Putting Carbon on the Market

CLF helped to launch the country’s first mandatory cap-and-trade program here in the Northeast. The Regional Greenhouse Gas Initiative is a joint effort of 9 states to hold polluters accountable for the impact their greenhouse gas emissions have on our changing climate.

CLF in Action

CLF was deeply involved in the creation of the Regional Greenhouse Gas Initiative, which launched in 2008. We continue to play an active role in RGGI’s success – including laying the groundwork for a 2012 program review required by the original RGGI agreement.

Since RGGI was implemented, emissions in the region have dropped by 41%. This is an important milestone toward meeting the climate imperative of an 80% reduction in greenhouse gas emissions by 2050. But much more work must be done across the region to reach that 80% goal – including ensuring we don’t replace our dependence on oil and coal with another climate-warming fuel source: natural gas.

At the same time, RGGI covers emissions from electricity only – not from transportation, heating systems, or other sources of greenhouse gases. CLF will continue our work to shape RGGI into a more effective program and pursue other ways to cut emissions to keep New England on track to reach the 2050 goal.

A Model for the Country

The Regional Greenhouse Gas Initiative (RGGI) was the first mandatory cap-and-trade program in the United States. RGGI states set a limit, or cap, on carbon dioxide emissions in the nine-state region*. They then issue as many allowances — certificates that allow a power plant to emit one ton of carbon dioxide — as the cap allows.

Cap-and-trade programs in other countries have dispensed these allowances for free. RGGI set an important precedent, one that should be replicated on the federal level, by auctioning the vast majority of allowances and reinvesting the proceeds in energy efficiency – reducing emissions while cutting the program’s costs.

RGGI shows not only that a cap-and-trade program can help the economy, but also that the market can drive solutions to climate change. Proceeds from RGGI auctions have been reinvested in programs that benefit consumers and our climate, including energy efficiency programs that have saved nearly $174 million. The program has created nearly 7,200 new job-years and generated nearly $1 billion in net economic benefits in New England alone.

*Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont