Regional Greenhouse Gas Initiative
The Regional Greenhouse Gas Initiative is the first market-based regulatory program in the United States to reduce greenhouse gas emissions. RGGI is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector.
In 2014 participating RGGI states set a cap of 91 million short tons of CO2. Since 2015, the RGGI CO2 cap has declined by 2.5 percent each year through the end of 2020, representing a steady decline in CO2 emissions from the power sector.
Each RGGI state has an individual CO2 Budget Trading Program. These programs are implemented through state regulations and/or legislation, but are regionally linked through CO2 allowance reciprocity, meaning an allowance issued by any participating state will be recognized by the other participating states. Due to this reciprocity, the RGGI states comprise a single regional carbon allowance market.
The RGGI participating states have each chosen to auction nearly all CO2 allowances and to invest the proceeds in consumer benefit programs to build a clean energy economy. These investments reduce greenhouse gas emissions and generate important consumer benefits, including lower energy bills, greater electric system reliability, and more jobs.
Pursuant to rules and regulations promulgated by NYSERDA and the NYS Department of Environmental Conservation (DEC), NYSERDA is responsible for administering periodic auctions for the sale of the emissions allowances. The proceeds from the sales of these allowances will be used by NYSERDA to administer energy efficiency, renewable energy, programs for disadvantaged communities, and/or innovative carbon abatement programs, and to cover the costs to administer such programs.
NYSERDA Part 507 is designed to complement the CO2 Budget Trading Program established by DEC Part 242. These two regulations establish the framework for the RGGI program in New York.
Following a recent comprehensive Program Review, New York along with the participating states announced a proposal to lower the regional emissions cap to approximately 75 million tons in 2021, declining 3.0 percent a year through 2030. Accordingly, NYSERDA has proposed revisions to the CO2 Allowance Auction Program as set forth in Part 507. These revisions compliment changes that the Department of Environmental Conservation will be making to Part 242, which is the primary mechanism for regulation of CO2 emissions throughout the State. A copy of NYSERDA’s proposed revisions and accompanying Regulatory Impact Statement and Regulatory Flexibility Analysis can be found below:
- Proposed Revisions to NYSERDA Part 507 [PDF] - Underlined wording found in the text of the express terms is material to be added to the regulations. Wording found within brackets [ ] is material to be deleted.
- Regulatory Impact Statement [PDF]
- Regulatory Flexibility Analysis [PDF]
The proposed rule was adopted by NYSERDA’s Board on December 1, 2020, and will become effective upon publication in the New York State Register.