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Greenhouse gas auction revenues can help cut Md. electric use significantly, says study
Date:10/22/2008

Matthias Ruth, the principal investigator and director of the Center for Integrative Environmental Research. "Maximizing spending on energy efficiency does pay off in significantly increased benefits and encouraging efficiency accounts for the major part of the state's most recent plans."

The Maryland Department of Environment commissioned the study, "The Role of Energy Efficiency Spending in Maryland's Implementation of the Regional Greenhouse Gas Initiative" to help the state explore the economic and environmental implications of using RGGI revenue in support of energy efficiency programs, as well as to determine the impact on producers, consumers and other stakeholders. The analysis began prior to last month's auction and the study's findings are not based on its results.

"Our study doesn't prescribe a specific investment strategy for the state, but instead provides a yardstick for measuring the impact of investments in energy efficiency," Ruth adds. "The bottom line is that the revenues from the nation's first greenhouse gas auction can be invested to decrease energy consumption and create a positive overall economic impact, all while providing significant environmental benefits. This research should give officials independent confirmation that they're on solid economic ground."

As a member of the 10-state RGGI pact, the state is allocated an annual budget, or a cap, for carbon dioxide emissions allowances. By auctioning these off to energy producers, the state raises money, some of which must be used to benefit consumers.

Using a series of sophisticated modeling techniques, the research team compared the impact of investing half versus all auction revenues in efficiency improvements against a low-investment baseline of one-quarter. These scenarios assume that Maryland will sell off all of its allowances to producers, rather than giving some away. Auctioning a majority of allowances is the "clear trend" among most RGGI states, t
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Contact: Neil Tickner
ntickner@umd.edu
301-405-4622
University of Maryland
Source:Eurekalert

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