Massachusetts is leading the way to a clean energy economy and reaping some of the direct benefits in economic growth through smart policies that reduce greenhouse gas emissions by promoting greater energy efficiency, developing renewable energy and encouraging other alternatives to the combustion of fossil fuels. The results clearly disprove the myth that environmental protection hinders economic progress.
The Commonwealth’s success in addressing Climate Change can be seen in a number of areas, such as the implementation of the Regional Greenhouse Gas Initiative (RGGI) and the reduction of its carbon dioxide (CO2) emission cap to 91 million tons per year. All nine RGGI states have now implemented the new emissions cap and are gearing up for the next CO2 allowance auction in March. It is estimated that under RGGI, CO2 emissions will be reduced by 45 percent in 2020 compared to 2005 levels.
MassDEP and its eight RGGI partners are also advocating that the successful RGGI program is an excellent model to control power plant greenhouse gas (GHG) as the U.S. Environmental Protection Agency (EPA) works on a proposal to reduce GHG emissions from existing power plants across the nation.
The proceeds from the RGGI allowance auctions have totaled $252 million for Massachusetts to date, and the reinvestment of a majority of those funds has helped to make Massachusetts the most energy efficient state in the nation during the past three years, as selected by the American Council on an Energy Efficient Economy. With the reduced RGGI cap and the anticipated increase in the allowance price moving forward, Massachusetts can anticipate an additional $625 million in proceeds for reinvestment in energy efficiency and renewable energy by 2020.
The Success of RGGI
RGGI is the first cap-and-invest program in the United States - it caps GHG emissions from the power sector and reduces those emissions by 2.5 percent a year until 2020. The states participating then invest the proceeds generated from auctioning emission allowances back into clean energy programs, which lower overall energy costs and grow local economies.
Within RGGI, Massachusetts has been a leader in energy efficiency. During the first three years of the program, Massachusetts was among the states that invested a great deal of its allowance auction revenues back into energy efficiency. The state is saving energy every year with new energy efficiency investments and programs for residents and municipalities and continues to embrace efficiency as its “First Fuel.”
These diverse programs have saved enough electricity to power nearly 110,000 homes for a year and enough natural gas to heat 15,000 homes for a year. Energy efficiency has reduced greenhouse gas emissions by more than 430,000 metric tons - the equivalent of taking approximately 85,000 cars off Massachusetts’ roads for a whole year. For every $1 invested in energy efficiency, the average benefit for homeowners was $4.17 and for businesses it was $5.10. According to a report by The Analysis Group, reinvestment of allowance revenues stands out as the most economically beneficial use of RGGI dollars and Massachusetts has led the way in this effort.
The EPA is in the process of proposing new regulations to reduce CO2 emissions at power plants across the nation. The RGGI states recently submitted comments to the EPA, recommending that RGGI be used as the national model when EPA implements its carbon reduction rules because RGGI has a proven track record of reducing emissions. RGGI has also created thousands of clean-tech jobs, reduced energy bill by more than $1 billion and added a net of $1.6 billion to the economies of the RGGI states.
New Chairman of the RGGI Board
As the calendar turns to 2014, MassDEP Commissioner Ken Kimmell has taken over as the new chairman of the RGGI, Inc. Board of Directors, and he is focused on advocating that regional cap-and-trade programs such as RGGI should be embraced by the EPA and states as a cost-effective and easy-to-administer program to cut power plant greenhouse gas emissions.
“I’m excited to serve as the new chairman and I look forward to building on RGGI’s success with the other members of the board of directors,” Commissioner Kimmell said. “RGGI serves as a model for the U.S. EPA, as it considers new rules to cut carbon emissions from power plants, and for other states that want to use market mechanisms to lower their greenhouse gases. The RGGI states will play a leading role in showing EPA how a cap-and-trade program can cost-effectively get this job done.”
The states involved in RGGI are demonstrating that environmental protection can go hand-in-hand with economic development and job creation. For more information about RGGI, go to: http://www.mass.gov/eea/agencies/massdep/air/climate/rggi-frequently-asked-questions.html .
In 2008, Governor Deval Patrick signed the Global Warming Solutions Act (GWSA) into law. It established the most ambitious, economy-wide greenhouse gas emission limits for any state in the country and made Massachusetts one of the first states in the nation to move forward with a comprehensive regulatory program to address Climate Change. The GWSA requires all sectors of the economy to reach a 25 percent reduction of GHGs below 1990 levels by 2020 and an 80 percent reduction by 2050. The path to reach those ambitious goals is outlined in the Massachusetts Clean Energy and Climate Plan for 2020. For more information about the Clean Energy and Climate Plan, go to: http://www.mass.gov/eea/air-water-climate-change/climate-change/mass-clean-energy-and-climate-plan.html .
Since the creation of the GWSA, Massachusetts has already reduced its GHG emissions by approximately 10 percent as of 2010, with much greater reductions coming as the new RGGI cap kicks in this year and energy efficiency efforts expand. In addition, Massachusetts has dramatically boosted its renewable energy generation. Due to financial incentives such as renewable energy credits, net metering and long-term contracts, solar energy capacity has grown from 1.64 megawatts (MW) in 2007 to 327 MW in 2013, reaching Governor Patrick’s goal of 250 MW four years ahead of schedule. Wind energy has grown from 1.64 MW to 103 MW in this same time frame, and Massachusetts is vigorously pursuing other clean energy solutions, such as combined heat and power, as well as converting food waste to energy through anaerobic digestion (see related story). For more information on our progress in meeting our 2020 goal, please see the five-year review, which can be viewed here: http://www.mass.gov/eea/docs/eea/gwsa/ma-gwsa-5yr-progress-report-1-6-14.pdf file size 3MB .
The GWSA Dashboard
In addition, the Executive Office of Energy and Environmental Affairs (EEA) recently launched a new Global Warming Solutions Act “Dashboard” - a user-friendly web site to raise public awareness on the status of GWSA implementation. The dashboard provides an estimate of emission reductions achieved to date, and also includes an overview of emissions trends in the state and updated information about each of the strategies included in the Clean Energy and Climate Plan for 2020.
“The new dashboard will communicate the Commonwealth’s progress towards reducing our greenhouse gas emissions and help us shape future GHG reduction policies,” said EEA Secretary Rick Sullivan. “It’s also a great tool to engage the citizens of the Commonwealth so they can monitor, measure and contribute to our work toward meeting the GWSA goals for 2020 and beyond.”
The system is one of the first of its kind nationwide and is expected to serve as a regional and national model that other states can adopt to analyze their efforts in reducing GHG emissions. You can visit the dashboard here:
Growing the Clean Energy Economy
Thanks to all of the state’s efforts, the Commonwealth’s clean energy industry is growing rapidly. Surveys by the Clean Energy Center show that there was an increase in clean energy jobs of 11.8 percent in 2013 and now nearly 80,000 people are working in the clean energy industry in Massachusetts. Since 2011, this growth has outpaced all other sectors of the state’s economy. Clean energy continues to maintain its place as one of the Commonwealth’s marquee industries with 1.9 percent of the total Massachusetts work force.