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The Regional Greenhouse Gas Initiative (RGGI) is a cooperative effort by seven northeastern states to reduce global warming pollution. This landmark program will create the nation's first multi-state emissions trading program for carbon dioxide. RGGI was initiated in April 2003, when New York Governor George E. Pataki called on governors of northeastern states to work together to reduce global warming pollution from power plants. Nine governors originally committed to participate in this effort.

From July 2003 until December 2005, these northeastern states participated in a detailed process to develop a framework for the RGGI program. This process included receiving input from a wide range of stakeholder groups and experts and conducting varied analysis on program design. After extended negotiations, seven states—Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont—officially released an agreement about the framework of RGGI on December 20, 2005. Though Massachusetts and Rhode Island were part of the negotiations, they chose not to sign-on at this time.

This agreement calls on these states to stabilize carbon dioxide emissions from the region's power plants at current levels (2005) from 2009 to the start of 2015, followed by a 10 percent reduction in emissions by 2019. In order to accomplish this, the emissions allowed under the new cap will then be divided up into individual permits and allocated by each state. Generators will need to hold a number of permits equal to their emissions. They will be able to trade permits and to offset up to 3.3 percent of their emissions by purchasing "offsets allowances," which are "certified emissions reductions or carbon sequestration that take place outside the electric generating sector."

The states' plan provides a flexible and cost-effective means for companies to achieve their emissions reduction target while simultaneously offering incentives for energy efficiency and renewable energy technologies. However, there is still some work to be done to improve the measure. In particular, there remain large challenges ahead to ensure that RGGI contains strong rules that lower power plant emissions. We expect that there will be continued pressure to create loopholes, such as not counting emissions from increasing electricity imports from polluting coal plants in the Midwest.

Representatives of the seven states will now begin work to create a draft model rule. This model rule will be based upon the just released framework agreement and is intended to detail the specific rules and regulations under RGGI. A draft of this rule is supposed to be released before April 2006. It will be followed by a 60-day public comment period, after which the final rule will be released. Once the states have agreed on the final rules, each state will seek to implement the program before December 2008. UCS staff and activists will work to ensure this initiative is strong and free from  loopholes. 

The RGGI framework also includes a clear method for Massachusetts and Rhode Island to join this effort. Both states were active participants in the design of the RGGI framework. Unfortunately, the states chose to remain on the sideline for the immediate future. Both states can join RGGI simply by informing the other RGGI states of their intention and agreeing to the established rules. UCS Activists in Rhode Island and Massachusetts will play a valuable role in the next year pressuring their states to join this precedent-setting initiative.

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The Regional Greenhouse Gas Initiative

Emissions Trading Systems