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The Lose–Lose Reality of RGGI

The carbon trading scheme doesn’t just fail to reduce pollution — it raises electricity costs on families, too.

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04.9.18

We’ve been seeing for years now clear evidence that market-based carbon trading plans like the Regional Greenhouse Gas Initiative (RGGI), the nine-state cap-and-trade program in existence for nearly a decade, fail to reduce climate-heating emissions where they’ve been instituted. Simply put, carbon trading schemes are a false solution to climate change. But this is only half of the bad news. We’re now learning that RGGI has also increased electricity costs for residential consumers. The plan is a lose-lose proposition for families and for our planet.

New analysis of Energy Information Agency data by Food & Water Watch shows that from RGGI’s implementation in 2009 to today, overall energy costs for residential consumers in the participating states increased by more than $1 billion annually (see Figure 1). Meanwhile, energy costs for large industries decreased, raising questions of whether the plan was designed with senseless handouts to corporations in mind.

RGGI Costs for Consumers

Figure 1

Another key finding from our new RGGI analysis gets to the heart of why the program – and others like it – fails to address climate emissions. Under RGGI, the share of electricity produced from clean, renewable wind and solar sources increased by a very modest 2.4 percentage points. Yet over the same period, the share of electricy sourced from natural gas, a fossil fuel with alarming climate implications, increased nearly five times faster, by 11.2 percentage points (see Figure 2). 

RGGI Gas Vs. Renewables

Figure 2

Advocates of natural gas point to its big part in replacing filthy coal as the dominant power source in America. But while gas may emit much less carbon dioxide than coal, its overall impact on climate warming could be even worse. Methane, the primary component of natural gas, is 86 times more potent a greenhouse gas than carbon dioxide over a 20-year period. Using even very conservative methane leakage rates from the increased natural gas infrastructure that RGGI states have seen – drilling sites, pipelines, compressor stations, electric generating units – the switch from coal to natural gas has likely erased any climate benefits of the transition. If the methane leakage rates are higher – and they almost certainly are – then RGGI states could have experienced net increases in greenhouse gas emissions since the pollution trading plan began.

The time has come for well-meaning public officials and the environmental community at large to finally acknowledge the hard truth about RGGI: it was built to fail, and sure enough, it’s failing. There’s only one legitimate path to rapidly reducing climate emissions and, hopefully, saving our planet: moving off fossil fuels entirely. For the sake of future generations, that transition to clean, renewable energy must be rapid and complete. Trading schemes like RGGI are only getting in the way.

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