Air quality-related health co-benefits from Pennsylvania’s entry into the Regional Greenhouse Gas Initiative (RGGI)

Abstract

BACKGROUND AND AIM: Climate policies can provide local health co-benefits by simultaneously reducing local and regional air pollutants co-released with greenhouse gas emissions. The Regional Greenhouse Gas Initiative (RGGI) is a regional cap and trade system that seeks to reduce CO₂ emissions from the electric power sector in eleven northeastern and mid-Atlantic states in the United States. Here we focus on Pennsylvania’s anticipated entry into RGGI in 2022. As a major power producer and carbon-emitter in the PJM interconnection (i.e., the Regional Transmission Organization that manages the wholesale electricity market in Pennsylvania and twelve other states), Pennsylvania’s participation affects both the PJM electricity market and the RGGI carbon market. METHODS: By combining a power system model of PJM with a reduced form model of CO₂ emissions abatement from RGGI states that are not in PJM, we first simulate the effects of Pennsylvania’s participation in RGGI on electricity market outcomes, CO₂ emissions, and other local and regional air pollutants. We then use a range of marginal damage estimates derived from reduced-form air pollution models to monetize air quality-related health impacts. RESULTS:Comparing the scenarios with and without Pennsylvania’s participation in RGGI, we find the annual average power sector CO₂ emissions in Pennsylvania to be 40% lower from 2022 to 2030. During the same time period, the annual emissions are 79%, 68% and 76% lower for SO₂, NOx and PM2.5 emissions, respectively. Such a reduction in co-emitted air pollutants leads to cumulative health co-benefits of $17.7 billion to $40.8 billion. However, the reduced emissions and health damages in Pennsylvania are slightly offset by increases in the other states in PJM that do not participate in RGGI. CONCLUSIONS:Our study highlights the large potential for health co-benefits from Pennsylvania’s entry into RGGI, though the cross-state leakage issue requires careful consideration in the policy design and implementation process. KEYWORDS: Air pollution, climate, health co-benefits, policy