Cap-and-trade program fuels economic growth in Northeast
Cross-posted from Climate Progress.
A new report finds that America’s first mandatory, market-based carbon cap-and-trade system added $1.6 billion in value to the economies of participating states, set the stage for $1.1 billion in ratepayer savings, and created 16,000 jobs in its first three years of implementation. Says Susan Tierney, managing principal at the Analysis Group, which produced the report:
We tracked the dollars spent, and RGGI [the Regional Greenhouse Gas Initiative] generates greater economic growth in every one of the 10 states that participate in RGGI than would occur without a carbon price. The states’ auction of the CO2 allowances was important for generating those public benefits.
The Regional Greenhouse Gas Initiative (RGGI) — a modest 10-state cap-and-trade program designed to reduce carbon emissions in the utility sector 10 percent by 2018 — was implemented in the northeastern U.S. in 2008. At that time, there was a strong consensus that policy action to address climate was needed, and the program was crafted with bipartisan support.
However, as the faux climategate scandal unfolded and the plan for a national cap-and-trade program unraveled, some of the support for RGGI disintegrated. Driven by an aggressive multimillion-dollar campaign from the Koch-funded Americans for Prosperity (AFP), some state legislatures considered pulling out of RGGI. Only New Jersey’s Gov. Chris Christie, who once strongly supported RGGI, actually acted to take his state out, claiming the program was a “gimmick.”
But this latest three-year analysis from the economic consultancy Analysis Group shows that the program has been anything but a gimmick — creating solid economic returns that outweigh the costs. According to the study, RGGI has created 16,000 jobs, helped states avoid $765 million in out-of-state energy imports, and created over $1 billion in net present value for ratepayers:
All told, electricity consumers overall — households, businesses, government users, and others — enjoy a net gain of nearly $1.1 billion, as their overall electric bills drop over time. This reflects average savings of $25 for residential consumers, $181 for commercial consumers, and $2,493 for industrial consumers over the study period.
This is great news for ratepayers. But it’s bad news for AFP, an organization that has engaged in an all-out assault on RGGI by calling it a tool of economic destruction. Now we have the experience to determine the impact, and this report shows just how wrong AFP was.
This February, AFP ran ads attacking RGGI, saying the program would inflate bills 90 percent in New Jersey. Anyone who followed RGGI knew these ads were just plain silly. But with more data showing just how economically beneficial a cap-and-trade program can be, these ads are turning out to be maliciously false.
Making the media campaign that much harder to stomach, one of the major backers of AFP, Koch Industries, was actually participating in RGGI carbon trading while pushing out ads claiming that “rates can rise as much as 90 percent or more as speculators drive permit costs through the roof.”
Watch the ad below:
What can we learn from this? Well, for one, we know not to listen to the scare tactics from organizations like AFP that are willing to say anything in order to prevent carbon reduction programs from moving forward. This is a major blow to AFP (as if they had a lot of credibility in this area to begin with). It’s hard to imagine anyone in the press taking their claims about the economic impact of carbon-reduction seriously ever again.
“We should not ignore the larger lesson — that the bellowing we hear from dinosaurs about how climate protection and clean energy development is bad for jobs and the economy is dead wrong,” Seth Kaplan, vice president for policy and climate advocacy at the Conservation Law Foundation, said to Climate Progress.
“A well-designed greenhouse gas reduction policy like RGGI is a win for just about everybody, and the complaints — amplified by their well-financed megaphone — from the filthy few companies who make their money by extracting and selling coal and oil, should not distract us.”
Let’s keep these lessons in mind when we inevitably have another national political discussion around addressing climate change.