGGI-like trading programs to comply with the Clean Power Plan.”

Acadia's analysis showed all nine of the participating states’ economies improved, adding jobs since the compact began. And the region as a whole saw $2.76 billion in value added and 28,500 new job years of employment.

But some changes will be needed to keep RGGI states on track once the final CPP is issued, expected to be in August. The RGGI cap will need to be extended until at least 2030 in order to provide additional clarity, Acadia said, corrections to the cap reduction trajectory to deliver necessary long term emissions reductions willd to be made, and cost containment reserve will need to be altered.