Regional Greenhouse Gas Initiative

RGGI Benefits

The Regional Greenhouse Gas Initiative is designed to reduce carbon dioxide emissions from electricity generation, while minimizing impacts to electricity ratepayers and maximizing consumer benefits.

RGGI will reduce CO₂ emissions at the lowest possible cost while expanding the deployment of energy efficiency, renewable energy, and clean energy technologies.

A key innovative aspect of RGGI is that nearly all CO₂ allowances issued by participating states will be auctioned instead of distributed for free to regulated power plants.

Reducing CO₂ Emissions

By 2018, RGGI’s CO₂ cap on emissions will be reduced by 10 percent. The initial regional cap is 188 million short tons of CO₂.  Power plants regulated under state RGGI programs account for approximately 95% of the region’s total electric generation sector CO₂ emissions.

Benefiting Consumers

Reinvesting auction proceeds in the region provides significant consumer benefits. Reinvestment of proceeds in local economies helps businesses and homeowners control their energy costs and creates new jobs in the clean energy sector.

Improving electricity end-use efficiency is a low-cost means of avoiding CO₂ emissions. End-use energy efficiency investments provide net economic benefits to ratepayers through bill savings, less need for investment in transmission and distribution, and lower wholesale electricity prices, especially during peak demand periods.

By using proceeds from CO₂ allowance auctions to reduce electricity demand, RGGI reduces the cost of meeting the emissions cap and moderate CO₂ allowance prices.

Consumer benefits realized through the strategic reinvestment of CO₂ allowance auction proceeds are expected to largely offset the direct effect of RGGI on retail electricity prices.

Local Economies

The RGGI auctions raise proceeds for state energy efficiency and clean energy programs, and support investment in clean energy technologies across the region.

By boosting clean-technology and renewable energy innovation in the region, the participating states expect to keep wealth in local economies and increase local employment.