Massachusetts/RGGI

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The Regional Greenhouse Gas Initiative, known as RGGI (pronounced "Reggie") is a groundbreaking cap and trade program for carbon dioxide emissions created by ten Northeastern and Mid-Atlantic states.


Under the RGGI program, the participating states set a cap for CO2 emissions from electric power generators, then reduce that cap between 2009 and 2018, when it will be 10% below levels at the beginning of the program.


The Waxman-Markey legislation now working its way through Congress proposes a national cap & trade system based on the RGGI model.


Massachusetts joined RGGI on January 18th, 2007, when Governor Deval Patrick signed the RGGI agreement in one of his first acts in office.


Beginning in 2009, power-producing companies must deliver allowances to their states in order to legally emit carbon dioxide into the atmosphere. Allowances are due and delivered over three-year "compliance periods". The first such period covers 2009-2012.


Each state is allocated a specific number of allowances, based on the amount of greenhouse gases produced by their power sectors. Each year, as the cap on emissions is reduced, the states will receive fewer allowances. The allowances are auctioned for sale, with the sales proceeds going to the states who provided the permits. The states will use those funds for public purposes, with the majority of the revenues allocated to energy efficiency programs.


In Massachusetts, 50% of the proceeds from allowances will be used to directly support electric and natural gas energy efficiency programs. $ 10,000,000 of each year's auction proceeds will be used to support the Green Communities program.


Auctions are held quarterly. Through March of 2009, Massachusetts had sold 1/2 of its 26.6 million allowances for 2009, generating $44.5 million dollars for energy efficiency programs.