The groundwork began in 2003, when several northeastern and mid-Atlantic states started talking about coordinating greenhouse gas reductions, kicking off years of study and planning that would turn into RGGI. They decided on a regional cap-and-trade system, which puts a limit on the total amount of carbon allowed to be produced in the region, then auctions pieces of that limit off to power plants and other emitters.
The state then keeps the money earned from those auctions, a total of $1.6 billion since they started in 2008, and 25 percent of that is required to be invested in energy efficiency and clean energy.
Revenues are likely to rise, since the relatively high cap that was set in 2005 didn't predict the recession or natural gas boom that lowered carbon emissions significantly. That meant carbon permits were cheap, and that RGGI didn't have as much of an impact on emissions as it could have. But a new, lower cap that took effect this year should begin to address those issues, and the quarterly auction that occurred this week confirmed that permits are more in-demand than ever.
How Some States Are Making Carbon Pollution Cuts Really Easy
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