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Monday, May 21, 2012

Market Plan to cut greenhouse gasses pays off for Rhode Island

RGGI nets Rhode Island $16 million in revenues
By Will Collette

I’m not a big fan of “cap and trade” anti-pollution programs. These programs set a ceiling on how much of a certain pollutant – in this case, greenhouse gasses like carbon dioxide – can be lawfully added to the environment and then require large industrial polluters to “buy” permits to exceed their quotas.

These market-based programs are rely on an acceptance of certain pollution levels and set up a system for industry to buy “licenses to pollute.” But my preferred method of simply mandating cuts in pollution is less palatable in our free market society. So this is what we have.




Rhode Island is part of a 10-state compact called the Regional Greenhouse Gas Initiative (RGGI) that conducts regional “auctions” of licenses to pollute that are bought by large industries that intend to emit large amounts of greenhouse gasses. They bid against each other for these licenses, and that generates cash that RGGI then distributes to the participating states on a proportional basis.

Rhode Island’s share, to date, is $16 million which we then take and invest in projects around the state to save energy and cut greenhouse gas emissions. If you have ever gotten a free “energy audit” through RISE Engineering or one of the other approved vendors, you were tapping into that RGGI money.

We got that done a year and a half ago, and it was great. The RISE technician did a detailed analysis of our home and identified a number of very practical things we could do to cut our energy costs.

They then made a list of both large and small home improvement projects we could do to save energy dollars. A few months later, they called me back to say that they had received new RGGI funding and the larger projects, the ones I couldn’t do myself, were now eligible for a substantial discount.

It was a great deal, and we eagerly took them up on the offer. Their techs came out, did the work and the cost was a few hundred bucks to save at least that much in energy – and the costs were further reduced because they were eligible for a federal income tax energy credit.

RGGI reports that the Rhode Island money went into a variety of large and small projects that boosted Rhode Island economic activity by $77 million – that’s the “multiplier effect” that happens when you invest in infrastructure – creating the equivalent of 630 jobs.

While “cap-and-trade” is a complicated way of solving pollution problems, and I still am uncomfortable with the “license to pollute” aspect of it, there are a lot of tangible upsides to it. Without RGGI, we may or may not have sprung the money to pay for the energy audit, and may or may not have followed through on the improvements called for by that audit.

I had suggested that Charlestown ought to think creatively about its energy issues, especially since we will once again step into the breech at the June Town Council meeting where the 11,658th draft of the dark sky lighting ordinance is scheduled to be heard.

Dark-sky friendly lighting doesn’t have to be primarily driven by an ordinance or town regulations. It could be driven by self-interest, since effective compliance will generally involve using energy efficient lights for fewer hours. If Charlestown made dark-sky lighting town policy (as opposed to town law) and did a better job of public education (and not just preaching), that could set the stage for more community cooperation.

If Charlestown took two further practical steps – one, by lining up discounts for town residents that it could get by asking from the non-profit Energy Federation, and second, by seeking to secure funding through RGGI to help homeowners and businesses convert, only the most ornery, unneighborly property owners would fail to respond.

Rather than try to pass an ordinance that is pointless or unenforceable, why not simply stop thinking about this as a legislative or regulatory problem, but rather as a community problem, and act accordingly?

Here is the two-page summary RGGI releases on how the initiative works in and benefits Rhode Island.