Fast Company June 2017
RGGI was formed in 2008 and is comprised of nine states: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont (New Jersey participated until 2011, when Governor Chris Christie pulled his state from the coalition). The participating states set an annual carbon cap for the region, and divide the total allotted emissions for the energy sector into allowances, that power plants purchase through quarterly auctions. If the annual cap is 80 million tons of CO2, RGGI will make 80 million allowances, totaling 1 million tons each, available for purchase, Stutt says. The money pulled in through the auction is then divided among the states, which reinvest the funds in local clean energy initiatives and infrastructure needs.
In the eight years since RGGI was implemented, emissions from the region’s power plants have dropped 40%. While factors like fuel switching to cheap natural gas and the economic downturn have played a roll in driving those emissions down, an analysis from the Duke University Nicholas Institute for Environment Policy Solutions attributed the bulk of the reductions to RGGI. An analysis from Acadia Center also found that the changes in the electricity sector that were driven by RGGI–namely, a switch from more carbon-intensive fuels to cleaner sources–have resulted in $5.7 billion in avoided health impacts in the region. Asthma cases are down, as are cardiac issues and costly emergency room visits. Fewer children are missing school; fewer people are missing days of work.
By putting a strict limit on emissions, and making power plants shell out money to continue carbon-emitting operations, RGGI creates a market incentive for companies to curb their emissions by switching to sustainable energy. Those companies that require fewer carbon allowances save money in the auction process, and if they don’t use up their allowances, they can sell shares on the market for an increased price. Those companies that exceed the emissions allowances they purchase in auctions must pay a penalty, which generates more revenue for the program.
While RGGI regulates only the energy sector–the largest CO2 emitter in the U.S.–California’s cap-and-trade program, which was passed in 2006, extends to nearly every sector of the state’s economy. It’s funneled billions of dollars into state projects to reduce emissions–Governor Jerry Brown intends to use cap-and-trade money to finance a high-speed rail link between San Francisco and Los Angeles–and is well on its way toward achieving its goal of reducing carbon emissions by 40% below 1990 levels (a much more ambitious goal that the one laid out by the Clean Power Plan).“States are looking to these programs; they don’t want to be missing out on all the benefits the RGGI states and California have been seeing for revenue to be reinvested in clean energy initiatives and infrastructure needs,” Stutt says. While cap-and-trade has proven effective in the RGGI states and California, and it’s likely to be the model that Virginia pursues (Stutt met with legislators in the state as far back as two years ago, as they were gauging the possibility of Virginia becoming part of RGGI), NextGen Climate founder and philanthropist Tom Steyer–who has considered running for governor of California–tells Fast Company that “there is no one magic bullet” that will dictate how states drive clean energy policies going forward. “The unending increase in the efficiency and effectiveness of technology is driving down the cost of renewable energy sources like wind and solar dramatically,” Steyer says. Unlike coal, whose price continues to rise as its supply constricts, renewable generation can proliferate with no harm to society, and states on both sides of the political divide are responding to the favorable market conditions.
“One of the most exciting parts of these state-level developments is the opportunity to think about how what you’re building in your own state can become a part of a broader regional or national strategy, and acknowledging that there are increased efficiencies and flexibility that comes from a larger market,” says Pam Kiely, the senior director of regulatory strategy at the Environmental Defense Fund. With Virginia perhaps looking to join RGGI or develop a similar program, and Oregon taking steps to develop a policy that would be compatible with California’s cap-and-trade initiative, the benefits of collaboration and cooperation in developing these policies is clear.
And while there’s a great deal of potential for states to drive emissions-reduction targets beyond those which were mandated through the Clean Power Plan, the slow cohesion of state policies, to Kiely, underscores what will be lost should the national plan be scrapped. “The Clean Power Plan was and remains critically important to ensuring that there is certainty about the pace and scope of emissions reductions that are going to be achieved across the country,” Kiely tells Fast Company. “It’s critical to provide that level of confidence around the ambition for those reductions, and what this sector in the U.S. is going to be able to accomplish.”
While currently, those states most aggressively pursuing cap-and-trade and other carbon-reduction policies are blue states, both Kiely and Stutt emphasize that support for clean energy policies extends across political divides. RGGI was proposed by a Republican, former New York governor George E. Pataki, and John Kasich, the Republican governor of Ohio, vetoed an attempt by the state legislature in December to make the state’s renewable energy standards voluntary, saying to roll back the renewable energy policy would hurt Ohio’s economy (the legislature is continuing to fight the veto). And some of the strongest supporters of wind energy come from states like Iowa and Texas, where the availability of natural resources has driven the cost of renewables down. In Iowa, the cost is so dramatically lower that to do anything other than integrate wind into the energy landscape would put the state at an economic disadvantage–and powerful Iowa Republican Senator Chuck Grassley is strongly in support of increasing the amount of wind power the state produces.While directives like the recent one out of Virginia signal that the states will not be abandoning climate regulation under Trump, it’s crucial that whatever policies the states implement will have designed into them mechanism that allow them to adapt and cooperate with other state programs as they develop, Kiely says. The programs that are effective, or will prove to be in the future, follow roughly the same formula of a clean energy goal and an incentive program to reduce emissions; what needs to happen now, Kiely says, “is for existing programs to figure out how to accommodate new participants, and for new programs and players to think ahead about what types of design features are going to be necessary in order to take advantage of a broader market down the line.”
