UPDATE: November 15, 2019 – The lifetime totals listed in the originally posted text were wrong due to a copy and paste error.
In October 2019 the Regional Greenhouse Gas Initiative (RGGI) released their annual Investments of Proceeds update. This post compares the claims about the success of the investments against reality.
I have been involved in the RGGI program process since its inception. I blog about the details of the RGGI program because very few seem to want to provide any criticisms of the program. The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.
Background
RGGI is a market-based program to reduce greenhouse gas emissions. It is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector. According to a RGGI website: “The RGGI states issue CO2 allowances which are distributed almost entirely through regional auctions, resulting in proceeds for reinvestment in strategic energy and consumer programs. Programs funded with RGGI investments have spanned a wide range of consumers, providing benefits and improvements to private homes, local businesses, multi-family housing, industrial facilities, community buildings, retail customers, and more.”
Released in October 2019, The Investment of RGGI Proceeds in 2017 report tracks the investment of the RGGI proceeds and the benefits of these investments throughout the region. According to the report, the lifetime benefits of RGGI investments made in 2017 include:
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9 million MWh of electricity use avoided6 million MMBtu of fossil fuel use avoided3 million short tons of CO2 emissions avoided- 13.9 million MWh of electricity use avoided
- 22.6 million MMBtu of fossil fuel use avoided
- 8.3 million short tons of CO2 emissions avoided
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The report’s press release quotes Ben Grumbles, Secretary of the Maryland Department of the Environment and Chair of the RGGI, Inc. Board of Directors: “The 2017 report shows why RGGI is a climate leader globally and nationally, not only cutting emissions in half but generating revenues to strengthen local economies and communities.” Katie Dykes, Commissioner of the Connecticut Department of Energy and Environmental Protection and Vice Chair of the RGGI, Inc. Board of Directors said “RGGI states’ investments accelerate clean energy, reduce climate risk, and improve lives”. Bruce Ho at the National Resources Defense Council blogged that the report “confirms that RGGI is a tremendous success story whose benefits continue to grow, and it shows how, in the absence of national leadership, states are forging ahead to protect our health, environment, and economy from the worst impacts of climate change.”
As I will show below, I disagree with these assertions of success. I believe that the report mis-characterizes some of the numbers relative to the value of the program as an emission reduction approach. This is because they present “lifetime” benefits of the investments. Everyone is talking about emissions reductions from some annual value, usually 1990. In order to determine effectiveness to meet those goals the only benefits that count are annual reductions due to RGGI. While it may be appropriate to document the lifetime dollar savings for energy efficiency, I am convinced that using lifetime values for any other parameter is bogus.
Emissions Reductions
In the first year of the RGGI program, 2009, the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont emitted 123,880,601 tons of CO2. This report was for 2017 and those states emitted 66,349,058 tons of CO2 so emissions the emission reduction was 46% which is close enough to half to accept the claim. However, the real question is why did the emissions go down. I believe that the real measure of RGGI emissions reductions success is the reduction due to the investments made with the auction proceeds.
The report does not provide the annual RGGI investment savings values accumulated since the beginning of the program. In order to make a comparison to the CO2 reduction goals we have to sum the values in the previous reports to provide that information. The table Accumulated Annual Regional Greenhouse Gas Initiative Benefits lists the annual avoided CO2 emissions generated by the RGGI investments from three previous reports as well as the lifetime values. The total of the annual reductions is 2,818,775 tons while the difference between total annual 2009 and 2017 emissions is 57,531,543 tons. The RGGI investments are only directly responsible for 5% of the total observed reductions!
Cost Efficiency
In order to argue that RGGI emission reduction programs are a good investment relative to the expected societal cost of CO2 emissions the Obama Administration developed a value for the social cost of carbon. This parameter was developed to estimate the cost of the long-term (that is to say hundreds of years) damage done by a ton of carbon dioxide (CO2) emitted today. This dollar figure also represents the benefit of a CO2 reduction. I have posted on some of the issues with this parameter but for the purposes of this post you need to know that the values range widely depending on assumptions. For example, if you use a discount rate of 3% and consider global benefits like the Obama-era Environmental Protection Agency (EPA) did then the 2020 SCC value is $50. On the other hand, the current Administration EPA SCC value for SCC is $7 for a 3% discount rate and $2 for a 5% discount rate that represents only benefits to the United States. The Institute for Policy Integrity report “Expert Consensus on the Economics of Climate Change” projected a higher 2020 SCC value of ~$140 based on a survey of experts. A 2015 paper in Nature Climate Change “Temperature impacts on economic growth warrant stringent mitigation policy” suggest that the SCC value should be $220.
