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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
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And I'm Melissa Block. Next week, President Obama is scheduled to unveil the centerpiece of his climate change policy. A new rule requiring a reduction in greenhouse gas emissions from power plants. He's expected to ask states to come up with specifics on how to proceed. There's already a lot of debate about the impact the move will have on the economy. As NPR's Elizabeth Shogren reports, some states have already made headway in cutting admissions. And their experiences could be a model for others.
ELIZABETH SHOGREN, BYLINE: In 2005, a group of states in the Northeast and mid-Atlantic agreed to join together to cut their emissions. The nine states now in the program have reduced carbon pollution 40 percent. Their economies have grown. And as for electricity bills, they went up at first but then they went down. Kelly Speakes-Backman chairs the Regional Greenhouse Gas Initiative.
KELLY SPEAKES-BACKMAN: We've gone through the hard part of setting up a program, that we've proven now that works. It's simple. It's cost-effective.
SHOGREN: RGGI is what's known as a cap and trade system. The states auction off permits that allow power companies to emit carbon dioxide. Those companies buy and sell those permits. They need them for each ton of carbon dioxide they emit. Speakes-Backman concedes it was difficult to set up RGGI. There was a lot of wrangling about whether permits would become too costly and whether local economies and consumers would be heard. But since 2009, when RGGI had its first auction, she says those fears haven't been borne out.
SPEAKES-BACKMAN: I would say that the implementation and execution of this has been much easier.
SHOGREN: Much of the auction money has paid for renewable power or energy efficiency. Some has gone to discount electric bills or just into state treasuries. The nine states have exceeded their goals for reducing greenhouse gases, so recently they agreed to more ambitious cuts. One state, however - New Jersey - pulled out of RGGI. Its Republican governor, Chris Christie, calls RGGI a tax and twice vetoed efforts by the state legislature to rejoin Reggie. Other states and power companies have closely watched RGGI. Some push back on participants' rosy version of its accomplishments.
JOHN MCMANUS: The message may be a little misleading.
SHOGREN: John McManus is vice president for environment at one of the country's largest power companies, American Electric Power.
MCMANUS: There have been a lot of emission reductions in the RGGI states that have occurred, but, in large part, those emission reductions have occurred for other reasons.
SHOGREN: Chief among them - cheap natural gas, due to the shale gas drlling boom around the country. Power companies have shifted from coal to natural gas as a fuel to make electricity. And during the recession, people used less electricity anyway. McManus says it doesn't take a cap and trade system like RGGI to get emissions down. He says in the Midwest and Southeast, where missed of his customers live, the company has reduced carbon emissions by a fifth since 2005.
MCMANUS: The biggest factor has been our using more natural gas to generate electricity, relative to coal.
SHOGREN: This is just because natural gas burns were cleanly than coal. And Sue Tierney, who's an energy consultant from Analysis Group, says it's also relatively cheap.
SUE TIERNEY: And that really shifted the ability of natural gas to push out coal from power production.
SHOGREN: Tierney hastens to point out cheap natural gas shouldn't get all the credit for RGGI's success. Investments in energy efficiency and renewable power, like solar and wind, have reduced fossil fuel use. She believes this gives states lots of options to meet the president's goals.
TIERNEY: It's a really, really important thing that the country is about to go through, and I really think it's doable.
SHOGREN: But details of what the president will require aren't out yet. The president has said states will have two years to come up with their plans. But it took RGGI states twice that long to devise a way to do it and that was after they'd committed to cutting carbon together. Elizabeth Shogren, NPR News, Washington. Transcript provided by NPR, Copyright NPR.
