Maryland Community Newspapers Online
As our nation debates the most efficient way to reducegreenhouse gas emissions that are causing global warming, Maryland and nine other states have a program underway showing one way it can be done.
Last week, the 10 Northeastern and Mid-Atlantic states participating in the country's first mandatory carbon cap and trade program — Connecticut, Delaware, Maine, Massachusetts, Maryland, New Hampshire, New Jersey, New York, Rhode Island and Vermont — announced that the Regional Greenhouse Gas Initiative's first auction was off to a strong start.
RGGI is designed to reduce global warming emissions from electricity generation in two ways. First, a cap is placed on the largest sources of greenhouse gas emissions: electricity generators. Emissions from power producers will be capped at current levels through 2014. The cap will then be reduced 10 percent by 2018. Second, by requiring electricity generators to pay for an allowance for each ton of carbon dioxide they emit, RGGI will generate an unprecedented level of investment in energy efficiency programs to lower energy consumption and reduce greenhouse gas emissions.
In the first RGGI auction held in September, 12.5 million allowances were auctioned. At the final selling price of $3.07 per allowance, not only was the price consistent with projections, demand for carbon allowances was also four times higher than supply. This signals a strong market and a strong program.
As a result, Maryland will invest $16.4 million in programs to promote cleaner energy sources, energy efficiency and conservation, and provide rate relief for low- and moderate-income households, all of which will go a long way to fight climate change and lower our electricity bills.
The Maryland Strategic Energy Investment Fund allocates 17 percent of the revenues to low-income energy assistance (through the Electric Universal Service Program); 23 percent to residential rate relief; 46 percent to energy efficiency, conservation, and demand response programs; and 10.5 percent to promoting clean energy and running the RGGI and other climate change programs.
Last week's RGGI auction was several years in the making. In 2006, the General Assembly passed the Healthy Air Act requiring Maryland to join RGGI if it could be demonstrated that doing so would be beneficial. A subsequent study by the University of Maryland showed that joining RGGI would have a limited impact on the economy and electric power markets in Maryland but, overall, would provide a net benefit to consumers in the form of savings on their electricity bills. Gov. Martin O'Malley officially signed Maryland up to join RGGI in April 2007.
More than five years of planning, modeling and consultation went into designing this program to reduce greenhouse gases at the lowest possible cost while encouraging the development of a clean-energy economy. Maryland's Climate Action Plan lays out a road map of 42 options for reducing greenhouse gas emissions; RGGI is just one tangible example of these. In Maryland, we have turned the corner from planning and talking about reducing greenhouse gas emissions to implementation.
Other states are following suit. More than 20 other states have similar plans to address climate change.
Shari T. Wilson is secretary of the Maryland Department of the Environment.