The Accumulated Annual Regional Greenhouse Gas Initiative Benefits table lists the data needed to calculate the RGGI CO2 reduction cost per ton. From the start of the program in 2009 through 2017 RGGI has invested $2,527,635,414 and reduced CO2 2,818775 tons annually. The result, $897 per ton reduced, is four times greater than the highest SCC value and two orders of magnitude greater than the current EPA SCC value for United States benefits.
Conclusion
The fact is that for policy purposes the annual reductions from RGGI have to be considered because that is the “apples to apples” comparison. I have to believe the reason why the RGGI investment reports no longer report the accumulated annual benefits and only report the lifetime benefits is because the values appropriate for determining the effectiveness of this program as a control program reflect so poorly on the program. Reductions of CO2 directly attributable to investments made from the auction proceeds only total %5 of the observed CO2 reductions from 2009 to 2017. Those poor results combined with $2.5 billion investments costs result in a nearly $900 cost per ton of CO2 reduced. That value far exceeds the social cost of carbon value contrived to prove the value of CO2 reductions.
Pragmatic Environmentalist of New York 
The following is posted in the article as actionable fact:
“In the first year of the RGGI program, 2009, the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont emitted 123,880,601 tons of CO2. This report was for 2017 and those states emitted 66,349,058 tons of CO2 so emissions the emission reduction was 46% which is close enough to half to accept the claim. However, the real question is why did the emissions go down. I believe that the real measure of RGGI emissions reductions success is the reduction due to the investments made with the auction proceeds.
The report does not provide the annual RGGI investment savings values accumulated since the beginning of the program. In order to make a comparison to the CO2 reduction goals we have to sum the values in the previous reports to provide that information. The table Accumulated Annual Regional Greenhouse Gas Initiative Benefits lists the annual avoided CO2 emissions generated by the RGGI investments from three previous reports as well as the lifetime values. The total of the annual reductions is 2,818,775 tons while the difference between total annual 2009 and 2017 emissions is 57,531,543 tons. The RGGI investments are only directly responsible for 5% of the total observed reductions!”
A person or organization that will claim to know the annual tonnage of CO2 emission of any state or any combination of states with nine significant figures (resolution of +/- 1 ton in emissions in the 1e8 range) and propose to set public policy based on that knowledge is acting on the desire to control policy, not emissions.
Another similar phenomenon is in the reporting of the annual or monthly temperature of the earth. Here is an example:
“The combined average temperature over global land and ocean surfaces for July 2015 was the highest for July in the 136-year period of record, at 0.81°C (1.46°F) above the 20th century average of 15.8°C (60.4°F), surpassing the previous record set in 1998 by 0.08°C (0.14°F). As July is climatologically the warmest month of the year globally, this monthly global temperature of 16.61°C (61.86°F) was also the highest among all 1627 months in the record that began in January 1880. The July temperature is currently increasing at an average rate of 0.65°C (1.17°F) per century.”
The implication of course, in the face of ample historical evidence to the contrary, is that unless we ‘DO SOMETHING’ the rate will continue indefinitely at a linear (minimum) rate or, as often claimed, exponentially. And that the consequences represent an existential threat that MUST be addressed by government action.
Does anyone really believe a planet wide temperature monitoring system has been deployed since 1880 that allows the monthly temperature of the earth for every month since 1880 to be listed in rank order with a resolution of +/- 0.01 degrees. F OR C. And that the accuracy, precision, and implications of the measurements, the behavior of the ‘climate’ under variable stimuluses, an exhaustive list of stimuli that affect climate, and our knowledge of and ability to predict their future values are known with enough confidence that century scale predictions of future ‘monthly temperatures’ and their impacts should be used to set public energy policy today?
Again, there is far more evidence that the purpose of the data is to justify the’setting of policy’ than there is that any proposed energy policy would have any measurable impact, sign OR magnitude, on the Annual/Monthly Temperature of the Earth.
You will excuse me (or not) if I am far more worried about the impact of ‘Climate Policies’ implemented by people willing to make claims similar to those above to justify them than I am about the actual changes in the climate induced by anthropogenic CO2 and the direness of our straits if we question the efficacy of those policies.
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I appreciate your comment and do not disagree with your argument that the precision indicated in the emissions and temperature numbers is exaggerated. I share your worry that climate policies are more likely to be harmful than the actual effects of anthropogenic induced climate change.
