Twelve years after it began, the Regional Greenhouse Gas Initiative (RGGI) is still paying dividends to its ten participating states, according to a new report from the Boston-based Analysis Group.
According to the report, the RGGI “added $669 million in net economic value and nearly 8,000 job-years to participating states from 2018 to 2020.” Additionally, the report found that “over its 12-year history, RGGI has contributed to a 46% reduction in carbon emissions, generated $3.8 billion in allowance proceeds, produced $5.7 billion in net economic benefits, and added 48,000 job-years.”
The RGGI is a cap-and-invest program that targets the energy sector, rather than the broader commercial industry. It puts a cap on the amount of carbon emissions allowed by power plants across the region and that cap slowly shrinks over time.
Power plants must obtain an allowance from one of the participating states for each ton of carbon dioxide produced. Those allowances are sold at quarterly auctions by each state. The proceeds are then used by the state to invest in things like environmental justice initiatives and infrastructure updates.
Connecticut is one of the 10 states that have been participating in the program since its inception, along with the five other New England states, New York, New Jersey, Maryland, and Virginia.
Revenues from the program have steadily increased year-over-year since 2016, reaching a period high of nearly $450 million in 2020, the third-highest year on record. Revenues were slightly higher in 2013 and 2015.
While the report doesn’t provide hard numbers for how much Connecticut has brought in on its own, in the three-year period from 2018-2020 New England on the whole saw revenues of $209 million. Judging from a graph of revenues broken down by state, it looks as though Connecticut’s revenues were around $25 million in 2020 after increasing over the three-year period.
As for where those proceeds are going, Connecticut has reportedly invested the majority of its share from 2018-2020 in energy efficiency programs, or around $24 million. Another $6.8 million has been used for clean and renewable energy programs, while $16.3 million was placed into the state’s General Fund. The study did not break down these expenditures by project.
According to the Department of Energy and Environmental Protection, and outlined in a 2022 report from the RGGI, “energy efficiency programs” refers to “programs overseen by the Connecticut Energy Efficiency Board (CEEB) and administered by Eversource Energy and The United Illuminating Company, as well as those of the Connecticut Municipal Electric Energy Collective (CMEEC) and the Town of Wallingford – Electric Division (WED).” These included the Home Energy Solutions Program and the Home Energy Savings Program.
The funds allocated for clean and renewable energy programs were sent to the Connecticut Green Bank, while an additional $2.9 million was used for administrative fees.
In total, the state has “invested nearly $214 million in RGGI allowance proceeds toward programs and services dedicated to the deployment of energy efficiency measures and renewable energy technologies.“
Finally, the remaining funds were “legislatively diverted to CT’s General Fund”
In July of 2022, Governor Ned Lamont committed an additional $3.5 million in RGGI proceeds to support energy efficiency programs for low-income households.