As climate focus shifts to states, US East Coast partnership offers model for multi-state collaboration

A trailblazing regional greenhouse gas partnership on the East Coast is considering possible changes or expansion that would allow it to keep building on its success — and the stakes grew higher last month with the reelection of Donald Trump.

The 11-state Regional Greenhouse Gas Initiative, established in 2005, is the country’s first regional cap-and-invest system for reducing carbon emissions from power generation. Since 2021, administrators have been conducting a program review, analyzing its performance since the last review in 2017 and weighing potential adjustments to make sure it continues to deliver benefits to member states.

The role of such programs is more crucial as Trump’s pledges to roll back federal climate action leaves it up to cities, states, and the private sector to maintain the country’s momentum on clean energy over the next four years. In RGGI, as the regional initiative is known, states have a potential model for scaling their impact through collaboration. 

“RGGI has not only been an effective climate policy, it’s been an extraordinary example of how states can work together on common goals,” said Daniel Sosland, president of climate and energy nonprofit Acadia Center. “It is a major vehicle for climate policy now in the states, more than it might have seemed before the election.” 

How RGGI works

RGGI sets a cap for total power plant carbon emissions among member states. Individual generators must then buy allowances from the state, up to the total cap, for each ton of carbon dioxide they produce in a year. The cap lowers over time, forcing power plants to either reduce emissions or pay more to buy allowances from a shrinking pool.

States then reinvest the proceeds from these auctions into programs that further reduce emissions and help energy customers, including energy efficiency initiatives, direct bill assistance, and renewable energy projects. Since 2008, RGGI has generated $8.3 billion for participating states, and carbon dioxide emissions from power generation in the nine states that have consistently participated fell by about half between 2008 and 2021, a considerably faster rate than the rest of the country. 

“It has really thrived and been really effective across multiple administrations,” said Jackson Morris, state power sector director with the Natural Resources Defence Council. “RGGI is a winning model. It’s not theoretical — we’ve got numbers.”

Currently, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont are part of the program. Virginia joined RGGI in 2021, but in 2023 Gov. Glenn Youngkin repealed the state’s participation, a move immediately challenged in court; a judge ruled last month that the governor lacked the authority to withdraw the state from initiative, though a spokesman for the governor has declared the state’s intention to appeal. 

There is widespread agreement that RGGI will endure despite likely federal hostility to climate measures. There was no attempt to take direct action against it during Trump’s first term, nor has there been any concerted industry opposition, said Conservation Law Foundation president Bradley Campbell, who was involved in the founding of RGGI when he was commissioner of the New Jersey Department of Environmental Protection.

Supporters also note that the program has historically had broad bipartisan support: Participating states have been led through the years by both Republican and Democratic governors and legislatures. 

Politics has had some influence over the years, though only at the margins. New Jersey, a founding member of RGGI, left in 2011 when Chris Christie was governor, but returned in 2020 following an executive order from his successor. Pennsylvania joined in 2022 through an executive order from the governor, but its participation is now being challenged in court. 

Still, RGGI’s foundations are solid and will remain so, experts said. 

“The basic infrastructure has weathered the political winds over the decades,” Campbell said.

Looking forward

Nonetheless, RGGI will need to make some carefully thought-out program design decisions during its current review to make an impact in the face of falling federal support for decarbonization. 

One question under consideration is whether to maintain the existing trajectory for the overall emissions cap for the program — a reduction of 30 per cent between 2020 and 2030, then holding steady thereafter — or to continue lowering the limit after 2030. 

The RGGI states are also contemplating a possible change to the compliance schedule that would require power generators to acquire allowances worth 100 per cent of their carbon emissions each year, and certify compliance annually. The current system calls for certification every three years, and only mandates allowances equivalent to half of carbon emissions for the first two years of each period.

The program is looking for ways to appeal to potential new participant states that have less aggressive decarbonization goals than current member states without watering down the program’s overall impact on decarbonization, said Acadia Center policy analyst Paola Tamayo. Acadia suggested possible program mechanisms such as giving proportionately more allowances to states with more stringent emissions targets to incentivize tighter limits.

“At this point it is critical for states to maintain a high level of ambition when it comes to programs like RGGI,” Tamayo said. “There are different mechanisms that they can implement to accommodate other states.”

The program review is expected to yield a model rule some time over the winter, though updates may be made into the spring as the RGGI states receive and consider feedback on how to accommodate potential new participants.  

States will also need to maintain and strengthen their own climate policies to magnify the impact of RGGI, Campbell said. He pointed to Massachusetts, where Gov. Maura Healey needs to show “bolder leadership,” he said, and Maine and Vermont, where the Conservation Law Foundation has filed lawsuits in an attempt to compel the states to meet their own carbon reduction deadlines. 

“It’s especially important that the states that have strong emissions reduction mandates speed up the implementation of their climate laws,” he said. “State leadership on these issues is going to be more important than ever.”

This article first appeared on Energy News Network and is republished here under a Creative Commons license.