Editorial: Let’s get RGGI working again
On Friday, the state Department of Environmental Services will hold a hearing on a proposal by the nine-state Regional Greenhouse Gas Initiative known as RGGI to reduce the amount of carbon dioxide the region’s power plants can emit by 45 percent. Each state will ultimately have to vote on the proposed reduction. New Hampshire’s answer should be “yes.”
The impact of climate change has become all too apparent and, with it, the need to do something to address its root cause. Cutting the regional compact’s combined annual emissions from 165 million tons to 91 million, as dramatic as that might sound, is but a drop in the bucket of a warming world. But the compact, the first effort in the United States to act cooperatively to address what may be mankind’s biggest threat, serves as both a role model and laboratory for governments large and small, and it has stopped working. Cheap natural gas, which has all but mothballed coal-burning power plants, plus a recession-driven drop in energy use, now allows utilities to meet the current cap without making further investments to reduce emissions. To make progress, the carbon cap must be lowered.
The compact requires utilities to bid and purchase credits to emit carbon at an auction. That gives them an incentive to make an investment in reducing emissions that they might otherwise not make. The money raised is then used, when not diverted by lawmakers seeking a budget fix, to provide incentives for individuals, municipalities and business to invest in conservation measures that reduce energy use and ultimately carbon emissions.
The economic impact on utility customers is barely noticeable. The average residential user pays about 46 cents more per month, yet sale of the credits raises millions of dollars that states can use in a host of ways to increase energy efficiency and reduce the demand for electricity. The money raised has been substantial: nearly $1 billion for compact members, including roughly $40 million for New Hampshire, but that source of funding has now dried up. Lowering the cap would raise the price of the carbon credits and, with them, the stream of money states use to fund conservation measures. Critics of the regional compact portray the program as an inefficient boondoggle that transfers money from utility customers to government. But last year, a UNH study estimated that every dollar the state spent on energy conservation grants led to $4.67 in energy savings. That’s money that circulates in local economies and creates jobs, instead of being sent out of state to pay for coal, oil or natural gas.
New Hampshire provides fewer incentives for homeowners and businesses to reduce energy than most New England states. Such incentives are no different than those used by the state to encourage something seen as a public good – business development, economic revitalization, and job creation for example. The money raised by the carbon credits reduces pollution. It conserves energy. And it creates jobs for hundreds of people who make and install energy-efficient windows, insulate leaky homes and make buildings more energy efficient.
Ultimately, Congress needs to address climate change on a national level and grand scale by imposing an across-the-board tax on carbon emissions, but until then the regional greenhouse gas compact remains the nation’s most effective attempt to deal with the problem. And in the meantime, by voting to lower the carbon cap, New Hampshire would be doing its part to combat climate change while putting the state on a path toward a more sustainable energy future.