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Carbon caps help Northeast economy, report says

A nine-state agreement to reduce emissions that cause global warming has netted $243 million for the Massachusetts economy and more than $1 billion for other northeastern states, according to a new report.

Massachusetts collected $166 million from the carbon permitting program from 2012 through last year, according to the report, and it has plowed $152 million back into energy-efficiency programs. After adding and subtracting other impacts, including higher electricity prices, the report said Massachusetts netted $243 million in economic value and 2,718 jobs.

Given the recent electricity price spikes Massachusetts households have endured, the results might seem counterintuitive. But the carbon-limiting program should be measured by what prices might be like without it, said Andrea Okie, an Analysis Group vice president who contributed to the report. If states didn’t reinvest the money in energy efficiency programs, she said, demand for electricity would be even higher.


“Over the long run, this investment and efficiency in renewable energy puts downward pressure on electric prices,” she said.

The Regional Greenhouse Gas Initiative, an agreement by nine states in New England and the Mid-Atlantic regions to cut the carbon dioxide created by their power plants, started in 2009. The states auction off a decreasing amount of carbon licenses every year, and reinvest the money in energy efficiency and renewable energy programs.

Since the program started, the levels of the global warming gases generated by electricity plants has dropped, at least partly due to the replacement of coal plants with cleaner-burning natural gas generators. The study was funded by several foundations, including the Barr Foundation, the Energy Foundation, the Thomas W. Haas Foundation at the NH Charitable Foundation, and the Merck Family Fund.

Jack Newsham can be reached at jack.newsham@globe.com. Follow him on Twitter @TheNewsHam.