Why the Northeast's carbon pricing system matters
The consortium of Northeast and mid-Atlantic states that have a carbon pricing system for power plants is out with a new report that shows there the money raised is going.
Where it stands: States that belong to the Regional Greenhouse Gas Initiative (RGGI), which auctions pollution "allowances" under its cap-and-trade system, have steered a total of $2.4 billion into those areas since the program launched in 2009, the report shows.
Quick take: The report underscores how carbon pricing can raise substantial revenue for initiatives that help reduce emissions, even if the CO2 prices themselves are too low to directly cause changes in the power mix.
- And that has arguably been the case with RGGI, which has seen fairly low prices at its pollution allowance auctions over the years.
- Other forces, namely the rise of cheap natural gas and renewables' growth, have been key drivers of changes to the electricity mix and emissions cuts in RGGI states.