As emissions drop, Northeast should tighten CO2 cap

Three and a half years into its implementation, the Regional Greenhouse Gas Initiative is at a surprising crossroads: Industrial carbon dioxide emissions are so far below the original cap that proponents want to drop the limit even lower. The general concept of the program, which Massachusetts played a lead role in forming, is that states from New England down to the Mid-Atlantic set emissions reduction targets low enough to encourage owners of electric power plants to retrofit them to be cleaner or pay for privilege of polluting by buying emissions allowances.

But since the original targets were set, electric generation has shifted significantly from coal and fuel oil to cheaper and cleaner natural gas. While the greenhouse gas initiative encourages this trend, a presumably greater factor is the unexpected “fracking” boom that has yielded vast quantities of natural gas. As a result, emissions are currently running at 36 percent below the cap. “Mission accomplished,” proclaimed the Associated Industries of Massachusetts, obviously relieved that the reductions were more market-based than the result of mandates on companies to make massive infrastructure investments.

Supporters of the initiative, including Kenneth Kimmell, Massachusetts’ commissioner for environmental protection, maintain the cap should be lowered further, to achieve the original purpose of the compact. To date, Massachusetts has garnered $165 million from emissions allowances, which have largely been plowed into residential and industrial energy-saving programs. According to the advocacy group Environment Northeast, if a new cap were reset near the current, better-than-expected CO2 emissions levels, the revenues from allowance auctions could raise another $819 million for energy efficiency programs by 2020.

The initiative should take advantage of shifts in the market — by lowering the CO2 emissions cap to spur a long-term retrofitting of power plants that encourages widespread use of renewable energy in addition to natural gas. The fact that the initiative, one of the nation’s top examples of interstate cooperation on climate change, is at this kind of crossroads is remarkable. Just as emissions are already lower than expected, lower targets still could put the region on an even faster path to carbon neutrality than anyone originally thought possible.