However, because I spent years involved with emissions reporting for emissions markets, including RGGI, I want to note that there is a world of difference between the temperature and emissions numbers. One of the fundamental conditions of a market trading program is that the emissions are consistently and accurately measured. There is a tremendous infrastructure built up around insuring that sources reporting to EPA provide consistent and traceable data. All monitored data are submitted along with the calculated emissions and EPA reporting rules demand that everything be consistent with their rules. All the monitoring equipment has to meet strict accuracy standards and has been situated in the stacks following specific requirements. Continued measurement accuracy is assured by strict quality assurance requirements including regular comparison of the stack monitoring equipment with independent tests. Of course, you and I realize that does not mean that the reported values are necessarily accurate to one ton but the numbers are consistent.
On the other hand, the RGGI numbers are a whole lot different than many other emissions estimates. There is no similar set of stringency requirements on CO2 reporting for most other sources.
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I agree that the situation re temperature reporting and emissions reporting are VASTLY different.
The temperature records claims comparison with data going back to 1880 and that Temperature of the Earth data collected today with today’s instrumentation packages and coverage area can be compared meaningfully at the hundredth of a degree range with the data collected by the 19th century instruments, the area that they covered, and the collection techniques employed. Hogwash.
The emissions data is different. Are the reported emissions for the entire state/region, as stated? Are all emission sources within the state/region that are capable of producing annual emissions in the one ton/year or greater range monitored by precision, calibrated instruments or do the emissions reported come from specific, fixed sites that incorporate precision emission monitoring packages as part of their design? Again, two entirely different scenarios. As I read the actual sentence: “In the first year of the RGGI program, 2009, the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont emitted 123,880,601 tons of CO2.” the implication was that all CO2 produced within the entire region was monitored with one ton precision. As written, that is not believable. At least not by me. I DO believe that the CO2 emission of fixed site emitters, monitored by precision, calibrated packages can be monitored pretty accurately. Do I believe that the CO2 content of the stack gas of what may be hundreds of sites (have no idea as to the actual number of sites monitored) was, or can be, monitored over year long time frames with 1e8 precision? Measuring any physical quantity that can vary fairly widely, at varying rates, over year long time frames (except maybe frequency/time) with 1e8 precision is a non trivial task. Is fixed site CO2 emission data over a single year, collected by modern instruments more believable than a table of the monthly temperature of the earth with +/- 0.01 degree precision going back to 1880; absolutely. Is 1e8 precision annual emission data for multiple fixed sites, spread over a multi-state area believable? Can the instrumentation packages, fresh out of the cal lab, make a single one hour measurement of the CO2 emissions of an operational power plant with 1e8 precision?
The power plant at Mount Storm, WV burns around 15,000 tons (1.5e7 kg) of coal/day, from three units. I’m going with metric tons, because the arithmetic is easier. Each kilogram produces a reported (approximate) 1.83 kg of CO2, depending on the specific composition of the coal, which is itself variable. Measuring the CO2 output with 1e8 precision requires that I stick probes into the output stacks of all three units and measure the collective daily 2.75e7 kg of CO2 to +/-275 grams. Can I do this for one day with freshly calibrated instruments? Can I do it every day for a year with instruments on a one year calibration cycle? Do I believe that the total emissions went down fairly dramatically over the period of interest? Of course. Do I believe that reporting the drop with 1e8 precision is justified? I am still skeptical. Reporting the reduction with LESS precision would be just as valid in making the point, and much more believable to folks like me who have had their BS detectors flogged over the years by the climateriat to the point that I am now beginning to question the direction I should face to observe sunrise.
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Thanks for the follow up and sorry I did not respond sooner. As noted previously I was involved in the EPA continuous emissions monitoring system (CEMS) reporting program setup initially for the Acid Rain Program. I won’t argue your concerns about the precision because the methodology to measure mass emissions is filled with monitoring issues. For CO2 mass at a coal-fired power plant they measure the concentration of CO2 and gas velocity in the stack exhaust to estimate the mass emitted. I am not sure the accuracy and precision but as you say it probably is not accurate to the tenth of a ton per hour reported at Mount Storm.
However, for a trading program the accuracy and precision are not as important as the consistency. Every power plant in the country measures and reports its emissions using the same methodology, using equipment that meets the same level of accuracy and precision, and follows the same daily, weekly and annual quality assurance and quality control requirements. For the purposes of the measurements then I argue that EPA CEMS data are consistent across the board and, when compared to reporting from other sectors, are accurate enough for our purposes. So even if the numbers reported are not accurate to within a ton they probably are accurate with 100’s of tons which is sufficient because we worry about millions of tons in any state or country inventory.
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