RGGI puts cap on emissions in Mass

by Beacon Staff • January 31, 2007

The Regional Greenhouse Gas Initiative (RGGI) places limits on the amount of carbon dioxide that power plants can emit into the atmosphere.,In a move to reduce carbon dioxide emissions statewide, Governor Deval Patrick signed Massachusetts into the Regional Greenhouse Gas Initiative on Jan. 18.

The Regional Greenhouse Gas Initiative (RGGI) places limits on the amount of carbon dioxide that power plants can emit into the atmosphere. Under the initiative, the total carbon dioxide emissions of power plants with a capacity of 25 megawatts or more would be capped at 26.6 million tons per year, beginning in 2009 and lasting through 2014. After that, the emissions cap will be lowered by 2.5 percent each year for the next 4 years.

The initiative also forces such power plants to purchase allowances from the government for every ton of carbon dioxide they emit, with the total amount of allowances equaling the emissions cap. Patrick intends to auction off all the allowances, generating between $25 to $125 million dollars for the state. Patrick also said the revenue would be used to fund programs for renewable energy, energy conservation and energy efficiency.

However, some are skeptical of the initiative because it would raise electricity prices statewide. As power companies are forces to purchase allowances, the cost would simply be passed to the consumers.

"Handled wrong, this could have a devastating effect on all of us here in Masschusetts if we experience higher electricity rates," said Robert Rio, vice president for government affairs as the Associated Industries of Massachusetts.

A fear that the RGGI would raise electricity rates led former Governor Mitt Romney to walk away from signing the initiative in 2005.

Lauren Robbins, a junior WLP major and Earth Emerson president, said that the possibility for environmental change outweighs any future harm to corporate bottom lines.

"In the short term it will negatively affect power companies, but in the large scheme of things it's not a bad thing," she said. "We have to hold them accountable for what they are doing to make the world a worse place."

Patrick has acknowledged that the RGGI would raise electricity prices, though he hopes to offset the cost to residents through the energy conservation programs initiated with the revenue from the sale of allowances.

Another worry is that power companies, feeling the financial squeeze of the RGGI, will move to states where there are fewer regulations. The companies would still be able to sell power to areas with emissions regulations in place, though they would not be subject to the regulations and fees. This could result in economic strife as major industries move out of Massachusetts.

Still others, like the U.S. Climate Action Partnership (USCAP), a coalition of major companies such as Alcoa, BP America, Duke Energy and General Electric, contends that emissions regulations could actually spur economic growth.

USCAP predicts that a cap and trade program, such as the RGGI, would foster new markets for cleaner and more efficient technologies as power companies try to lower their emissions.