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Coalition Efforts Strengthen Country’s First Carbon Market

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Energy Foundation made its first grant to Acadia Center in 2013.

Since its launch in 2009, the country’s first carbon market has provided economic, health, environmental, and other benefits to nine participating Northeast states. The region is proving that decarbonization and economic growth can go hand in hand.

The Regional Greenhouse Gas Initiative (RGGI) is a market-based emissions reduction program that operates in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont. New Jersey and Virginia have both announced plans to participate (in New Jersey’s case, to rejoin) starting in 2020. RGGI requires electricity generators to hold an allowance for every ton of carbon dioxide (CO2) they emit from their power plants. The number of allowances is capped, and companies that want to emit more must buy additional allowances from that limited supply. This provides an economically efficient incentive to reduce the region’s CO2 pollution.

Over RGGI’s history, annual carbon emissions in the region have dropped nearly 50 percent. States have received nearly $2.8 billion in proceeds from CO2-allowance auctions and dispersed them back into the economy through carbon-reducing programs—including some that particularly benefit low-income residents. RGGI also has generated more than $1 billion in clean energy and energy investments, and added 44,000 jobs to the Northeast region. Finally, RGGI has prevented thousands of asthma attacks and saved $5.7 billion in health-related economic costs.

“States in RGGI are demonstrating the power of bipartisan climate leadership. RGGI is a powerful example of an effective policy that drives economic, consumer, health and climate benefits while tackling a major challenge. Responsible leaders know we need to address climate change, and RGGI provides a readily available blueprint for success.”

Daniel L. Sosland, Acadia Center President

Among those benefiting from RGGI: Smuttynose Brewery in New Hampshire, Wesson Energy in Connecticut, and this homeowner in Maryland.

A recent RGGI program review led to a new model rule establishing a goal to reduce emissions 30 percent by the year 2030 and setting new declining caps for power sector emissions. A coalition of business, consumer, health, equity, and environmental groups helped advance the new model rule, with Acadia Center leading on coordination. Others include Environmental Advocates of New York, Northeast Clean Energy Council, Ceres, Toxics Action Center, Natural Resources Council of Maine, Sierra Club, Environment America, and Climate Action Network, among others.

Using their networks, coalition members educated decision-makers on the program’s benefits and organized public support for strong targets and policies. Efforts included an online Mother’s Day campaign asking governors to strengthen RGGI to protect kids’ health, and reports like “Our Health at Risk: Why Are Millions of Americans Still Breathing Dirty Air?,” released during National Public Health Week. Environmental justice organizations ensured that communities affected by fossil-fuel pollution would see the benefits of carbon-reduction programs. Business groups encouraged company leaders to push back on any proposals for state withdrawal from RGGI and organized a sign-on letter supporting the program.

Advocates are now helping states to adopt the new model rule, keep RGGI targets strong, and ensure its programs benefit all Northeast residents.