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Cap-and-Trade for Cars Is Coming to the Northeast

“This is a great step forward for a region that desperately needs a more modern transportation system,” said Jordan Stutt, the director of carbon programs at the Acadia Center, a Boston-based environmental group. “I think this is a reflection of the kind of process we want to see more of when it comes to climate and economic policy.”

Others pointed to the additional benefits associated with cutting carbon emissions from cars and trucks, including cuts to other pollutants that are harmful to public health.

Read the full article from Scientific American here.

MA Legislature Takes Measured Step Forward on Clean Energy

Further Action Will Be Required to Address New and Unresolved Issues

BOSTON – Yesterday evening, a conference committee of the Massachusetts House and Senate released a compromise clean energy bill, H.4857, which is expected to pass both chambers of the legislature today. The bill enacts several key policies for supporting clean energy in the Commonwealth and represents a significant accomplishment by the legislature, but it falls short in other areas that are equally necessary for swift progress toward clean energy goals.

“The compromise bill takes measured steps forward that will enhance Massachusetts’ ability to meet its climate commitments, but future progress will be necessary to ensure that programs are administered equitably and clean energy resources are prioritized,” said Deborah Donovan, Massachusetts Director for Acadia Center. “This bill continues to advance renewables, offshore wind, and energy storage, and these technologies are poised to revolutionize the Commonwealth’s and the region’s electricity system and eliminate the need for expensive bailouts for aging fossil plants or new fossil fuel infrastructure. However, details of the legislation also raise concerns.”

The bill includes an increase in renewable energy requirements from 25% to 35% by 2030, provides for a ramp up in energy storage, expands the scope of energy efficiency programs to promote strategic electrification and renewable energy technologies, removes unfair charges on new solar customers, allows solicitations of local clean energy resources to replace infrastructure investments, and could double the Commonwealth’s offshore wind procurements to 3,200 megawatts by 2035. However, the bill does not include significant measures previously passed by the Massachusetts Senate to advance solar equity or implement carbon pricing. In addition, the new clean peak standard could potentially incentivize burning trash to generate electricity, which damages public health.

Similarly, other provisions mark steps both forward and sideways. “Today’s bill helps address one major issue for the future of local solar generation in Massachusetts by eliminating the unfair and inefficient solar charges introduced by Eversource earlier this year, but it leaves several important questions unanswered for solar,” said Mark LeBel, staff attorney at Acadia Center. “It risks leaving out low-income residents and other groups requiring additional focus by failing to increase the net metering caps and implement a new requirement to distribute the benefits of solar incentive programs equitably. Acadia Center will closely monitor the types of projects built under the new solar incentive program and work to ensure that the program benefits all communities in the Commonwealth.”

“Acadia Center has long called for expanded use of clean technologies such as electric heat pumps in Massachusetts’ energy efficiency programs to give residents greater ability to move away from expensive oil, and with the Legislature’s action on this bill, it advances strategic electrification and renewable resources,” said Amy Boyd, senior attorney at Acadia Center and member of the Energy Efficiency Advisory Council.  “Acadia Center is also very pleased to see the full legislature pass the House’s provision requiring the electric companies to identify reliability issues and solicit local, clean energy resources to fill those needs, rather than spending more and more on infrastructure.”

“Massachusetts’ continued progress in the electric sector provides a blueprint for success in the transportation sector, where we are falling behind,” said Jordan Stutt, carbon programs director at Acadia Center. “Our outdated transportation system now accounts for twice as much CO2 as any other sector, and we are in desperate need of new investments to modernize and decarbonize how we get around. A price signal to reduce transportation sector carbon emissions, as called for in a bill that the Senate passed, would set us on the right track to a cleaner, modern and more accessible network of transportation options.”


Media Contacts:

Deborah Donovan, Massachusetts Director & Senior Policy Analyst
ddonovan@acadiacenter.org, 617-742-0054 x103

Mark LeBel, Staff Attorney
mlebel@acadiacenter.org, 617-742-0054 x104

Connecticut’s Emissions Reduction Opportunity

Connecticut’s transportation system – the network of highways, trains, public transit, and walking and biking corridors – is vital to the state’s economy as it facilitates movement of goods and connects people to jobs and opportunities.  However, the system needs critical updates to continue to support the state.  

