Massachusetts power plant owners will have to pay a penalty for every pound of emissions that contribute to global warming under an agreement signed by Governor Deval Patrick yesterday that is expected to raise hundreds of millions of dollars for an ambitious energy conservation and renewable energy program.
Patrick agreed to rejoin the seven-state Regional Greenhouse Gas Initiative, which aims to gradually reduce the production of greenhouse gases in the Northeast. Reversing his predecessor Mitt Romney, who pulled out of the pact over concerns that the emissions fee would drive up the already-high price of electricity, Patrick predicted that electricity costs would ultimately drop because the penalties would generate up to $125 million a year to spend on conservation.
“Climate change is one of the most pressing challenges of our time,” Patrick said at a press briefing at the University of Massachusetts at Boston. “On this day, we want everyone to know that Massachusetts will not stand on the sidelines.”
The new governor also announced that he would set aside $17 million to increase the purchase of renewable energy for use by state government.
Patrick’s announcement puts him at the forefront of a growing movement in states and the new Congress to take stronger action against global warming, which scientists say is largely driven by human releases of carbon dioxide from burning coal, oil, gas, and other fuels.
As leader of the state with the biggest energy demand in New England, Patrick’s move could influence other states as they decide how to implement the carbon dioxide fees called for in the greenhouse gas initiative. Under the agreement, Patrick could have simply given power plants permits for most of their carbon dioxide emissions, but he decided to make them purchase all the permits at a regional auction, raising more money for energy projects.
Vermont and New York have already decided to use that approach, but the four other participating New England states haven’t taken a final position. Rhode Island is the only state in the region not taking part.
“What a breath of fresh air to switch from our previous governor who walked away from the climate crisis altogether,” said Brian Thurber of Clean Water Action, one of many environmental groups that sang Patrick’s praises yesterday. “Massachusetts is usually a regional and national leader on air pollution and energy issues. It’s nice to be back in the game.”
But power companies and many large electricity users, who have opposed the carbon dioxide charge, remain wary about Patrick’s plan. A spokesman for Associated Industries of Massachusetts said the group knows that the new fees are inevitable, but its leaders declined Patrick’s invitation to attend yesterday’s announcement because they don’t want to appear overly supportive.
“At this point, we’re for making this thing work because we have to, but we are not for having this done the wrong way,” said Robert Rio , vice president for government affairs at the association. He said any money raised from the initiative should go directly to projects that lower overall energy costs.
Under the agreement Patrick signed, Massachusetts power plants with a capacity of 25 megawatts or more would face an overall cap of 26.6 million tons of carbon dioxide released into the air in 2009, a limit that would require little, if any, immediate cuts in emissions. Plant owners, however, would have to buy credits at a regional auction for each ton of carbon dioxide they release. Though no one knows what the price will be, a credit for a ton of carbon dioxide now sells for about $4 in Europe, which already has a carbon dioxide-control system.
Money from the sale of credits – estimated to total $25 million to $125 million a year for Massachusetts, depending on the auction price – could be invested in such projects as installing energy-efficient streetlights or a computerized system that would allow utilities to automatically turn down major customers’ air conditioning to reduce energy demand on the hottest days. Patrick estimated that the average family will initially pay about $3 a year more for electricity because of the program, but within a few years, they could be saving $70 or more due to energy conservation efforts.
States in the greenhouse gas initiative would have to gradually reduce carbon dioxide emissions starting in 2015, and by 2019, the cap will be 10 percent lower. If the cutback is achieved, that would mark a striking turnaround from current trends: Carbon dioxide emissions have been rising steadily since 2001 throughout the Northeast.
Ian Bowles , the environmental affairs secretary, said important technical issues need to be resolved before the carbon dioxide limits go into effect, but, fundamentally, he said the charge for carbon dioxide emissions will give power companies new incentive to use less coal, oil, and natural gas, and more wind, solar, and other forms of power that do not release carbon dioxide.
Bowles, however, agreed that efforts by the Northeastern states alone won’t be enough to stop global warming. “The Regional Greenhouse Gas Initiative is an important first step, but the US needs a federal policy here,” he said.
By Scott Allen, Globe Staff