In place of a sweeping Clean Power Plan, we could be looking at a future of interconnected, state-led emissions-reduction programs, and experts like Kiely are hopeful that this flexible structure could lead to more innovation, a more rapid rollback on our carbon dependence–and a firm state-by-state refutation of Trump’s anti-climate warpath.
Large or small, cities commitments to 100% renewables matter
Atlanta has a Democratic mayor and a fairly progressive city council; Abita Springs leans older and more conservative with a Republican mayor. But for both places, the decision was more about economic development than climate change. And in order for these goals to be more than symbolic, utilities and cities must change how they run – especially in a place as large as Atlanta.
“Setting aspirational goals like this are very important because they send market signals, political signals, and they are the environmentally right thing to do,” said Stephen Smith, executive director of the Southern Alliance for Clean Energy. “I think that the goal setting is the first step. The implementation is the devil is in the details.”
Currently, 27 cities across the country have committed to powering completely with renewables, and only four cities – Aspen, Colorado; Burlington, Vermont; Greensburg, Kansas and Georgetown, Texas – power all of their electricity with renewables. Late last year, St. Petersburg, Florida, became the first Southeastern city to make the pledge, and Boone, North Carolina quickly followed. Now, more cities are taking interest.
“It’s an interesting narrative about leadership cities can have in crafting their own destiny when it comes to energy policy,” said Katie Ottenweller, senior attorney and leader of the Southern Environmental Law Center’s solar initiative. “It’s a testament to market forces regardless of what is going on in DC or in state capitals or in board rooms of investor-owned utilities.”
A huge shift for Atlanta
In early May, Atlanta City Council member Kwanza Hall – who is also running for mayor – introduced the renewable energy resolution just a month after he made controversial comments about climate change. It passed unanimously.
Atlanta plans to power all of its municipal facilities— city buildings, airport, libraries, water treatment plants —with clean energy by 2025. That will extend to the rest of the city, including churches, universities, homes, and businesses, by 2035. “It’s a lofty goal,” said Sam Shelton, engineer at the Georgia Tech Strategic Energy Institute.
Transportation is left out of this picture, said Colleen Kiernan, policy director for Hall’s office, but it’s something the council is “interested in tackling.” She said that MARTA, Atlanta’s public transportation system and the city’s biggest electricity user, is involved in discussions about electric buses. But experts say that leaving out transportation, especially in major cities with a high carbon footprint, makes it impossible to be 100 percent renewable, so electric vehicles are an important part of the process.
This year, Atlanta’s city energy committee will gather data to determine how many renewable energy projects are needed to generate enough electricity. Georgia Power is the electricity provider, and while it primarily uses coal fired power plants, the utility ranks among the top in the country for solar capacity, with over 850 megawatts installed and plans to nearly double that by 2021.
Community solar and behind-the-meter options are growing more slowly; Georgia Power has a low buyback rate and limits rooftop solar array sizes. Although Atlanta’s resolution sends a powerful signal to the utility, Ottenweller said, the city is reliant on Georgia Power to make changes so the 2035 goal can be met. “[Atlanta] may not necessarily have as much say over energy generation in the immediate term.”
The lack of affordable battery storage technology is another. “There’s a lot of technology development that has to happen between now and that deadline that improves technology and makes it cheaper,” Shelton said. “There’s a limit to what taxpayers will pay to see clean energy versus dirty energy.”
More possibilities for small towns
Abita Springs, perhaps best known as home of the Abita brewery, is about an hour north of New Orleans. Mayor Greg Lemons was well aware the U.S. is moving toward renewable energy, despite Louisiana’s oil and gas interests, so he recently created a town committee for energy and sustainability.
Then, in March, he signed the proclamation to go 100 percent renewable by 2030. “There has to be a balance between the environment and business,” Lemons said. “I had no clue how to get [to 100 percent], but the way I work is one bite of the elephant at a time.”
Initially, the committee is focusing on revamping town hall, replacing regular lightbulbs with LED bulbs and making the building more energy efficient. Lemons plans to put rooftop solar on all municipal buildings, install electric vehicle charging stations, and power the town’s 265 street lights with solar panels.
Cities and municipalities that are powered by electric cooperatives or their own municipal utilities have more control and can make these changes much easier, though it depends on the contractual arrangements that cooperatives have with utilities on how they get their power. Abita Springs, however, relies on its primary utility provider, Cleco, to make the shift. Lemons is working with Cleco on solar farm opportunities nearby, where there’s several hundred acres of unused farmland. Cleco also started a net metering program with its customers in 2016. Last year, Louisiana did away with its tax credits for solar customers, but Lemons said there are many people in town who want to add solar to their homes or already have rooftop panels. Like Atlanta, money and technology are the biggest hurdles for Abita Springs. Lemons also said there’s some pushback from people in the community who he says aren’t as forward-thinking about renewable energy. “But if Abita Springs can do it, every small town in the state of Louisiana can do it,” he said.
Renewable energy advocates say that these commitments – whether they will be met by the target date or not – signal an important shift in the Southeast. “When I see a smaller city, especially in a rural area making a commitment to clean energy, it’s a more powerful indicator of where America is at,” Ottenweller said. “In some ways, in the South it’s even more compelling that they may not be motivated by climate change.”