At the same time, the transportation system is the largest source (41%) of Connecticut’s greenhouse gas emissions (“GHGs”), which must be reduced for the state to meet its climate commitments.   

These two challenges of improving the transportation system and reducing GHGs can be addressed by applying a policy model that has been successfully used to clean up electricity generation and raise funds through emissions reductions.  

The Cap and Invest Model

The Regional Greenhouse Gas Initiative (“RGGI”) established in 2009 put a price on carbon emissions from electricity generation and used the proceeds to invest in renewable energy and energy efficiency. Since the program began: 

Connecticut was a founding member of this regional cap-and-invest program, and as of 2017 had spent about $201 million of RGGI proceeds on clean energy projects. As of 2014, the latest figures available, RGGI expenditures added about $245 million to Connecticut’s economy, created 2,200 job-years, and helped avoid $13 million in health impacts.2

A similar regional cap-and-invest program could be applied to transportation to raise revenues, reduce emissions, and stimulate the economy.  To better understand this opportunity, Acadia Center looked at a scenario that reduced Connecticut’s transportation GHGs 4%, or nearly 4 million metric tons of CO2, by 2030 compared to the baseline scenario from EnergyVision 2030.3 This level of emissions reductions is aligned with Georgetown Climate Center’s estimate for market-based policy compared to existing Federal policies.4

Revenue and Reinvestment Strategies

Based on a $15/ton carbon price,5 the state could generate about $2.5 billion in revenue between 2019-2030 by capping emissions. Connecticut could allocate these funds in many ways to improve transportation and reduce GHGs. For example:

 

To provide an example of the revenue that could be generated by a cap-and-invest program, Acadia Center examined a 50/50 portfolio, with half of the program proceeds going to maintenance of infrastructure and half going to specific GHG reduction measures (Table 1). This portfolio is only provided as a point of reference, not a recommendation, and it does not include the full suite of activities that could be funded with proceeds.

Table 1: Simplified Reinvestment Portfolio for Connecticut’s Proceeds from Transportation Climate Policy

Simplified Reinvestment Portfolio

Benefits from Reinvestment

By examining the benefits of similar transportation expenditures in Connecticut and the U.S., Acadia Center has estimated some of the economic activity and other monetary benefits a 50/50 portfolio could generate (Figure 1). The total benefits from both tracks of spending are estimated at:

 

Figure 1: Increased Economic Activity and Other Benefits from Reinvesting Transportation Climate Policy Revenues8

Benefits of reinvesting TCI revenues


For more information:

Emily Lewis, Policy Analyst
elewis@acadiacenter.org, 860-246-7121 x207


1See: Analysis Group’s The Economic Impacts of the Regional Greenhouse Gas Initiative on Nine Northeast and Mid-Atlantic States: Review of RGGI’s Third Three-Year Compliance Period (2015-2017)

2See: Acadia Center’s Clean Energy Investments at Stake in Connecticut

3See Acadia Center’s EnergyVision 2030 Technical Appendix for modeling details. The Baseline scenario includes existing EPA/DOT fuel efficiency standards for medium and heavy-duty vehicles, as well as the existing Corporate Average Fuel Economy standards through 2025.

4See: Georgetown Climate Center’s  Technical Appendix Emission Reduction Strategy Analysis from Reducing Greenhouse Gas Emissions from Transportation: Opportunities in the Northeast and Mid-Atlantic

5Georgetown Climate Center’s analysis estimates a carbon price for market-based transportation climate policy between $5-$30/ton CO2.

6See: Economic Analysis Reports for the 1-84 Viaduct, the I-84/Route 8 Mixmaster in Waterbury, and the New Haven Rail Line, available in the November 2015 Briefing for the Transportation Finance Panel, and NREL’s National Economic Value Assessment of Plug-In Electric Vehicles.

7See: EPA’s Social Cost of Carbon methodology

8Other benefits calculated as present value. Output and income are cumulative totals over the project lifespans.

N.Y. grid operator floats carbon price

The document is meant to get power-sector stakeholders down to brass tacks on how, in practical terms, New York can put a price on carbon if the U.S. government won’t.

