Forum: We need to reduce energy costs, not tax ratepayers

Op-ed by Bill Dornbos and John Harrity in the New Haven Register.

The Senate Republican proposal to raid ratepayer funds for energy efficiency and renewable energy would decimate successful programs that reduce energy costs for Connecticut businesses and families. But that’s not all. Their proposal would also stifle job growth in the state’s rapidly expanding energy efficiency and solar industries, and it’s about the worst thing Connecticut could do as the harmful impacts of climate change become more apparent every day.

The Senate Republicans’ revised budget would not only divert $68 million annually from Connecticut’s award-winning energy efficiency programs into the General Fund for the next two fiscal years — a major cut that would reduce electric efficiency programs by about one-third — but it would also plunder almost half of the ratepayer funding for Connecticut Green Bank and its renewable energy programs.

In doing so, the Senate Republicans would convert cost-effective investments that save consumers money into a new energy tax on ratepayers to shore up the state’s budget deficit. Every dollar invested in energy efficiency last year produced $3.89 in lifetime savings on utility bills. But this new energy tax would slash that productive investment and then, even worse, cause significant and immediate job losses in Connecticut’s energy efficiency and renewables sectors, crippling these thriving industries at a time when we need to foster local economic growth and job creation to increase state revenues.

These raids also run completely counter to our state’s governing energy strategy, which, wisely, makes efficiency our first fuel source. The benefits of this choice are many and undeniable. Energy efficiency investments made in 2016, for instance, will save consumers an estimated $962 million in lifetime bill savings. Those same investments will also generate approximately 12,000 jobs in Connecticut because energy efficiency replaces fossil fuels imported from out of state with in-state labor. Last year’s investments will also protect public health and the environment by cutting carbon emissions and local air pollution.

The Senate Republican’s proposed budget inflicts even more harm by raiding $26 million annually from the market-based Regional Greenhouse Gas Initiative (RGGI). Unfortunately, the Democrats’ budget also raids RGGI, which reinvests money from carbon emission auctions in the energy efficiency programs and in the Green Bank. This funding was intended to reduce energy costs and speed the deployment of local clean energy, like rooftop solar — and it has worked.

Plus, the Green Bank has leveraged its RGGI funding to help attract tens of millions of dollars in private investment for in-state projects. Manufacturers and businesses helped by these investments have seen reductions in energy costs. And these reduced energy costs mean more competitive Connecticut companies sustaining more jobs for Connecticut workers.

Beyond these economic arguments is the critical concern about undermining our commitment to reducing greenhouse gas emissions. Climate change is the most important issue facing all of us for the rest of our lives. And we are fortunate to live in a state that has provided bipartisan leadership in addressing this issue. Governor Malloy’s recent announcement that Connecticut would remain committed to the standards of the Paris Climate Agreement – despite President Trump’s withdrawal from the pact — is just the latest example of such leadership.

Connecticut’s legislature has mandated ambitious, yet achievable, goals for reducing in-state emissions. Harnessing ratepayer funds to invest in zero-carbon efficiency and renewables is a critical means to achieving those goals. We cannot afford to take a break or divert funds or wait for a good budget year to do this important work. Climate change is real, it is relentless, and it is unfolding more quickly than predicted. And it has a disproportionate impact on the most vulnerable residents of our state, including working families.

Our kids, and their kids – and children around the world – expect and deserve to grow up in a world that is habitable. We must not step back from our responsibility to future generations in a short-sighted and misguided effort to balance the budget.

Protecting ratepayer funds that support energy efficiency and clean energy programs is good for consumers, good for homeowners and businesses, good for workers, good for people who breathe our cities’ air, and good for the climate.

John Harrity is president of the Connecticut State Council of Machinists. Bill Dornbos is Connecticut director and senior attorney at Acadia Center. Both serve on the steering committee for the CT Roundtable on Climate and Jobs (www.CTClimateandJobs.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?