Carbon Trading Can Help Struggling Economies

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Carbon trading may hold the key to recovery for struggling economies, claims a new article by UK’s investment website The article comes as a response to a newly published study that sheds light on the significant economic benefits that 10 U.S. states enjoyed as part of the Regional Greenhouse Gas Initiative (RGGI).



The RGGI study is a poof that when compliance cap-and-trade schemes are properly conceived and implimented, monitored effectively and utilised creatively, they can provide invaluable benefits to local economies. today released an article claiming that carbon trading can help national governments cope more effectively with their struggling local economies. Compliance cap-and-trade schemes, states the carbon investments portal, can provide valuable revenue streams and economic opportunities.

The article comes in response to a recently published study by Boston-based research company, Analysis Group. Over the past three years, the study closely followed the performance of the U.S. RGGI—a compliance emissions trading scheme implemented in 2009 across 10 Northeastern and Mid-Atlantic states (Vermont, Rhode Island, Delaware, Maine, New Hampshire, Connecticut, New Jersey, Massachusetts, Maryland and New York). explains that, under RGGI, an annual emissions cap of 188 million tons of CO2 was imposed on power plants across the 10 participating states. This limit will be in effect until 2015, when the carbon quota will gradually go down by 2.5 per cent each year until it reaches its target rate of 10 per cent CO2 emissions reduction by 2018.

Under RGGI, the article further says, power plants compensate for their emissions by purchasing allowances via an auction process and retiring them at the end of each three-year compliance phase (the first one being 2009-2011). reports that, so far, the revenue that state governments generated through auctioning off carbon credits has amounted to about $912 million. The money was utilised differently in each of the 10 states, but some of the programs funded were related to energy efficiency, renewable power initiatives, assisting low-income families with paying their utilities bills, education and job training.

The carbon investment article also states that some of the key findings from the Analysis Group study prove that, since its implantation, RGGI has enhanced local economies by: (1) producing a net present value (NVP) of $1.6 billion (about $33 per capita if spread across the population of all 10 participating states), which led to more purchases of goods and services in the economy; (2) saving businesses, individuals, governments and other energy consumers about $1.1 billion over the three-year period (the article does note that, although initially prices of electricity went up to compensate for the cost of carbon credits, over time, RGGI led to less energy used and lower utility bills); (3) reducing the dependency and costs on outside fossil fuels (the 10 states saved a combined $765 million on imported fossil fuels); (4) creating 16,000 new jobs.

The RGGI study, states, is a poof that when compliance cap-and-trade schemes are properly conceived and implimented, monitored effectively and utilised creatively, they can provide invaluable benefits to local economies, especially in countries facing serious financial challenges. Carbon trading brings in much-needed funding and leaves room for innovative approaches as to how the funds can be best spent, so they can bring positive long-term results for industries, consumers and governments alike.

“Cap-and-trade programs may hold the key to the economic recovery of nations-in-crisis,” says Tonka Dobreva of Dezz, the UK digital media group operating “Governments can -- and should -- take advantage of these new revenue streams and the flexibility spending they offer,” she adds.

You can read the full article and learn more about carbon trading at

About Dezz
Dezz is a UK-based boutique digital media company providing original and reliable up-to-date information in the area of carbon credit trading and sustainable investments to large investment company decision makers, NGOs and to eco-minded individuals. Dezz Limited, 843 Finchley Road, London, NW11 8NA. Registered in England and Wales as a Limited Company. Company Number: 07376661


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