The Regional Greenhouse Gas Initiative (Rggi): What Is It?

The Regional Greenhouse Gas Initiative (RGGI) is a cooperative effort among eleven Eastern states, including Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont, to reduce CO2 emissions from power plants. RGGI is the first mandatory cap-and-trade program in the United States to limit carbon dioxide emissions from the power sector. Eleven states currently participate in RGGI, including Maine.

RGGI is a “cap-and-invest” program that sets a regional limit on the amount of carbon pollution that power plants are allowed. It was launched in 2009 and is the first mandatory GHG ETS in the United States. It started operating with ten states and sets a cap on emissions of carbon dioxide (CO2) from fossil fuel-fired power plants with a capacity of 25 MW or higher.

RGGI has been beneficial to the states that participate for several years, creating a market for emissions allowances through a regional cap-and-trade program for greenhouse gas emissions from area power plants. The initiative has saved consumers by reducing CO2 emissions from power plants and investing in clean energy.

Despite facing challenges in the South, RGGI has been successful in reducing heat-trapping gas emissions and creating a market for emissions allowances through a regional cap-and-trade program for greenhouse gas emissions from area power plants.

Who does RGGI apply to?

The Regional Greenhouse Gas Initiative (RGGI) is a joint effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont to reduce power sector CO2 emissions. The initiative is composed of individual CO2 Budget Trading Programs in each participating state, which limit emissions from electric power plants, issue CO2 allowances, and participate in regional CO2 allowance auctions.

RGGI is the first market-based, cap-and-invest regional initiative in the United States, requiring fossil-fuel-fired electric power generators with a capacity of 25 megawatts 1 or greater to hold allowances equal to their CO2 emissions over a three-year control period.

How effective is the RGGI?

The Regional Greenhouse Gas Initiative (RGGI) has significantly reduced emissions and investments in clean energy in 11 US states. Fossil fuel emissions dropped 90% faster than anywhere else in the country, and power sector emissions decreased by 40% from 2009 to 2014. This led to reduced utility costs, improved public health, and fewer premature deaths, hospital visits, and lost work or school days associated with respiratory illnesses, strokes, and heart attacks.

RGGI will continue to play a crucial role in addressing climate change, with participating states making significant progress in reducing emissions, protecting the environment, boosting jobs, and improving people’s lives.

Where does RGGI money go?

The Regional Greenhouse Gas Initiative (RGGI) states distribute CO2 allowances through regional auctions, reinvesting them in energy and consumer programs. These investments benefit local businesses, low-income communities, industrial facilities, and households. In 2022, RGGI investments resulted in $1. 8 billion in lifetime energy bill savings and 7. 5 million short tons of CO2 emissions avoided. The Investment of RGGI Proceeds in 2022 report tracks these benefits.

What is the greenhouse initiative?

The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory market-based program in the United States to reduce greenhouse gas emissions. It is a cooperative effort among 11 states, including Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia, to cap and reduce carbon dioxide emissions from the power sector. Compliance obligations apply to fossil-fueled power plants 25 megawatts and larger within the 11-state region.

Pennsylvania’s participation in the RGGI cooperative was ruled unconstitutional on November 1, 2023, although that decision has been appealed. North Carolina’s entrance into RGGI has been blocked by the enactment of the state’s fiscal year 2023–25 budget. RGGI establishes a regional cap on CO2 pollution by issuing a limited number of tradable CO2 allowances, which are distributed through quarterly auctions. These proceeds are used to invest in strategic energy and consumer benefit programs, including energy efficiency, clean and renewable energy, greenhouse gas abatement, and direct bill assistance.

How do RGGI auctions work?

The RGGI states distribute allowances at quarterly auctions, which can be purchased by power plants and other entities. A limited number of allowances are held in set-aside accounts by some states for the purpose of fixed-price sales or distribution outside the auction process.

Who created RGGI?

In 2005, seven states agreed to implement the Regional Greenhouse Gas Initiative (RGGI) through a Memorandum of Understanding (MOU). The MOU, amended in 2006, provided the outlines of RGGI and a framework for a Model Rule. In 2007, Massachusetts, Rhode Island, and Maryland signed the MOU, following Massachusetts’ and Rhode Island’s participation in the early development of RGGI. The MOU also provided a framework for developing individual state regulatory and statutory proposals.

What is a RGGI allowance?

A RGGI CO2 offset allowance is a project-based reduction outside the capped electric power generation sector. The RGGI states limit the award of offset allowances to five project categories, each designed to reduce or sequester emissions of carbon dioxide or methane within the region. Offsets provide compliance flexibility and create opportunities for low-cost emissions reductions and co-benefits across sectors.

The RGGI states have developed prescriptive regulatory requirements for each of the five offset categories, ensuring that awarded CO2 offset allowances represent real, additional, verifiable, enforceable, and permanent reductions or carbon sequestration. Offset projects must be located within one or more of the RGGI states that award CO2 offset allowances.

Who participates in RGGI?

The Regional Greenhouse Gas Initiative (RGGI) is a cooperative effort among states to reduce CO2 emissions from the power sector. The third program review is being conducted to assess the success, impacts, and design elements of their CO2 budget trading programs. The program aims to reduce emissions from the power sector. The review provides an overview of RGGI’s history and design, as well as reports on RGGI proceeds.

What does the Regional Greenhouse Gas Initiative do?

The Regional Greenhouse Gas Initiative (RGGI) represents a collaborative effort among eleven Eastern states, collectively aiming to reduce carbon dioxide emissions from power plants within each state.

What are the requirements for RGGI?

Under the RGGI states’ CO 2 Budget Trading Program, power plants with at least one unit serving a generator with a capacity of 25MW or greater must possess CO 2 allowances equal to their emissions over a three-year control period. These allowances represent a limited authorization to emit one ton of CO2. Environmental regulatory agencies use RGGI COATS to determine compliance with state regulations by comparing a source’s covered emissions with the allowances held in their compliance account.

What is the Regional Greenhouse Gas Initiative 2005?

The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory, market-based effort in the United States to reduce greenhouse gas emissions. Established in 2005 by the governors of seven Northeastern and Mid-Atlantic states, RGGI sets a cap on carbon dioxide emissions from fossil fuel-fired power plants with a capacity of 25 MW or higher and allows sources to trade emissions allowances. The program is composed of individual CO2 Budget Trading Programs in each of the ten participating states, implemented through state regulations and linked through CO2 allowance reciprocity.

The program will begin by capping emissions at current levels in 2009 and reduce emissions 10 by 2018. The compliance period begins on 1 January 2009, at which time allowances will become tradable as power plants adjust their GHG emissions levels. The program will include 233 fossil fuel-fired power stations and factories. Power generators must hold allowances covering their CO2 emissions, each allowing the emission of one short ton of carbon dioxide emissions. These allowances are to be auctioned, and the proceeds used by the states to support renewable energy, energy efficiency, and other low carbon intensity power solutions.

Pre-compliance emissions allowance auctions were held for the 2009-11 period, with the first auction taking place on 25 September 2008, with 12 565 387 CO2 emissions allowances from Connecticut, Maine, Maryland, Massachusetts, Rhode Island, and Vermont offered for bid. The auction generated over USD 38 million in proceeds, which will be used for energy efficiency programs, mitigation of price impacts on consumers, investment in the renewable energy sector, and administrative costs.