Wednesday, December 16, 2009

Maryland Climate Mitigation Program Gets Positive Results

Maryland and nine other Northeastern and Mid-Atlantic states have been participating in the Regional Greenhouse Gas Initiative (RGGI) since September 2008. It is a "cap and trade" regulatory program whereby emissions of carbon dioxide from power plants have been capped and plant operators are required to buy permits for all the gas that their facilities release into the atmosphere. The Center is registered to participate in the RGGI Program.

The U.S. Congres is currently considering legislation in which businesses buy and sell the rights to release greenhouse gases. A climate change treaty is also being considered at the United Nations climate conference in Copenhagen.

The Maryland Energy Administration is investing the proceeds from auctioned permits in helping families and businesses by funding energy efficieincy retrofits. Moreover, power companies in Maryland and the nine other states have been either retrofitting their plants for efficiency or are paying for the rights to emit greenhouse gases for more than a year with slight impact on consumers' electric bills. Some critics of cap and trade have warned that such regulation of greenhouse gases could cripple the U.S. economy, driving energy prices through the roof and putting millions out of work. They also oppose the approach believing it is too complicated and fraught with loopholes to make a real dent in emissions that threaten to drastically alter the world's climate.

But according to Baltimore Gas and Electric Company, its residential customers are paying approximately $1.25 a month more as the costs of the carbon-dioxide permits are passed through to ratepayers. Meanwhile, the state has collected more than $96 million in revenue from the six carbon-dioxide auctions held since September 2008, with some of the funds earmarked for providing relief from energy costs and ultimately reducing greenhouse gas emissions. Specifically, half the funds this year go to help poor families pay their power bills, while nearly a quarter goes to provide a bit of rate relief for all residential utility customers - about 43 cents on the typical household power bill this winter.

Another 18 percent goes into promoting energy efficiency and conservation, with an additional 6 percent earmarked to provide grants and low-interest loans for homes and businesses to install "clean" energy systems. More than 600 Marylanders this year who have received state grants funded in part with carbon-auction proceeds to help them put in home solar, wind or geothermal energy systems.

The price of pollution allowances sold by the states have ranged between $2 and $3.50 per ton, while the Environmental Protection Agency estimates carbon credits would sell initially for $12 to $15 per ton under the more sweeping cap-and-trade approach in the House bill. A congressional budget analysis found that the cost per household in higher energy bills would average $175 a year. The Center offers offsets for $20 per ton. (Balt Sun, 12/16/09)

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