When the Regional Greenhouse Gas Initiative was first
implemented, there were questions regarding how much of an impact
it would actually have on GHG emissions. I recall Ian Bowles, then
Secretary of Environmental Affairs in Massachusetts, saying that,
while reductions would happen, the main purpose was to provide a
template and to demonstrate that an emissions trading program could
be implemented successfully.
Those doubts were only heightened when a combination of cheap
gas and the Great Recession were understood to have caused low
allowance prices in the RGGI auction. If allowance prices are
consistently at the RGGI floor, how much of an impact could RGGI be
having?
The answer, it turns out, is much more than we thought.
According to an econometric analysis reported in a recent article in Energy Economics (fee
required), RGGI states' GHG emissions would have been 24%
higher without RGGI, and RGGI explains about half of the
region's GHG emissions reductions over