Parties are digesting the proposal as they prepare for a May 14 meeting. The minute details will be heavily debated, but so far, many just seem glad the process is underway.

“NYISO’s draft proposal for a carbon adder would send an important and overdue price signal to the market necessary for New York to achieve its ambitious carbon reduction policies in place to meet long-term greenhouse gas reduction targets,” said Deborah Donovan, Massachusetts director for the Acadia Center, an advocacy organization focused on clean-energy issues in the Northeast.

Read the full article from E&E Energywire here (article may be behind paywall).

After Carbon Tax Fails in Washington, Focus Turns to 9 Other States

The proliferation of bills comes on the heels of President Trump’s decision to withdraw the U.S. from the Paris Climate Agreement last June. Following the announcement, many states and municipalities independently pledged to adhere to the agreement’s goals. “The current administration has no interest in advancing carbon policy,” says Jordan Stutt, a policy analyst at Acadia Center, a clean energy advocacy group. “State legislators are realizing they have the opportunity to craft carbon policy.”

Read the full article from Governing here.

Viewpoint: Need for Mass. clean transportation policy

When the world convened recently in Bonn, Germany, for the annual United Nations climate-change negotiations, there was a particular focus on the role of U.S. states, cities and businesses in reducing carbon pollution. Massachusetts, along with six other states and the District of Columbia, announced a regional pledge to work together with stakeholders to “create the clean transportation system that the region needs to meet today’s and tomorrow’s challenges.”

Cleaning up and modernizing the transportation system will be a major undertaking, but it doesn’t have to be a painful one. Massachusetts has demonstrated the ability to address similar challenges through innovative policies and regional collaboration that reduce emissions while improving the economy. The commonwealth played a key role in launching the Regional Greenhouse Gas Initiative (RGGI), the nation’s first multi-state program to reduce carbon pollution from power plants.

While RGGI has helped Massachusetts make great strides in reducing electric sector pollution, the transportation sector still emits around the same amount of carbon as it did in 1990. Every year, pollution from the transportation sector causes asthma attacks and leads to preventable deaths, taking a massive financial and human toll on Bay State residents. Making matters worse, low-income communities and communities of color face a disproportionate share of the impacts from this pollution.

We can’t transform our transportation system overnight, but we can do more to invest and plan for a better future. From electric vehicle infrastructure to smart growth and improved public transit, we have an array of options to reduce pollution and increase transportation access while benefiting the economy. A RGGI-like program could go a long way to accelerate the adoption of these transportation solutions.

The RGGI cap-and-invest model has helped cut emissions from power plants in the region by 40 percent since 2008, while driving $2.8 billion in regional economic growth and creating nearly 30,000 jobs. Acadia Center analysis shows that RGGI has helped the region outpace the rest of the country in both emissions reductions and economic growth. In Massachusetts alone, these RGGI-driven emissions reductions have resulted in $798 million in avoided health costs.

Recent analysis conducted for the Transportation and Climate Initiative (TCI) shows that regional carbon policy — like a cap-and-invest program — would add billions of dollars to the regional economy, reduce harmful pollution and generate revenue for reinvestment in transportation improvements, accelerating the transition to a cleaner, more efficient, more accessible system. A recent report from Ceres and M.J. Bradley and Associates found that the benefits of investments in electric vehicle infrastructure outweigh the costs by a margin of three to one.

Expanding clean transportation options should be a top priority for our economy. Businesses want 21st century cities with transportation systems to match, and they’ve proven to invest resources and create jobs in areas that have them. To keep Massachusetts’ economy thriving, we must embrace clean transportation. Market-based solutions like the RGGI model offer a promising path forward, and we urge Governor Baker and his peers across the region to act swiftly in establishing such a program.

Mindy Lubber is president and CEO of Ceres, a sustainability nonprofit organization. Daniel L. Sosland is president and executive director of Acadia Center, a nonprofit, research and advocacy organization.

RGGI States Can Save Billions on Healthcare with Stronger Program

BOSTON—New research from Acadia Center shows that a strengthened RGGI program would drive $2.1 billion in avoided health impacts. A stronger cap on carbon pollution would drive reductions in regional emissions of harmful pollutants like SO2, NOX, and particulate matter, which would lead to fewer emergency room visits, missed work and school days and premature deaths. The burdens of these co-pollutants fall disproportionately on low-income communities and communities of color, meaning that a stronger RGGI program will provide the greatest benefit to underserved populations.

