What is RGGI?

June 17, 2021

RGGI stands for the Regional Greenhouse Gas Initiative and is the first mandatory market-based program to reduce emissions in the United States. Current RGGI members include; Rhode Island, Vermont, Connecticut. Delaware, Massachusetts, Maine, New Hampshire, New Jersey, Virginia, and New York. Pennsylvania signaled its interest to join the RGGI in 2020, with an expected start in 2022. RGGI compliance applies to fossil fuel plants with a generating capacity of 25MW or greater.

The RGGI implements a regional cap on emissions from power plants via the use of tradable CO2 allowances. Proceeds from these allowances fund initiatives related to renewable energy, energy efficiency, and other sustainability programs. 90% of these allowances are distributed via quarterly auctions, with a steadily decreasing cap (2.5% annual reductions until 2020) on total emissions put in place in 2009.

This has resulted in a sizable reduction in emissions, with emissions falling from over 160 million tons in 2005 to under 90 million tons in 2013. The RGGI has also committed to a further 30% reduction in emissions through 2030. As such, further caps have been proposed through 2030, with the cap set to decline from 76.1 million tons in 2020 to 54.6 million in 2030. This would see a 65% reduction in emissions from 2009 levels.