The Economic Impacts of the Regional Greenhouse Gas Initiative on Northeast and Mid-Atlantic States
In 2009, 10 Northeastern and Mid-Atlantic states launched the Regional Greenhouse Gas Initiative (RGGI), the nation's first market-based program to reduce emissions of carbon dioxide from existing and new power plants. With the nine remaining states still participating in the program accounting for more than one-eighth of the US population and more than one-seventh of its gross domestic product, their experience with RGGI is crucial, both for their citizens and as a model for other states as they consider programs of this type.
As part of the RGGI Project Series of independent and nonpartisan research and analysis projects, Analysis Group examined the states' experience with the program during each of three compliance periods (2009-2011, 2012-2014, and 2015-2017). The resulting reports, produced in 2011, 2015, and 2018, analyze in detail the economic effects of RGGI on the participating states, projected to 2027. The Analysis Group teams – which included Principal Paul Hibbard, Vice Presidents Pavel Darling and Andrea Okie, Senior Advisor Susan Tierney, and Associate Sarah Cullinan – found that the states experienced economic benefits in all three compliance periods, while reducing CO2 emissions.
Among the reports' most salient findings are that the RGGI states have added between $1.3 billion and $1.6 billion in net economic value during each of the three compliance periods. Among the other economic benefits are growth in economic output, increased jobs, reinvestment of energy dollars in local and state economic activity, and long-run wholesale electricity cost reductions.
In 2016, Analysis Group also prepared a supplemental report identifying principles and objectives for program design changes that the RGGI member states might incorporate in response to emerging national issues.