The Appalachian Electric Power coal-fired Big Sandy Power Plant in Cattletsburg, Kentucky. Regulations on carbon emissions have reportedly angered politicians in energy-producing states such as Kentucky and West Virginia, but several have already established working models to cut pollution without stifling economic growth.

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The Verdict on Cap and Trade? It Works

Nine states find success at reducing emissions.

Contrary to what you hear from political candidates, cap and trade isn’t just a theory anymore. Its implementation won’t cause rolling blackouts or “catastrophic” spikes on energy bills, as naysayers like Sen. Marco Rubio warn, nor will it “throw countless people out of work,” as former Florida Gov. Jeb Bush predicts; in fact, it will probably lower your electric bill.

Coast to coast, from California to New England, several states have already established working cap and trade models that successfully cut pollution without stifling economic growth. As the Environmental Protection Agency rolls out its final Clean Power Plan, which requires a 30 percent reduction in a state’s carbon footprint by 2030, even more parts of the country may join.

Back in 2009, a group of 10 Northeastern and Mid-Atlantic states joined together in the first regional, market-based program to reduce large power plant carbon emissions. Known as the Regional Greenhouse Gas Initiative (or RGGI, pronounced “Reggie”), the states account for one-sixth of America’s population and one-fifth of its gross domestic product. The consortium sets a limit on the carbon dioxide that can be emitted into the atmosphere — the “cap” — then auctions off the rights to pollute — the “trade.” It’s the same model brokered between conservationists and fiscal conservatives to deal with acid rain under President George H. W. Bush.

How has RGGI fared? Far better than expected. Over the past six years, emissions from electricity usage are down 40 percent from 2005 levels. According a third-party report (funded by four private foundations advocating sustainable energy), RGGI created $1.3 billion in economic benefits just in the last three years, primarily from customer rebates, efficiency improvements and 14,000 new jobs.

Not everyone is sharing the wealth, however. Power plant owners are expected to lose $500 million in revenue through 2025 from lower demand and the price of buying carbon allowances. These effects are partly attributable to a nationwide pivot toward renewable energy, shale gas replacing coal and general mindfulness about waste, but RGGI’s decline in emissions far outpaces the rest of the country, says Katie Dykes, a deputy commissioner for Connecticut’s Department of Energy & Environmental Protection.

“The centerpiece of RGGI’s program design, we auction the majority of our allowances for carbon. The proceeds from those allowance auctions are distributed among all nine states” — one dropped out — “then each state can invest the proceeds in a variety of programs that benefit customers,” Dykes tells NationSwell. “It accelerates this virtuous cycle. Taking these caps, we are generating proceeds and reinvesting in projects that are going to further reduce carbon emissions.”

Historically, economic growth was tied increased emissions: smoggy skies meant wider wallets. But RGGI’s proved those don’t need to be linked. In the Nutmeg State, for example, the Calabro Cheese Corp., a family-owned mozzarella, ricotta and grated parmesan manufacturer in East Haven, got a cut of the allowance proceeds for its 74,000-square-foot facility. Retrofitted lighting, replacement refrigeration motors and evaporator fans, repairs and better insulation all led to an annual reduction of 149,000 kilowatt-hours of electricity — enough power for about 13 homes — and monetary savings of $96,000 every year.

Trading within a larger regional market increases efficiency, Dykes adds. Plus, it’s a more accurate reflection of the way climate change works. Pollution from a coal-burning plant doesn’t hover above one building’s smokestacks; it diffuses into the atmosphere and alters the temperature of the entire globe.

Politics still prove to be an obstacle. Just look at Chris Christie, the Republican governor and presidential candidate from New Jersey, who withdrew his state from the program in late 2011. “RGGI amounted to nothing more than a tax on business that failed to achieve its goals,” a spokesperson for Christie tells NJ Advance Media. Critics “may look at that failed program as a missed opportunity to tax our state’s job creators and yearn to spend more of their money, but that’s simply not acceptable to this governor.”

Christie’s opponents are still furious that the state missed out on millions in savings. But with the EPA’s rules set for implementation, the Garden State and others may have a second chance at improving the air and their economies.

Chris Peak is a staff writer for NationSwell. He previously worked for Newsday, the San Francisco Public Press and the Point Reyes Light. Contact him at [email protected]