Calculating the Health Benefits of the Regional Greenhouse Gas Initiative

The implementation of a carbon cap and trade program is often put forward by policy makers as a potential market-based solution to reduce greenhouse gas emissions (GHG) in the United States. Instead of waiting on the federal government, in 2009, several Northeastern states initiated their own cap and trade program called the Regional Greenhouse Gas Initiative (RGGI). In addition to achieving GHG emissions reductions, member states raised nearly $3 billion in revenue through CO2 allowance sales during the first six years. This revenue supported states’ investments in energy efficiency, renewable energies, and other public programs. As a result, RGGI states and neighboring non-RGGI states have seen significant health benefits, especially in respiratory health, due to these GHG reductions. The value of these health benefits is estimated to be as much as $8.3 billion, which is significant evidence that reduced GHG emissions, as a result of the RGGI program, not only improved the environment, but also produced quantifiable health benefits for the region.

A recent study quantified these particular health benefits, in both RGGI and neighboring states, over the first six years of the program by measuring the amount of harmful pollutants emitted into the air, including nitrous oxides (NOx), sulfur dioxide (SO2), and particulate matter (PM2.5). To estimate these health benefits, the authors first calculated the reduction in emissions and then used the resulting data to analyze air quality. Given the air quality improvements, the authors then estimated the regional health benefits and their value. The study shows that incremental reductions in power plants’ annual generation has been another effect of the RGGI. Reductions ranged between two and seven percent, with the most significant reductions occurring in 2009, 2013, and 2014. These reductions led to lower levels of emissions and were attributed in part to the investment of CO2 allowance monies in energy efficiency and renewable energy technology. Another contributing factor was a lower demand for electricity as a result of higher costs to consumers due to companies passing on the cost of CO2 allowance purchases.

Using historical plant-level emissions data from the Environmental Protection Agency (EPA), the study estimates emissions reductions based on the decrease in electricity generation at each RGGI-affected plant. The study finds that RGGI resulted in incremental air quality improvements in both RGGI states and downwind states by significantly decreasing NOx, SO2, and PM2.5 emissions. Nitrous oxide levels decreased nearly 14,000 metric tons in 2013, SO2 emissions decreased by more than 76,000 metric tons in 2009, and every participating state saw reductions in average PM2.5 levels over the first six years of RGGI.

Emissions figures were then used as inputs into EPA’s COBRA model to estimate spatial air quality changes resulting from the emission of the aforementioned pollutants. Subsequently, that data was inetgrated into the BenMap model to quantify the GHG emissions reductions’ economic value in terms of health impacts. The authors estimate that RGGI’s cumulative impact, including benefits to downwind states, prevented between 300 and 830 adult deaths from 2009–2014. This avoided premature adult mortality accounts for 98 percent of the total value of the health benefits. In addition, the study estimates that RGGI provides significant benefits to the regional economy by preventing roughly 39,000–47,000 lost work days and at least 240,000 days of restricted activity due to air quality concerns.

This study of RGGI provides an important conclusion that reducing emissions not only provides environmental benefits but also significant health benefits. This analysis estimates that RGGI prevented up to 390 non-fatal heart attacks, 230 asthma related ER visits, and 9,900 asthma exacerbations. Furthermore, the study demonstrates positive externalities of the trading system to surrounding non-RGGI states that are affected by the dispersion of pollutants resulting from fossil-fuel power plants. Collectively, these benefits far outweigh the cost of implementation and are one example of a cap and trade program’s ability to provide health and economic benefits.

Note: Abt Associates, the publisher of the original source for this article, is a for-profit organization.

Article source: Manion, Michelle, et al. “Analysis of the Public Health Impacts of the Regional Greenhouse Gas Initiative, 2009–2014.” Abt Associates, 2017.

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