“RGGI has created jobs, economic growth and climate benefits while improving the region’s air quality,” said Daniel Sosland, President of Acadia Center. “The RGGI states should build on that success by establishing ambitious cap levels through 2030 which would deliver substantial health benefits for the participating states.”

The new analysis shows that a 5 percent annual decline in the RGGI cap from 2020 to 2030—the most ambitious cap the RGGI states have modeled—would result in over $2 billion in avoided health savings, more than double the benefit of a continued annual cap decline of 2.5 percent.

“A stronger emissions cap over the next decade can help keep Springfield’s kids out of emergency rooms and in their classrooms,” said Sarita Hudson, Manager at Pioneer Valley Asthma Coalition. “Reducing pollution would make a huge difference in the everyday wellbeing and lives of this community.”

Environmental groups, health professionals and low-income advocates have called on the RGGI states to seize the opportunity provided by the program to look out for the communities burdened by pollution in a way that dramatically improves local air quality and generates revenue for the entire state. “The RGGI states can help low-income communities breathe easy, and strengthen them by re-investing RGGI proceeds into projects that spur local economic activity and create jobs,” said Jesse Lederman, Director of Public Health and Environmental Initiatives at Arise for Social Justice.

“Good state and regional policy needs to use this kind of smart thinking, to avoid inadvertent cost shifting from energy to health care. We support this forward-thinking effort” said Paul Lipke, Senior Advisor for Energy and Buildings, Health Care Without Harm.

Information on the 2016 RGGI Program Review, including meeting materials and stakeholder comments, can be found at: http://www.rggi.org/design/2016-program-review

Additional information on RGGI’s performance to date and needed reforms through the 2016 Program Review are described in Acadia Center’s 2016 RGGI Status Report:


RGGI Overview:

The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory, market-based effort in the United States to reduce greenhouse gas emissions. Nine northeastern and mid-Atlantic states reduce CO2 emissions by setting an overall limit on emissions “allowances,” which permit power plants to dispose of CO2 in the atmosphere. States sell allowances through auctions and invest proceeds in consumer benefit programs: energy efficiency, renewable energy, and other programs.

The official RGGI web site is: www.rggi.org


Media Contact:
Jordan Stutt, Policy Analyst, Clean Energy Initiative
617-742-0054 x105, jstutt@acadiacenter.org

States Considering Future of Northeast Climate Program

BOSTON — Nine states in the Regional Greenhouse Gas Initiative (RGGI) will be hosting a webinar today to discuss the future of the eight-year cooperative effort to reduce power plant carbon pollution. Materials that will be discussed during the webinar indicate that states will take the important step of establishing emissions limits through 2030, but the ambition and scope of new rules remains unresolved.

“RGGI’s success shows that states can and should lead on climate,” said Acadia Center President Daniel Sosland. Acadia Center’s July 2016 report Measuring Success shows that states in RGGI have experienced 3.6% more economic growth than states that have yet to act on climate, even as emissions have declined 16% more in RGGI states than in other states.

The core decision about RGGI’s future centers on the cap level — the overall limit on carbon pollution — and states are describing two options on today’s webinar: a cap that continues the current 2.5% annual decline, and a more ambitious cap that declines by 3.5% annually.

In addition to potential cap levels, the RGGI states will be discussing possible changes to other program design elements including accounting for banked and surplus emissions allowances and price controls. “These program designs will be crucial to ensuring that the RGGI cap achieves necessary reduction targets and avoids being burdened by a glut of allowances leading to insignificant carbon prices,” said Jordan Stutt, Policy Analyst in Acadia Center’s Clean Energy Initiative. “Improvements to existing design elements and the establishment of a strong emissions containment reserve will show that the RGGI states are committed to improving—not just maintaining—their model program.”

“State action on climate is now more important than ever,” said Peter Shattuck, Director of Acadia Center’s Clean Energy Initiative. “During the hottest year on record and with federal action uncertain, building on RGGI’s success is vital. Establishing ambitious targets through 2030 will show the country and the world that the RGGI states intend to remain at the forefront of climate action.”

