Cap-and-trade is working, analysts say

BOSTON (WWLP) - Economic analysts say the Regional Greenhouse Gas Initiative, the nation's first market-based regulatory program designed to cap and reduce greenhouse gas emissions, is working.

Analysts testified before the Senate Committee on Global Warming and Climate Change in favor of the initiative, also known as the RGGI. They said RGGI has generated nearly $500 million for Massachusetts since the program was implemented three years ago. That money has in turn been reinvested in energy efficiency programs, green community grants, and cities and towns. Analysts said RGGI helps companies proliferate and has created close to 3,800 jobs in Massachusetts.

“What we've seen since this policy has been enacted is many more companies being created, and the ones that are being created are growing faster,” said David Miller, Executive Managing Director of the Clean Energy Venture Group.

“Energy efficiency in particular, we found, was very effective because it not only has this direct investment benefit, but it saves consumers money and so they have more money available to spend in the economy,” said Analysis Group Vice President Paul Hibbard.

RGGI puts a cap on carbon emissions and allows companies to go over their emission limit by buying credits at auction. Proceeds from the auction are in turn re-invested in energy efficiency or other green initiatives.

So far, 10 East Coast states are participating in the program, including Massachusetts. Altogether, they've generated $1.6 billion from carbon credit auctions.