What is RGGI?

The Regional Greenhouse Gas Initiative (RGGI or "ReGGIe") is a cooperative effort by 9 Northeast and Mid-Atlantic states to discuss the design of a regional cap-and-trade program initially covering carbon dioxide emissions from power plants in the region. In the future, RGGI may be extended to include other sources of greenhouse gas emissions, and greenhouse gases other than CO2.

How Did RGGI Get Started?

In April 2003, New York Governor George E. Pataki sent letters to the 11 governors from Maine to Maryland, inviting their states' participation in discussions to develop a regional cap-and-trade program covering carbon dioxide emissions from power plants within two years. By July 2003, the governor had received positive responses from eight of those governors, including those from Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, Rhode Island, and Vermont. The governors agreed to have their representatives participate actively in the discussions. After discussions got underway, representatives from the Eastern Canadian Provinces Secretariat and the Province of New Brunswick began observing the process. Maryland and Pennsylvania also send representatives to observe the process.

The positive response from the Northeast and Mid-Atlantic governors should come as no surprise. All of the Northeast and Mid-Atlantic states are in various stages of studying or implementing programs to reduce greenhouse gas emissions. For example, in April 2000, New Jersey adopted a statewide goal of reducing greenhouse gas emissions to 3.5% below 1990 levels by 2005. Similarly, the New England governors and the Eastern Canadian premiers issued a Climate Change Action Plan in August 2001, which calls for the reduction of greenhouse gases to 10% below 1990 levels by 2020. New York's State Energy Plan calls for the reduction of the state's carbon emissions to 5% below 1990 levels by 2010 and to 10% below those levels by 2020. The regional cap-and-trade program will assist all participating states in reaching such state-specific goals.

RGGI States Adopt an Action Plan

In August 2003, staff representatives were assembled from the nine participating states' environmental agencies, as well as many of the state energy regulatory agencies. This group, called the "RGGI Staff Working Group", drafted an action plan that lays out the process to develop a regional cap-and-trade program covering carbon dioxide emissions from power plants. On September 29, 2003, the environmental commissioners and many of the energy regulatory agency chief executives endorsed the action plan.

What is the Goal of RGGI?

The action plan sets out the following goal for RGGI:

Develop a multi-state cap-and-trade program covering greenhouse gas (GHG) emissions. The program will initially be aimed at developing a program to reduce carbon dioxide emissions from power plants in the participating states, while maintaining energy affordability and reliability and accommodating, to the extent feasible, the diversity in policies and programs in individual states. After the cap-and-trade program for power plants is implemented, the states may consider expanding the program to other kinds of sources.

The action plan also establishes guiding principles for the program design, including: emphasizing uniformity across the participating states; building on existing successful cap-and-trade programs; ensuring that the program is expandable and flexible, allowing other states or jurisdictions to join in the initiative; starting the program simply by focusing on a core cap-and-trade program for power plants; and focusing on reliable offset protocols (i.e., credits for reductions outside of the power sector) in a subsequent design phase.

How will Participating States Accomplish Their Goal?

To accomplish their goal, the state representatives have created subgroups that have assumed specific tasks under the action plan. Specific states have taken on subgroup leadership roles to carry out those tasks. Subgroups report to the larger group of state representatives, which in turn report to the state environmental and energy regulatory agency chief executives.

The action plan calls for a learning phase and two program development phases. The learning phase consists of sharing of recent state experiences relating to the control of carbon emissions; scheduling of targeted expert briefings on relevant topics; and determining what legal mechanism will be required to implement the program for each state (legislative or administrative rulemaking). The states have shared with each other summaries of recent state efforts to address climate change. The subgroup in charge of identifying topics for expert input has developed a list of topics and is presently identifying appropriate expert speakers to speak to the group.

The first development phase focuses on the design of the core cap-and-trade program covering the power sector. Initial tasks for this phase to be carried out by subgroups include: data gathering and technical analysis; model rule development; stakeholder process; monitoring NESCAUM northeast registry efforts; economic cost and benefit analysis; website development; and energy economic modeling. These subgroups have been meeting to carry out their tasks since October 2003.

The second development phase will focus on reliable offset mechanisms that would give credit for verifiable and surplus emissions reductions outside the electricity sector.

How Can Stakeholders Participate in RGGI?

Stakeholder involvement in the development of the program will be crucial to its success. Stakeholder involvement will be comprehensive and will include the posting of draft documents on this RGGI website for comment, stakeholder notification of important events through the Listserv located on this website, and the creation of a stakeholder group. The stakeholder group is to serve as an important sounding board for the RGGI staff representatives as the program is designed. In addition to this regional stakeholder process, each state plans to implement its own state-specific stakeholder process as appropriate.