Regional Greenhouse Gas Initiative

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Regional Greenhouse Gas Initiative
Abbreviation RGGI or ReGGIe
Formation 2003
Type Intergovernmental organization
Purpose Combatting global warming
Headquarters (none)
Participants: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, Vermont; New Jersey until 2011
Observers: Pennsylvania, New Brunswick, Ontario, Québec[1]
Website Regional Greenhouse Gas Initiative
The ten RGGI member states are shown in dark green. Observers are represented in lime green (New Jersey, shown in dark green, was a member until it withdrew effective at the beginning of 2012.

Regional Greenhouse Gas Initiative (RGGI, or ReGGIe) is a regional initiative by states and provinces in the Northeastern United States and Eastern Canada regions to reduce greenhouse gas emissions. The RGGI is designing a cap and trade program for greenhouse gas emissions from power plants. RGGI is a cooperative effort among nine Northeastern and Mid-Atlantic States to reduce carbon dioxide emissions from the electric power sector through coordinated state cap and trade programs. [2] Nine states currently participate in the initiative: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont. Several states and Canadian provinces act as observers: Pennsylvania, Québec, New Brunswick, and Ontario.[1] New Jersey formerly participated, but Gov. Chris Christie removed the state from RGGI in 2011.

RGGI is a cap-and-trade system for CO2 emissions from power plants in the member states. Emission permit auctioning began in September 2008, and the first three-year compliance period began on January 1, 2009.[3] Proceeds are used to promote energy conservation and renewable energy,[4] although as of 2010 three states had used some of the money to balance the overall budget.[5]

The system affects fossil fuel power plants with 25 MW or greater generating capacity ("compliance entities").[3]

Climate Change Action Plan[edit]

A parallel effort to reduce emissions in the Northeast is the New England Governors/Eastern Canadian Premiers Climate Change Action Plan, which calls for a reduction in greenhouse gas emissions to 10% below 1990 levels by 2020. For comparison: the EU aims to reduce emissions to 20% below 1990 levels by 2020 and is deliberating to increase this reduction aim to 30%.[6]

In addition, the Northeast States for Coordinated Air Use Management (NESCAUM) is building a Regional Greenhouse Gas Registry (RGGR) to help track emissions in the region. This effort is similar to that of the California Climate Action Registry.


Early negotiations and setup[edit]

In 2003, George Pataki, then Governor of New York, sent a letter to the governors of Northeastern and Mid-Atlantic states seeking "to develop a strategy that will help the region lead the nation in the effort to fight global climate change."[7]

In August 2005, the RGGI staff working group proposed an emissions reduction program that would start in 2009 and lead to a stabilization of emissions at current levels (an average of 2002-2004 levels) by 2015. This would be followed by a 10% reduction in emissions between 2015 and 2020. The proposal would also allow participants to purchase offsets to meet 50% of their emission reductions.

By December 20, 2005, seven Northeastern U.S. states were involved in the Regional Greenhouse Gas Initiative. Massachusetts and Rhode Island dropped out at the last minute; Massachusetts Governor Mitt Romney objected to a lack of opt-out provisions if energy prices exceeded a certain threshold.[8] He went on to attack Senator John McCain for his positive position on cap-and-trade during the 2008 presidential election.[9] The seven states still involved (Delaware, New Jersey, New York, Connecticut, Vermont, New Hampshire and Maine) signed a "Memorandum of Understanding" committing themselves to move forward with the program. Special provisions were made in that document for Massachusetts and Rhode Island to join the effort at any time prior to January 1, 2008.[10]

Massachusetts rejoined on January 18, 2007, on the order of newly elected Governor Deval Patrick.[11]

On January 30, 2007, Rhode Island rejoined. Governor Donald L. Carcieri used his State of the State address to make the announcement. "I have been assured that those costs can be offset by credits we will receive from other states," he said.[12]

On April 20, 2007, Maryland Governor Martin O’Malley signed an agreement to join.[13]

New Hampshire joined on June 12, 2008, when Gov. John Lynch signed a law implementing RGGI.[14]

Carbon auctions start in 2008[edit]

The Memorandum of Understanding commits states to invest 25% of revenue from carbon credits to energy efficiency and strategic energy schemes.[15] This revenue is received by auctioning credits from the state budget to compliance entities. Since signing the MOU in 2005, all ten states have committed in their Model Rule to the sale of the vast majority of the state's carbon budget. This overcomes the problem of opportunity cost associated with the EU ETS, which led to windfall profits for generators.

