Welcome!

News Feed Item

New Data from Analysis Group Show Limiting Carbon Emissions from Power Plants Continues to Boost the Economy and Create Jobs

The RGGI program's implementation in 2015-2017 generates $1.4 billion in economic benefits for participating states, even as the emissions cap was lowered and pollution allowance costs rose

BOSTON, April 17, 2018 /PRNewswire/ -- The nation's first multi-state cap-and-trade program aimed at controlling carbon-dioxide (CO2) emissions from power plants continues to benefit the economy and boost employment, according to a new report by Analysis Group. Released today, the independent study is based on empirical economic data from the past three years, tracking the impact of the Regional Greenhouse Gas Initiative (RGGI) on the nine participating states - the six New England states plus New York, Delaware, and Maryland.

The report finds RGGI states realize $1.4 billion in net economic value from the program's implementation in 2015 through 2017. The program's implementation over that period also creates over 14,500 new job-years (the equivalent of one full-time job for the duration of one year). All of the participating RGGI states experience benefits, including employment growth and net economic benefits for electricity consumers, with those dollars flowing back into the local economy.

"During this period, the emissions cap for power plants in the region was lowered, and the prices power generators had to pay for emissions rose," said report co-author Paul Hibbard, a Principal with Analysis Group. "Some observers had wondered whether tightening emissions targets would choke off the modest but consistent stream of economic benefits the region has seen since RGGI went into effect in 2009. But that didn't happen: economic benefits and job creation continued, at magnitudes similar to what we've seen in previous study periods."

Previous reports from Analysis Group also found positive impacts from the RGGI program:  the authors' 2015 report found $1.3 billion in net economic benefits flow to RGGI states from program implementation in 2012-2014 (net present value, in 2015 dollars), while the authors' 2012 report found $1.6 billion in net economic benefits from program implementation in 2009-2011 (net present value, in 2011 dollars).

Looking back at nearly a decade of the RGGI program implementation, CO2 emissions from power plants have dropped by over 50 percent, while states accrue net economic benefits on the order of $4 billion and the creation of over 44,000 new job-years. Emissions reductions have come about due to many factors, including the implementation of RGGI.

The new report — The Economic Impacts of the Regional Greenhouse Gas Initiative on Nine Northeast and Mid-Atlantic States: Review of RGGI's Third Three-Year Compliance Period (2015-2017) — will be presented Tuesday, April 17, at the Public Utility Current Issues Conference at New Mexico State University, in Santa Fe, New Mexico.

Among the report's highlights:

  • The RGGI region gains $1.4 billion in net economic value – or $34 in value added per capita – from the program's implementation during the 2015-2017 period. Consumers and the broader economy benefit from states spending RGGI auction proceeds on energy efficiency measures, community-based renewable power projects, credits on customers' bills, bill-paying assistance for low-income ratepayers, greenhouse gas reduction measures, education and job training programs, and other programs.
  • RGGI is boosting employment across the region and in each state, supporting over 14,500 new job-years. Job-years related to RGGI activities include performing efficiency audits, selling products related to energy efficiency and renewable energy, installing energy-efficient appliances and systems, training people on conservation, and working on other energy issues. This increase in employment comes on top of the nearly 14,200 job-years created from RGGI's implementation over the years 2012-2014, and more than 16,000 job-years RGGI created from implementation during 2009-2011.
  • Over the past three years, RGGI has helped to lower the total amount of dollars member states send outside their region in the form of payments for fossil fuels by over $1 billion. RGGI has lowered states' total fossil-fired power production and their consumers' use of natural gas and oil for heating.
  • Energy consumers overall – households, businesses, government users, and others – enjoy a net gain of over $220 million, as their overall energy bills drop over time. Local reinvestment of RGGI dollars in energy efficiency and renewable energy programs tends to offset the impact of increased wholesale electricity prices resulting from the cost of RGGI allowances. Consumers experiencing energy savings tend to invest those extra dollars back into the local economy, serving to further boost local and regional economies.
  • The economic benefits of the RGGI program remained comparable despite higher CO2 allowance prices and lower allowance volumes experienced in the 2015-2017 compliance period. Total auction proceeds for the three-year period were only slightly lower than in the previous two compliance periods, reflecting the offsetting effects of the increase in allowance prices and lower allowance volumes.
  • As a group, power plant owners experience net revenue losses, although owners of nuclear and renewable energy power plants have seen slight revenue gains. While power plant owners in total have recovered the costs of buying CO2 allowances in the short run, they experience lower output and revenues in the long run. Nuclear and renewable owners do not have to buy CO2 allowances and receive the benefit of slightly higher wholesale market prices, netting them slightly higher revenues than they would have in the absence of the RGGI program.

Under RGGI, each year the nine RGGI states offer a declining number of CO2 emission allowances for sale through regional auctions. Owners of fossil-fired power plants buy those CO2 allowances, which authorizes them to emit specific amounts of CO2, or find ways to clean up carbon emissions.

Over nine years of RGGI operations, a total of $2.8 billion in auction proceeds has flowed to member states. Each state decides independently how to spend this money, adjusting spending plans over time to meet shifting objectives and the fast-changing realities of the energy market. The states have sent most of the money raised back into the economy by funding energy-efficiency programs, renewable-power projects, clean-energy career jobs training, and other clean-energy programs.

The Analysis Group report tracks these RGGI-related dollars as they leave the pockets of power companies that buy CO2 allowances, show up in electricity prices, make their way into state accounts, and then roll out into the economy (including in ways that lower customers' electricity bills). These dollar flows have a positive net effect on the region's economy.

