Exit RGGI: The Potential Economic Impact of a Maine Withdrawal from the Regional Greenhouse Gas Initiative
by David G. Tuerck, Paul Bachman, Cristina Crawford
Maine Heritage Policy Center
April 10, 2014
The Regional Greenhouse Gas Initiative (RGGI) is a carbon dioxide cap and trade agreement between nine states in the Northeastern United States. RGGI Inc., the entity that manages the law’s goals, determines a limit on the amount of carbon dioxide (CO2) emitted by all of the regulated electric power plants in the region. Since its inception in 2008, Maine’s qualified electric producers have paid over $48 million dollars to purchase almost 20 million allowances for an average cost of $2.41 each. In 2013, RGGI cut the number of allowances available, increasing allowance prices dramatically. Our findings show that Maine exiting the RGGI program will save affected electricity producers and thus consumers $106 to $132 million from 2015 to 2020; raise employment by an expected 270 to 330 jobs over the period; increase real disposable income by $10 million to $11 million; and boost investment by $5 to $6 million.