The Regional Greenhouse Gas Initiative (RGGI, pronounced “Reggie”), cuts global warming pollution from power plants, sets us on a path toward a clean energy future, and harnesses the power of the free market to reduce pollution in the most cost effective way.
RGGI protects our health and environment while making Maine more efficient and creating new business opportunities. Most of the program has already been designed, but important choices lie ahead that will affect energy consumers.
Economic Benefits Include:
Increased investment in energy efficiency for homes and businesses. This reduces waste and could save the average household $50-$85/year and the average commercial customer $250-$400/year. (Industrial customers could save thousands of dollars.)
Helps Maine businesses tap into regional and international markets for “carbon” and other global warming pollution reductions through the capturing of methane from farms and landfills, by planting trees, and by ensuring more efficient use of oil and gas.
Leaves more money in Mainers’ pockets to
spend on other products and services,
increasing economic activity.
Energy efficiency means a reinvestment in Maine businesses and manufacturing facilities—making it more likely that they will stay in Maine and create jobs.
Creates a framework for making good decisions about our energy system. Choosing clean energy sources that produce less global warming pollution today will decrease our reliance on foreign fossil fuels and help lower long-term energy costs.
Why does RGGI use a “cap & trade” approach?
Economists and businesses have advocated for “cap-and-trade” systems for a long time because they can save money.
The “cap” means that the program sets an overall limit on the amount of pollution (in this case, carbon dioxide, or CO2) that can be emitted by power plants. The cap in Maine starts at six million tons of CO2 per year—that means that there will be six million permits, or “allowances,” available.
Each power plant has to acquire enough permits to cover its emissions or face heavy fines, but they can “trade” or sell them among themselves. This program reduces global warming pollution because over time, the state eliminates some of the permits, setting a predictable schedule for requiring power plants to reduce their emissions, and allowing power plants to figure out themselves how to do this most cheaply.
Traditional regulation works differently—it sets a specific limit of pollutant for each source, or requires polluters to use a specific technology. In many cases, this is appropriate—especially when the pollutant is highly toxic (like mercury) or has local impacts (like phosphorous in a river). CO2 is not toxic and has no direct local impacts, making it a perfect candidate for a cap and trade approach. It doesn’t matter where we reduce pollution, as long as we start doing it today!
Businesses Support RGGI and Power Plant Global Warming Reductions:
“As one of the country’s largest generators of electricity, Entergy considers climate change to be among the most significant long term issues facing policymakers today. … RGGI can improve our global environment without sacrificing electricity reliability and affordability that is essential to State and broader RGGI region.” —Gary Serio, VP for Safety and Environment, Entergy
“Global warming poses significant threats to the economy of the Northeast, but there are significant opportunities to be gained from an early response to the problem. … As business leaders, we understand that addressing greenhouse gas emissions in our own operations brings many benefits – not the least of which is an improvement in the bottom line.”
—Stanley Bennett, President, Oakhurst Dairy, Portland, Maine
“We see RGGI as an important component in the region’s economic growth and development of renewable energy products to reduce the region’s impact on climate change…We believe that flexible market mechanisms will deliver cost-effective emissions reductions.”
—Mark Buckley, VP for Environmental Affairs, Staples
“We’re talking about the type of business issue that comes along perhaps once in a century. Those companies and industries which deny the issue will be marginalized and ignored.”
—David Crane, Chief Executive, NRG
“The approach developed through the Regional Greenhouse Gas Initiative rewards innovation and demonstrates that the region can address climate change using a market based approach.” —Bank of America