Last year, the nine states participating in the Regional Greenhouse Gas Initiative (RGGI) cap-and-trade program for carbon dioxide (CO2) decided to lower the program\’s emissions cap by 45% starting in 2014. RGGI is intended to limit CO2 emissions from electric power plants in the Northeast.
When it took effect in 2009, RGGI became the first mandatory CO2 cap-and-trade program in the United States. The cap was tightened primarily because actual CO2 emissions in the region since 2009 have been roughly 35% below the cumulative cap. This lower level of emissions is primarily attributed to low natural gas prices, which have shifted a large share of electricity generation in the region toward natural gas, and to lower overall electricity demand.
RGGI covers fossil-fueled electric power plants greater than 25 megawatts (MW) located in any of the nine participating states. CO2 emissions in the RGGI region accounted for 4% of the total emissions from the electric power sector in the United States in 2012. RGGI is one of the two legally mandated CO2 reduction programs in the United States, the other being a California cap-and-trade statute.