Republican presidential candidates wasted no time in decrying President Barack Obama's new regulations to cut greenhouse gas emissions from power plants in near apocalyptic terms. Among those running for president, Sen. Marco Rubio predicted "catastrophic" increases in electric bills, former Florida Gov. Jeb Bush said the rules would "throw countless people out of work," and Sen. Ted Cruz called the plan a "lawless and radical attempt to destabilize the nation's energy system."
Who would possibly stand to live under the kind of regulations Mr. Obama is pushing? If you read The Sun, chances are you already do.
The president's plan will create state-based caps on greenhouse gas emissions from power plants that will amount to a 32 percent reduction on 2005 levels by 2030. Though it doesn't explicitly tell states how to achieve that, the plan is expected to strongly encourage state or regional cap-and-trade systems in which a price is set on carbon emissions and polluters are required to buy credits to cover their activities, with the proceeds reinvested in energy efficiency, carbon-free electric generation and rate credits for consumers, among other things. Maryland and eight other northeastern states have been doing that since 2008 through the Regional Greenhouse Gas Initiative, better known as RGGI.
When it comes to reducing emissions from power plants, cap and trade works. The RGGI states have achieved a greater than 40 percent reduction in carbon dioxide emissions over 2005 levels. In fact, the efforts have been so successful that the consortium last year decided to cut its allowances even further because demand for the carbon credits had plummeted as a result of the switch from coal to natural gas, energy efficiency and other factors. The states are now on track to achieve a 50 percent reduction in power plant CO2 emissions by 2020.
Untangling the impact of RGGI on consumers' electric bills would be a difficult task, given that the collaborative's existence has coincided with the shale gas boom, which has driven down the cost of generation, and with the recession, which helped reduce demand. But it is safe to say it has not led to anything like the doomsday the president's critics are predicting. Average electric bills in the RGGI states have declined by 8 percent since 2008 during a period when the national average bill has not changed. Whatever the cost of the pollution credits, they have been more than made up for by investments in energy efficiency.
And what about the region's economy? A third-party analysis this summer pegged RGGI's benefits at $1.3 billion for the nine states and estimated that RGGI had created 14,000 new jobs.
President Obama's Clean Power Plan is sure to spark vigorous court challenges, particularly from the coal industry, but the bigger risk may be political. Candidates for president will now have to take stands on the issue, putting climate change front and center in a national election in a way that it never has been before. Democratic candidates Hillary Clinton and former Gov. Martin O'Malley have both praised the plan, but given the influence on the Republican field of special interests who oppose action on climate change, starting with the Koch brothers, we're likely to see a fight among GOP hopefuls over who can denounce it in the strongest terms. As Mr. Obama is proposing to act under the existing authority of the 1970 Clean Air Act, a future president could derail the new rules by slowing or stopping their implementation.
But the experience of Maryland and the eight other RGGI states suggests they would be foolish to do so. Republican former Gov. Robert L. Ehrlich Jr. initially kept Maryland out of RGGI for fear that it would drive up electric rates and cause rolling brownouts or blackouts, but by the end of his term, he signed a law that required Maryland's participation. Nearly a decade later, Maryland has a new Republican governor, Larry Hogan, and he's making no move to pull the state out of RGGI. Being part of RGGI "has been useful," Ben Grumbles, Mr. Hogan's secretary of the environment, said in a recent interview with The Sun's editorial board. "It was smart for the state to have been involved."
RGGI has created a virtuous cycle. By putting a price on carbon pollution, it has provided an incentive for industry to find ways to produce less of it, all while raising revenue that has been used to help businesses and individuals increase their energy efficiency. Though opponents are blasting Mr. Obama's action as a federal over-reach, the experience of the RGGI states demonstrates it's anything but. It uses the principles of the market to solve a problem in a way that benefits the economy as a whole. It works here, and there's no reason to believe it won't work for the rest of the nation.