ABSTRACT

Regional Greenhouse Gas Initiative: Lessons Learned and Issues for Congress [July 2, 2015]   [open pdf - 415KB]

"The Regional Greenhouse Gas Initiative (RGGI) is the nation's first mandatory cap-and-trade program for greenhouse gas (GHG) emissions. RGGI involves nine states--Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont. The RGGI cap-and-trade system applies only to carbon dioxide (CO2) emissions from electric power plants with capacities to generate 25 megawatts or more--approximately 168 facilities. The RGGI emissions cap took effect January 1, 2009, based on an agreement signed by RGGI governors in 2005. The results of the RGGI program may be instructive to policymakers. Several of RGGI's design elements generated considerable interest during the development and debate of federal proposals to address GHG emissions. In particular, the program's emissions cap has received particular attention. When the original cap took effect in 2009, it did not compel regulated entities to make internal emission reductions or purchase emission credits from other sources. Several factors led to this outcome: RGGI's cap design, an economic downturn, and a substantial shift to less carbon intensive fuels. For instance, in 2005, RGGI states generated 33% of their electricity from coal and petroleum, sources of energy with relatively high carbon intensity. In 2013, these sources generated 10% of RGGI's electricity. To address the disparity between the cap and actual emissions, RGGI states agreed (in 2013) to reduce the existing cap (by 45%) so that the cap level would match actual emissions. The revised cap took effect in January 2014. RGGI's new, more-binding cap may have vastly different effects than its predecessor. It is uncertain how this new development may impact electricity use and prices in the RGGI region and, in turn, the perception and support for the program."

Report Number:
CRS Report for Congress, R41836
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Publisher:
Date:
2015-07-02
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Copyright:
Public Domain
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pdf
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application/pdf
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