Regional greenhouse gas initiative (RGGI) results are in: more effective, faster & Cheaper than predicted.

• Position: PROGRESS REPORT

BACKGROUND

In 2009 the Regional Greenhouse Gas Initiative (RGGI), the country's first market-based program to reduce global warming pollution from power plants, began full operation by ten Northeastern and Mid-Atlantic states after over five years of hard work by the states, industry and advocates like CLR RGGl's goal was to reduce those emissions by 10% by 2018. On December31, 2011, the program ended its first three year compliance period. Member states are now preparing for phase ll.

THE RESULTS

Because emissions were reduced far more effectively than envisioned, the first compliance period ended with a surplus of allowances that permit the release of global warming pollution. While there are many factors leading to decreased emissions, the bottom line is that cleaner power sources and energy efficiency captured the market share of the older power plants on which New England has historically relied. CLF believes that the signal RGG'I sent to the energy markets is one of the reasons for this pollution reduction. We also know from past experience that economic incentive programs accelerate the timetable for reducing emissions and achieve reductions at lower cost - often times far lower than initially projected.

ECONOMIC BENEFITS

Under the RGGI program, emissions allowances are auctioned, and the auction revenues are invested in energy efficiency and clean energy programs that increase jobs and add economic value in the participating states. A recent study shows that the program added $1.6 billion in net benefits to the RGGI region economy, with $888 million in New England alone. It saved electricity customers $1.3 billion on their energy bills region-wide through investment in energy efficiency and created 16,000 Job Years during the first 3 years of the program. Meanwhile, the costs were minimal, creating a modest 0.7% electricity price increase on customer bills across the region.

CLF IN ACTION

CLF has been deeply involved with the RGGI program from its inception. As the member states undertake a review of how the program is working, CLF is working to ensure RGGI's long-term effectiveness through a thorough, empirical evaluation of...