In 2009, a coalition of Northeast states launched the Regional Greenhouse Gas Initiative (RGGI) to reduce emissions of carbon dioxide from the region’s fossil-fired power plants. Relying on a market-based trading program to control air pollution was by no means new, but what made RGGI unique was the decision by the states to sell its emissions allowances through an auction, rather than allocating the allowances for free. A Pioneering Approach to Carbon Markets explores the development of the multi-state RGGI program and the pioneering decision to auction the program’s emissions allowances for consumer benefit.
This paper is based on an extensive review of archived RGGI program design materials, and interviews with key stakeholders and policymakers involved in the formative years of the RGGI program. The project was made possible by funding from the Barr Foundation, Energy Foundation and the Merck Family Fund, with additional support from the Betterment Fund, Alexander Buck, Jr., The Devonshire Foundation, Thomas Haas at the New Hampshire Charitable Foundation and Daniel Hildreth.