Rhode Island received $8.5 million in September from the sale of emission permits as a result of its participation in the Regional Greenhouse Gas Initiative, a cap-and-trade program that includes 11 northeastern states.
RGGI, often pronounced “Reggie,” is a coalition of states cooperating to set regional CO2 emissions limits. Companies in these states can purchase predefined emissions allowances from a limited pool of permits at quarterly auctions. According to the Rhode Island Office of Energy Resources website, RGGI is “the nation’s first mandatory, market-based cap-and-trade program to reduce emissions of carbon dioxide.”
The program helps move the region toward decarbonization by gradually decreasing the regional emissions cap “so that CO2 emissions decrease in a planned and predictable way,” according to Robert Beadle, communications manager for the RIOER.
The proceeds of the auctions are largely used to fund various green initiatives. RIOER’s most recently proposed allocation plan recommends that funds be used to make Rhode Island state government facilities more energy efficient, improve lighting technology in municipal and public school buildings and support clean energy in the Rhode Island Public Transit Authority system, among other initiatives.
Beadle said that RGGI “is successfully reducing carbon pollution” in the state. “Over RGGI’s first four control periods (from 2009 to 2020), the states that participated during that time saw a 53% reduction in power sector carbon emissions,” he wrote in a joint RIOER and Department of Environmental Management email to The Herald.
He explained that the program “is a contributing but not sole factor in helping to reduce power sector emissions,” adding that “continued regional investment in renewables, energy efficiency, storage, demand response and other measures” would continue to be crucial in decarbonizing the state.
Beadle added that from RGGI’s founding in 2009 through 2019, auction proceeds have afforded participating states $2.8 billion to invest “in “energy efficiency, clean and renewable energy and other strategic programs.”
J. Timmons Roberts, professor of environment and society and sociology, wrote in an email to The Herald that RGGI is a good start but needs to be strengthened and that market approaches are not enough to combat climate change.
“RGGI has successfully shown that emissions trading is not the end of the world,” he wrote. “In fact, it’s raised billions over the years that were invested in excellent things like energy efficiency and some renewables in the region.”
Although he feels the spending of auction proceeds have had clear benefits, Timmons Roberts noted that it is difficult to know how much the regional caps have actually reduced emissions due to the transition from coal- and oil-based electricity generation to natural gas, which took place in the state over the same period of time. “It certainly didn’t hurt, but it’s hard to know how much it helped,” he wrote.
Timmons Roberts added that current and past emission prices have been “way, way too low.”
“Over the history of the auctions, the price (of emission permits) has stayed around $5 to $7 a ton of carbon, way below what anyone thought was needed to drive firms and families to make investments to save energy,” he wrote. “That’s like 5 cents a gallon of gas.”
Timmons Roberts added that more is needed to address the climate crisis. “Should (RGGI) be eliminated? No. Should it be strengthened? Yes. Is it enough? NO.”
In addition to market-based approaches like cap-and-trade and carbon tax, he wrote that “strong efficiency standards (and) massive investment/incentives in renewables” are necessary to meet the goal of 100% renewable electricity in Rhode Island by 2030 outlined in a 2020 executive order issued by former Gov. Gina Raimondo.
Alana O’Hare, press secretary for the governor’s office, wrote in an email to The Herald that RGGI forms an important part of the Ocean State’s existing climate action plan. “Rhode Island has a suite of clean energy programs already established, including renewable energy initiatives (and) nation-leading energy efficient programs” as well as RGGI, O’Hare wrote.
She added that RGGI “provides a model for other emission-reduction efforts elsewhere in the economy,” such as the Transportation Climate Initiative, a similar coalition of northeastern states that includes Rhode Island. The TCI “seeks to improve transportation, develop the clean energy economy and reduce carbon emissions from the transportation sector,” according to their website.
In addition to RGGI, she wrote, the recent passage of the Act on Climate further strengthens the state’s climate plan. The legislation, which was signed by Gov. Dan McKee in April, deepens the emissions targets of a previous 2014 act and requires the state to reach net-zero emissions by 2050, with the target of an 80% reduction below 1990 levels by 2040.
O’Hare wrote that the law’s passage represents “a bold commitment to reduce climate emissions and enhance our economy and public health.”