As Feds Move Away From Climate Change, Maine and New England Consider Stronger CO2 Caps

Jul 14, 2017

While the federal government pulls back from global efforts to reduce greenhouse gas pollution, the New England states are considering more aggressive curbs on power plant carbon emissions.

The Regional Greenhouse Gas Initiative, or RGGI, is a market-based cap-and-trade program that sets limits on carbon-dioxide emissions in nine states, including all of New England. Power generators can buy and sell emission allowances under the program — which can give a financial boost to cleaner sources such as wind or hydro plants. So far RGGI’s allowance auctions have raised more than $2.5 billion, with the proceeds flowing to the states, and most of them investing heavily in energy efficiency efforts.

“All the evidence points to the fact that RGGI’s working well, it’s been a great success since its inception,” says Peter Shattuck, director of the Clean Energy Initiative at the Acadia Center, an an environmental policy group with offices in Maine and around the northeast.

“[Since RGGI’s 2009 startup] carbon pollution is down 40 percent, electricity prices are down 3 percent, and at the same time [the participating] states’ economies have grown by 25 percent,” he says.

Not all of that is directly attributable to RGGI though. The recession softened electricity demand considerably, while the surge of relatively low-polluting, low-cost natural gas into the power markets played a big role in the overall emissions decline. And a variety of factors are at work on overall electricity prices and state economic growth.

Now the question is whether RGGI should put a bigger squeeze on CO2 emissions, and try to raise more money for state efficiency efforts. But getting the nine states to agree?

“It’s a, it’s a, it’s a significant challenge,” says Marc Cone, director of Maine’s Bureau of Air Quality. “Each and every jurisdiction has certain challenges that are each unique, and different."

Behind closed doors they’ve been debating how far — or even whether — the carbon cap should be lowered. Back in 2012, the states agreed that CO2 emissions should be reduced by 2.5 percent a year, through 2020. After that, the goal might be in a range of a 2.5 percent to 3.5 percent annual reduction.

Maine, says Cone, prefers the less aggressive target.

“We’re looking, certainly leaning toward the lower end of that and I think people need to recognize that Maine has one of the lowest carbon dioxide emissions rates for our generating asserts in the country.” he says.

That’s because Maine’s energy mix includes a healthy dose of non-fossil-fuel generation from hydro and biomass plants. So paying a premium for additional CO2 reduction is arguably a burden that Maine would see as other states’ problem. But Cone says Maine does makes good use of its share of the RGGI auctions and, on balance, benefits from participating.

Other states — including Massachusetts and Rhode Island — are pushing for more aggressive reductions in the carbon cap. And environmentalists like the Acadia Center’s Peter Shattuck want the largest possible reduction, to show leadership at a time when the administration of President Trump is backing away from climate change action.

“This is an opportunity and a necessity to fill that void. And this is not uncharted territory for RGGI itself,” Shattuck says. “It was conceived during the 2000's when the Bush administration was not acting on climate and a bipartisan group of governors came together and formed the program.”

FILE - In this Oct. 21, 2013 photograph, CO2 filed pipes are secured by a barbed wire topped fence at the Kemper County energy facility near DeKalb, Miss.
Credit AP Photo/Rogelio V. Solis

The power generators, meanwhile, are largely staying out of the fray. Dan Dolan is director of the New England Power Generators Association, whose members include both fossil fuel and renewable resource plants. He says that since World War II, the industry could count on electricity demand to grow at a steady 1 percent a year. But that’s changing.

“We’ve started to see that rule bend,” says Dolan. “And part of it did start because of the recession and the pullback from some of the manufacturing and industrial facilities here in New England. But we’ve also now started to see a material impact of all this spending on energy efficiency and the changing way that consumers are using electricity.”

One of those new ways is to power their cars. Gas-powered transportation continues to deliver the bulk of the nation’s human-produced carbon dioxide to the atmosphere, while the contribution from electricity generation has declined sharply. As programs like RGGI and other state policies squeeze even more carbon emissions out of the electricity supply system, increasing demand for electricity with more electric cars could result in net reductions in CO2 emissions. And that would mean more profits for power plants. Stakeholders on all sides of the issue say that’s the next big wave in “decarbonizing” the economy.

This story was originally published July 13, 2017, at 6:37 p.m. ET.