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 the 2009-2012 period.
ClimateWire reports that Brian Murray, the lead author, was surprised by the results, having assumed that RGGI's impact would indeed be limited. Murray speculates that the impact may stem more from the mere fact of RGGI's existence than from the immediate price signals provided by the auctions.
If that's true, it will be interesting to see what the econometric analyses of the Clean Power Plan performed in 2022 say about its early impact on GHG emissions.
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