 

Information on RGGI’s performance to date and necessary reforms through the 2016 Program Review are described in Acadia Center’s recent RGGI Status Report:

Additional information on the benefits of RGGI can be found at https://www.cleanenergyeconomy.us/

RGGI Overview:

The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory, market-based effort in the United States to reduce greenhouse gas emissions. Nine northeastern and mid-Atlantic states reduce CO2 emissions by setting an overall limit on emissions “allowances,” which permit power plants to dispose of CO2 in the atmosphere. States sell allowances through auctions and invest proceeds in consumer benefit programs: energy efficiency, renewable energy, and other programs.

The official RGGI website is: www.rggi.org

In a rapidly changing world, what do we mean by RGGI leadership?

Never before has the urgency of climate action been so apparent, demonstrated by record high temperatures and unprecedented drought. Yet, as the impacts of climate change become more painfully obvious, jurisdictions from small towns to the world’s largest countries are working towards solutions. Since the Regional Greenhouse Gas Initiative (RGGI) began in the Northeast, the Governors of the participating states have led by embracing, implementing, and improving a first-in-the-nation carbon reduction program. It is now up to a new group of Governors to determine whether RGGI remains a model for ambitious action on climate.

What does RGGI leadership mean?

Looking out for our climate, our health, our economy
Thanks to RGGI’s track record, the participating states can lead on climate without setting back their economies. As detailed in our recent report, since RGGI began CO2 emissions have fallen sharply (faster than the rest of the country), electricity prices have decreased (while the rest of the country has seen an increase), and the economy has grown (outpacing the rest of the country).

Change in Economic Growth, Emissions and Electricity Prices, 2008 to 2015pages-from-rggi-blog-10_6_final

By setting ambitious cap levels for the future, the RGGI states can continue to achieve the best outcomes for our climate, our health, and our economy. Specifically, the RGGI states should establish post-2020 cap levels designed to meet existing climate targets, which cluster around 40% reductions by 2030. Analysis from Synapse Energy Economics has shown that implementing a RGGI cap with a 5% annual decline from 2020 through 2030 would be the lowest-cost pathway to achieving climate requirements. According to that study, such a cap would also yield over $25 billion in total savings for the region while creating 58,000 new jobs each year in the participating states.

A forward-going 5% annual reduction would be more gradual than what the RGGI states have achieved to date, but it would still put us on a path to achieving our science-based goals. And as we cope with the fact that global CO2 concentrations have now eclipsed 400 parts per million, it’s become more important than ever that our leaders address scientific imperatives on climate change with comparably ambitious policy.

The forefront of climate policy
When a bi-partisan group of Governors of the RGGI states first came together to place a limit on CO2 emissions, they staked their claim as national leaders on climate. In the absence of federal climate policy, they were the first states to act on reducing CO2 emissions from the power sector. When they decided to auction allowances rather than give them away for free—as was common practice under previous emissions trading programs—they directed billions of dollars to consumers instead of polluters. This decision is largely responsible for RGGI’s success as a program that reduces harmful emissions and serves as an engine of local and regional economic growth.

While the leadership role of the RGGI states to-date is indisputable, the bar for climate leadership has been raised. Since the RGGI program began, the region, the country, and the world have taken great strides to address carbon emissions. In recent months the U.S. and China, the planet’s largest emitters of CO2, have ratified the Paris Climate Agreement. In the last week, India and the European Union have followed suit, bringing the tally of signatories beyond the threshold of 55 countries and 55% of global GHG emissions necessary to make the agreement binding. Also this week, Canada—America’s largest trading partner—announced nationwide carbon pricing. Provinces can implement their own cap-and-trade programs (as Quebec, Ontario, and Manitoba have done), their own carbon tax (like British Columbia), or they can accept the federal carbon tax, beginning at $10/ton in 2018 and rising to $50/ton by 2022.

The RGGI states are no longer going it alone on climate, but they can still be leaders. Committing to a strong future for the program will provide a valuable guidepost as the rest of the country prepares to comply with the Clean Power Plan, and as the rest of the world considers how to reduce emissions without sacrificing growth. Momentum is building, support is growing, and the market is transforming – will the RGGI states continue to lead the way?