CO2 Pact in Eastern U.S. Has Funded Large Investments in Efficiency

A carbon cap-and-trade program launched by 10 eastern states in 2008 has generated $780 million in revenues, with more than half of those earnings funding energy efficiency programs. The Regional Greenhouse Gas Initiative, or RGGI, says that $404 million generated by selling permits to utilities to emit greenhouse gases has been spent on efficiency programs, such as replacing boilers and insulating and weatherizing homes and businesses. RGGI has generated substantial revenues even though prices for permits to emit CO2 have dropped to less than $2 a ton as emissions have declined during the recession, coal-fired power plants are being replaced by natural gas, and the prospect of a national carbon market has faded. Other RGGI permit revenues have been used to encourage the development of renewable energy, help the poor pay heating bills, and, in New York and New Jersey, to lower budget deficits. After Republican victories in the Northeast in last November’s elections, some states, such as New Hampshire, are threatening to withdraw from RGGI, whose near-term goal is to cut CO2 emissions from the region’s power plants by 10 percent by 2018.