by Tom Tietenberg
A few years ago, I served on a panel as part of a National Academy of Sciences study titled “America’s Climate Choices.” One of the takeaway lessons from that study was that carbon dioxide has a very long residence time in the atmosphere, up to 1,000 years.
It is sufficient to manage annual emissions for conventional pollutants, but we need to manage cumulative emissions for carbon dioxide. That changes everything.
We must cut carbon emissions now, particularly from power plants — the largest single emissions source. If we don’t, it becomes much more difficult and much more expensive, if not impossible, to stay within international temperature targets that are designed to protect us from the worst ravages of climate change.
The Environmental Protection Agency recently proposed regulations to control greenhouse gas emissions from new power plants; regulations to control emissions from existing power plants likely will follow soon.
What effect would implementing the new source rule have on Maine?
No new power plants are planned in Maine, according to the Maine Department of Environmental Protection, so the state is likely to be unaffected by the new source rule for the foreseeable future.
How about the likely new rule on existing sources? It is still in the development stage, but so far it seems that Maine will experience great benefits and little, if any, additional costs.
Consider why the benefits would be high.
First, of course, we will benefit along with the rest of the world from reduced climatic damages.
Second, as a downwind state from many polluting power sources, Maine especially will benefit from reduced emissions of pollutants other than carbon that are also reduced when carbon dioxide is reduced — sulfur dioxide, nitrogen oxide, ozone, mercury and small particulates. All of these pose health risks.
National estimates indicate these regulations could save as many as 3,600 lives, prevent more than 23,000 asthma attacks and avoid more than 2,300 emergency room visits and hospital admissions during the 2012-2025 period.
While the benefits are high, the compliance costs should be very low (probably even zero). Maine already has joined with other states in the Northeast to control power plant carbon emissions via the Regional Greenhouse Gas Initiative. It is likely that the RGGI rules by themselves produce sufficiently large emission reductions to assure that Maine’s plants are already in compliance with the EPA power plant rules.
Even if further reductions are required, however, RGGI provides a proven process for securing those reductions cost effectively.
RGGI plants have been so successful in reducing emissions that its 2014 cap is being reduced by 45 percent to bring it into congruence with the actual, dramatically reduced, emission levels. While the recession played some role in this decline, economic analysis suggests that the main sources of the reductions were fuel substitution (promoted by lower natural gas prices and conversions to renewables) and investments in energy efficiency.
RGGI states allocate the largest proportion of the revenues received from the auctions specifically to promote energy efficiency (e.g. weatherizing buildings, installing more efficient lighting, heating and cooling, and investing in new production technologies such as more efficient motors). As of September, the greenhouse gas initiative had raised about $44.7 million for these Maine programs.
The resulting efficiency investments save homeowners and businesses money and are an engine of growth for the economy. An analysis of the program’s first three years found that it had created some $92 million in net economic value for the state.
The bottom line is that Maine and the rest of the RGGI states have been able to reduce carbon emissions from power plants dramatically, while their economies have become stronger. Maine not only deserves all these benefits from being a clean energy leader, but it also deserves a level playing field where the rest of the country participates. That’s why it makes so much sense from a Maine perspective to enthusiastically embrace national power plant carbon rules as a way to bring the rest of the country up to speed with our region.
Tom Tietenberg is the Mitchell Family Professor of Economics, emeritus at Colby College. He has been involved in the design and evaluation of climate policy since the late 1980s.