The Northeast has made big gains in cutting carbon pollution.
But a regional program to further reduce greenhouse gas emissions is struggling with how to build on that success. Environmentalists want governors keep up the pressure.
The Regional Greenhouse Gas Initiative known as "RGGI" is the first mandatory, market-based effort to reduce emissions that cause climate change.
Here’s how it works: nine Northeast and mid-Atlantic states set a cap on carbon emissions from the electricity sector. Then the emissions are sold at an auction, with states reinvesting the proceeds in energy efficiency and renewable energy programs.
Peter Shattuck is with the non-profit research group Environment Northeast. Shattuck says the good news is that emissions are on track this year to fall 45 percent below the current cap, even as electricity prices have declined.
"We’ve seen a number of trends bring down emissions significantly in the electric sector in the Northeast, including utilization of cheaper natural gas but also growing renewables and efficiency investments," he says.
Participating states are now deciding where to set a new emissions cap. Several scenarios are under consideration, including three that would not reduce emissions from current levels.
Shattuck says the burden is now on the region’s governors, including Vermont Gov. Peter Shumlin, to keep up the pressure. Shattuck says the states need to be aggressive, and push to lower the cap to reduce greenhouse gas pollution even more.
"Gov. Shumlin needs to lead the RGGI states in choosing reforms that actually cause RGGI to reduce emissions from where they are right now," he says. "We have a growing climate crisis and states across the region have committed to reducing greenhouse gas emissions and RGGI needs to be a key tool in that."
Deputy Natural Resources Secretary Justin Johnson is a Vermont board member for RGGI. He says the Shumlin Administration does want to see the emissions cap lowered.
"Certainly in Vermont, we’re very supportive of that approach. The idea of having a carbon emissions reduction scheme is that it should reduce emissions," he says. "Seems pretty basic, and that’s what we’re looking to do."
In its first four years, RGGI raised about $952 million for the states and has delivered economic benefits through programs such as weatherization.
But Johnson says there’s another potential financial consequence as well. Since utilities have to buy the carbon allowances, he says that can add pressure to raise rates.
"Because what happens is that… as you decrease the cap the electric rate does go up because there’s a cost to the utilities to pay for the carbon emissions," he says.
So Johnson says officials have to study the economic impact before setting the new cap.
"There’s general agreement amongst the states that we want to align the cap more closely with the actual emissions, and then have it go down from that point. It keeps it robust and makes it an emissions reduction scheme. But exactly where we’ll end up we haven’t quite decided yet," he says.
But environmentalists say their research shows the biggest economic benefit to the states comes from the most aggressive emissions cap.