In 2003, governors from Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont began discussions to develop a regional cap-and-trade program addressing carbon dioxide emissions from power plants.
On December 20, 2005, seven of those states announced an agreement to implement the Regional Greenhouse Gas Initiative, as outlined in a Memorandum of Understanding (MOU) signed by the Governors of Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont. The MOU, as amended, provides the outlines of RGGI, including the framework for a Model Rule.
In August 2006, the original seven MOU signatory states published a Model Rule, which provided a regulatory framework for the development of individual state regulatory and/or statutory proposals. The model set of regulations detailed the proposed program, as outlined in the MOU.
In early 2007, Massachusetts and Rhode Island, which had participated in the early development of RGGI, signed the MOU, as did Maryland later that year.
By the end of 2008, all ten states completed their individual rulemaking processes. The first compliance period for each state's linked CO2 Budget Trading Program began January 1, 2009.