The study is unique in its focus on actual, historical flows of payments and economic activity. This includes known CO2 allowance prices, observable CO2 auction results (in terms of prices and quantities sold), dollars distributed from the auction proceeds to the RGGI states, actual state government decisions about how to spend the allowance proceeds, measurable reductions in energy use from energy-efficiency programs funded by RGGI dollars, traceable impacts of such expenditures on prices within the power sector, and concrete value added to the economy over the forecast period (to 2027). 

"RGGI was not designed to be an economic development program. It was designed to cut greenhouse gas emissions, which it is doing successfully," said report co-author Susan F. Tierney, a Senior Advisor with Analysis Group. "But the point of our work is to chart any economic side effects. The data continue to show that cutting carbon emissions can be a net positive for the economy."

RGGI is the nation's first multi-state CO2 emissions control program. The RGGI member states revised the program design in 2014, reducing the regional carbon emissions cap by 45 percent, with a further decrease of 2.5 percent in each following year through the current study period.

The report is being released as RGGI states consider new rules that would reduce the emissions cap further through 2030. Meanwhile, other states are considering setting up their own emissions-control programs or joining RGGI's pioneering cap-and-trade program.

"We hope this report will help inform decision making on the part of state regulators, policymakers, utilities, and other stakeholders," Hibbard said.

The Analysis Group report is an independent project of the RGGI Project Series, and available free for download here: http://www.analysisgroup.com/RGGI

About Analysis Group:
Analysis Group is one of the largest economics consulting firms, with more than 850 professionals across 14 offices in North America, Europe, and Asia. Since 1981, we have provided expertise in economics, finance, health care analytics, and strategy to top law firms, Fortune Global 500 companies, and government agencies worldwide. Our internal experts, together with our network of affiliated experts from academia, industry, and government, offer our clients exceptional breadth and depth of expertise.

MEDIA CONTACTS
CATER Communications
(415) 453-0430
[email protected]

Analysis Group
Eric Seymour
(617) 425-8103
[email protected]

Cision View original content:http://www.prnewswire.com/news-releases/new-data-from-analysis-group-show-limiting-carbon-emissions-from-power-plants-continues-to-boost-the-economy-and-create-jobs-300630796.html

SOURCE Analysis Group, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
In his session at @ThingsExpo, Dr. Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, presented the findings of a series of six detailed case studies of how large corporations are implementing IoT. The session explored how IoT has improved their economic performance, had major impacts on business models and resulted in impressive ROIs. The companies covered span manufacturing and services firms. He also explored servicification, how manufacturing firms shift from se...
"I will be talking about ChatOps and ChatOps as a way to solve some problems in the DevOps space," explained Himanshu Chhetri, CTO of Addteq, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of bus...
For better or worse, DevOps has gone mainstream. All doubt was removed when IBM and HP threw up their respective DevOps microsites. Where are we on the hype cycle? It's hard to say for sure but there's a feeling we're heading for the "Peak of Inflated Expectations." What does this mean for the enterprise? Should they avoid DevOps? Definitely not. Should they be cautious though? Absolutely. The truth is that DevOps and the enterprise are at best strange bedfellows. The movement has its roots in t...
Learn how to solve the problem of keeping files in sync between multiple Docker containers. In his session at 16th Cloud Expo, Aaron Brongersma, Senior Infrastructure Engineer at Modulus, discussed using rsync, GlusterFS, EBS and Bit Torrent Sync. He broke down the tools that are needed to help create a seamless user experience. In the end, can we have an environment where we can easily move Docker containers, servers, and volumes without impacting our applications? He shared his results so yo...
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
The Jevons Paradox suggests that when technological advances increase efficiency of a resource, it results in an overall increase in consumption. Writing on the increased use of coal as a result of technological improvements, 19th-century economist William Stanley Jevons found that these improvements led to the development of new ways to utilize coal. In his session at 19th Cloud Expo, Mark Thiele, Chief Strategy Officer for Apcera, compared the Jevons Paradox to modern-day enterprise IT, examin...
Kubernetes is a new and revolutionary open-sourced system for managing containers across multiple hosts in a cluster. Ansible is a simple IT automation tool for just about any requirement for reproducible environments. In his session at @DevOpsSummit at 18th Cloud Expo, Patrick Galbraith, a principal engineer at HPE, discussed how to build a fully functional Kubernetes cluster on a number of virtual machines or bare-metal hosts. Also included will be a brief demonstration of running a Galera MyS...
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
Digital transformation has increased the pace of business creating a productivity divide between the technology haves and have nots. Managing financial information on spreadsheets and piecing together insight from numerous disconnected systems is no longer an option. Rapid market changes and aggressive competition are motivating business leaders to reevaluate legacy technology investments in search of modern technologies to achieve greater agility, reduced costs and organizational efficiencies. ...
Amazon started as an online bookseller 20 years ago. Since then, it has evolved into a technology juggernaut that has disrupted multiple markets and industries and touches many aspects of our lives. It is a relentless technology and business model innovator driving disruption throughout numerous ecosystems. Amazon’s AWS revenues alone are approaching $16B a year making it one of the largest IT companies in the world. With dominant offerings in Cloud, IoT, eCommerce, Big Data, AI, Digital Assista...
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities. In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, posited that disruption is inevitable for comp...
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, discussed how to use Kubernetes to set up a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace. H...