Monday February 11, 2013

Massachusetts and its neighbors have long been at the forefront of environmental policies designed to protect the atmosphere from pollutants and encourage use of cleaner forms of energy. Massachusetts and eight other Northeast states that make up the Regional Greenhouse Gas Initiative again established a precedent for the nation Thursday by establishing the country’s first market-based regulatory program for greenhouse gases, one that will both combat global warming and fund energy efficiency programs.

The agreement requires power plants generating more than 25 megawatts of power to purchase an allowance for each ton of carbon they emit into the atmosphere. Plants can buy and sell allowances, giving them an incentive to invest in clean technologies and avoid penalties for polluting. The new rules lower the cap on emissions of carbon dioxide by 45 percent from 2005 levels by next year, and would be lowered an additional 2.5 percent per year from 2015 through 2020. All of the New England states are taking part.

The purchase of allowances is expected to bring in roughly $320 million in revenue through 2020, which will be used largely for environmental programs, such as weatherizing homes and municipal buildings. The Northeast business group Businesses for a Clean Economy has endorsed the plan, asserting it will create more than 16,000 jobs, 4,000 in Massachusetts.

The Associated Industries of Massachusetts says the policy will raise electricity costs for consumers and businesses, which the state Department of Environmental Protection disputes, asserting that the funding of energy efficiency programs will negate price hikes. It is predicting a rise of 39 cents in the $72 monthly bill of an average residential consumer and a hike of $3.89 in the monthly bill of $455 for the average commercial user.

This program is similar to federal cap-and-trade proposals that are routinely stalled in the House of Representatives, along with a variety of other beneficial ideas. The lessons Hurricane Sandy delivered to the Northeast, and President Obama’s determination to put climate change back on the national agenda in his second term, may loosen the environmental log jam, and the U.S. Environmental Protection Agency is planning to issue tougher regulations on power plants. When that happens, Massachusetts and its neighbors will already be embarking upon such a program, one that will take the heat off our atmosphere while helping fund programs that will benefit the environment and consumers for the long term.