The USA’s most recent Regional Greenhouse Gas Initiative (RGGI) quarterly auction, held on March 3, resulted in a clearing price of $7.60 per short ton of carbon dioxide (CO2), exceeding the previous high price of $7.50 per short ton reached in December 2015.
States can reinvest the proceeds from these auctions in consumer benefit programmes to improve energy efficiency and accelerate the deployment of renewable energy technologies in the electric power sector.
The RGGI agreement was the first in the United States to place a cap on power sector CO2 emissions. The original RGGI member states are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont, and in January Virginia became a full participant.
RGGI is implemented through individual CO2 Budget Trading Programmes in each participating state.. The RGGI-wide CO2 cap represents a regional budget for CO2 emissions from the power sector and is an aggregation of the individual state program targets.
For most of its early years, the RGGI programme has registered emissions that are much lower than the allocated limits. The original cap was 188 million short tons of CO2 per year in the first three years of the programme, 2009 to 2011. In those years, actual emissions averaged 126 million short tons per year, or one-third less than the cap. The cap was lowered in 2012 and 2014, but emissions have consistently been less than the caps. RGGI’s plan allows for overall emissions caps to decline (ie tighten) from 2021 through to 2030.