Maryland and other Northeastern states have helped their economies with "cap-and-trade" regulation of their power plants' carbon dioxide emissions, a new study finds.
In the past three years, the Regional Greenhouse Gas Initiative produced a combined economic gain for the 10 participating states of more than $1.6 billion, or about $33 for every person living in the region, according to a report by the economic consulting firm Analysis Group. The ripple effects of making power plants buy permits to release carbon dioxide also created a total of 16,000 jobs, the consultants estimate.
"The program's working," said Paul J. Hibbard, a lead author of the study, which tracked the impacts of the carbon auctions through the economy. The research was funded by four foundations.
The study projects that consumers across the region are expected to save nearly $1.3 billion on their energy bills over the next decade through government-subsidized investments in home weatherization, energy-efficient appliances and other measures that should reduce demand for power.
The study appears to counter some of the criticism leveled at the regional carbon compact, and at "cap-and-trade" limits in general. New Jersey withdrew from the greenhouse gas initiative this year, and critics have charged that it's ineffective. The Senate balked at passing a national carbon auction plan that had passed the House after critics blasted it as a potential job killer.
The states that saw the greatest return in jobs and savings are those that spent more of their auction revenues on helping homeowners and businesses to reduce their energy consumption.
Maryland got a smaller boost to its economy, for instance, than did states in New England, where 86 percent of the auction proceeds were invested in energy-efficiency incentives. In Maryland, the share earmarked for efficiency incentives went from 46 percent to 17.5 percent, as lawmakers diverted most of the revenues to lowering electric bills for consumers, particularly the poor. This year, 20 percent is being spent on energy efficiency and 20 percent on encouraging "clean" energy.