Regional Greenhouse Gas Initiative

The Regional Greenhouse Gas Initiative (RGGI, or ReGGIe) is a regional cap-and-trade program that caps power sector CO2 emissions and mandates a 10% reduction by 2018.  It includes ten northeastern signatory states, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont.  Pennsylvania also participates as an observer.  The ten individual state programs are compatible in order to create a unified regional compliance market for greenhouse gas emissions.

The RGGI program sets a multi-state CO₂ emissions cap that will gradually be lowered until total covered emissions decrease by 10 percent.  All electric power generators in the region are required to hold allowances covering their CO₂ emissions.  They may buy, sell and trade allowances through the RGGI auction and trading system.  RGGI puts proceeds from auctions of emissions allowances towards improvements utilizing energy efficiency and clean renewable energy.  Under RGGI, companies may use offsets from sources outside the electricity sector to fulfilll their obligations.  The RGGI sets "modest" initial targets in order to achieve what it calls "predictable market signals" in order to prevent undesirable uncertainty and volatility in the electricity market.

Participating states distribute the majority of their allowances at quarterly online RGGI CO2 auctions.  At the first auction, held in September 2008, 12,565,387 allowances were sold at $3.07 per ton/ CO₂, for a total of $38,575,738.09.  At the time, this event was the largest carbon auction ever held. 

About RGGI