RGGI sold carbon credits on Thursday, September 25, 2008, in the first of a series of quarterly online auctions. 12,565,387 allowances were sold for $3.07 per ton of carbon dioxide, bringing in a total of $38,575,738.09.[16] It was the largest carbon auction at the time.[17] The second auction was held December 17, 2008. 31,505,898 allowances were sold for $3.38 per allowance.[18] In the third auction, held on March 18, 2009, 31,513,765 (2009) allowances were sold for $3.51 per allowance, and 2,175,513 (2012) allowances were sold for $3.05 per allowance.[19] The June 17 auction saw 30.8 million allowances sold for $3.23 per allowance, and 2.17 million 2012 allowances sold for $2.06.[20]

Proposed expansion to vehicles[edit]

On December 30, 2009, the governors of the participating states and Pennsylvania signed a "Memorandum of Understanding" to "work to develop a low-carbon fuel standard to reduce greenhouse gas emissions from cars and trucks despite objections from the oil industry." [21] The accord establishes "an early 2011 deadline for a proposed framework to be completed" and mirrors plans in California "to reduce the carbon footprint of transportation fuels." [21]

Departure of New Jersey[edit]

On May 26, 2011, New Jersey Governor Chris Christie announced that his state would pull out of the program by the end of the year. [22] At the same time, the governor pledged to ban coal-fired power plants, and to reach 22.5% renewable generation in the state by 2021.[23]

2013 tightening[edit]

The cap of allowed emissions from regulated power plants was 165 million tons in 2013, but actual 2012 emissions were only 91 million tons. Emissions were lower than previously anticipated due to low natural gas prices prompting a conversion to the lower-emitting fuel, and to a lesser degree energy conservation and the Great Recession. In February 2013, a major change in the RGGI cap was announced, lowering it to 91 million tons for 2014 with 2.5% annual reductions until 2020.[24]

Federal EPA regulation of greenhouse gases under the Clean Air Act was anticipated to introduce a separate set of national standards, which the RGGI system was expected to help power plants in participating states meet.

See also[edit]


  1. ^ a b Regional Greenhouse Gas Initiative (RGGI) - Participating States, Regional Greenhouse Gas Initiative, Inc.
  2. ^ Sopher, Peter. "Regional Greenhouse Gas Initiative: The World’s Carbon Markets: A Case Study Guide to Emissions Trading" (PDF). International Emission Trading Association. IETA,EDF. Retrieved 27 Oct 2014. 
  3. ^ a b Overview of RGGI CO2 Budget Trading Program, Regional Greenhouse Gas Initiative, Inc., October, 2007.
  4. ^ RGGI States Announce Preliminary Release of Auction Application Materials, Regional Greenhouse Gas Initiative, Inc., July 11, 2008.
  5. ^ Concord Monitor: THree states raid anti-pollution funds"
  6. ^
  7. ^ "DEC Announces Final Model Rule to Help States Implement RGGI" (Press release). New York State Department of Environmental Conservation (DEC). August 15, 2006. Retrieved 2007-09-30. 
  8. ^ "Reaction to RGGI". WBUR. 2007-01-19. Archived from the original on September 28, 2007. Retrieved 2007-01-24. 
  9. ^ Hebert, H. Josef (2008-01-24). "Republicans Differ on Global Warming". FOXNews. Retrieved 2009-07-08. 
  10. ^ [1]
  11. ^ "Mass. power plants to pay emissions penalties". Boston Globe. 2007-01-19. Retrieved 2007-01-24. 
  12. ^ Governor Donald L. Carcieri (2007-01-30). 2007 State of the State Address (PDF) (Speech). Rhode Island General Assembly. Retrieved 2007-09-30. 
  13. ^ "Governor Martin O’Malley Signs Greenhouse Gas Agreement, Climate Change Executive Order" (Press release). Office of the Governor (MD). 2007-04-20. Retrieved 2007-09-30. 
  14. ^ "NH governor signs global warming initiative". Boston Globe. 2008-06-12. Retrieved 2008-06-12. [dead link]
  15. ^ [2]
  16. ^
  17. ^
  18. ^ Galbraith, Kate (2008-12-19). "Northeast States Take In $106 Million From Carbon Auction". The New York Times. Retrieved 2010-05-22. 
  19. ^ Auction Results
  20. ^ [3]
  21. ^ a b "Governors sign low-carbon accord". The Hill. 2009-12-30. Retrieved 2009-12-30. 
  22. ^ "Gov. Christie announces N.J. pulling out of regional environmental initiative". 2011-05-26. Retrieved 2011-05-26. 
  23. ^
  24. ^ Beth Daley (2013-02-08). "Mass. to lower cap on emissions by power plants". Boston Globe. 

External links[edit]