RGGI and Emissions Allowance Trading: Options for Voluntary Cooperation Among RGGI and Non-RGGI States

White Paper, July 2017

In an update to Analysis Group's 2016 report on the nine-state Regional Greenhouse Gas Initiative (RGGI), Principal Paul J. Hibbard and Senior Analyst Ellery Berk reviewed the pros and cons of expanding the regional emissions allowance trading program, assuming the absence of a federal program. 

Over the past nine years, the RGGI states have successfully operated a voluntary program for limiting CO2 emissions through mass-based allowance trading. Now, the nine states involved in the program are considering opening the door to expanded trading opportunities for power plants located both inside and outside the RGGI states.

In their report, RGGI and Emissions Allowance Trading: Options for Voluntary Cooperation Among RGGI and Non-RGGI States, Mr. Hibbard and Ms. Berk identify principles and objectives for program design changes that RGGI states might incorporate to enable broader trading. They also assess issues that other states might face as they consider how to enable generators in their states to participate in interstate carbon trading programs, including RGGI. The review includes consideration of the potential impact on auction revenues, balanced against longer-term cost reduction benefits.

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Authors

Hibbard P, Berk E