The Regional Greenhouse Gas Initiative (RGGI) is a transnational cap and trade program for greenhouse gas emissions in states and provinces in the Northeastern United States and Eastern Canada. Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont currently participate in this program, in addition to four states and provinces acting as observers. In an attempt to lower emissions to combat climate change, these states began auctioning emission permits in September 2008. These online auctions were the largest at the time. RGGI aims to stabilize CO2 emissions from power plants at 2002-2004 levels by 2015 and then reduce the level by 2020. So far, this network has been effective in advancing its objectives with respect to governing climate change.
As symptomatic of a transnational network, RGGI was started in order to act on the issue of climate change quickly despite federal lag. In December of 2005, governors of seven states agreed to the RGGI and outlined a Memorandum of Understanding, which outlines the framework of the initiative. In response to public comment, amendments were made to the memorandum. This cap and trade program hoped to provide a model for larger implementation and reduce CO2 levels at the lowest possible cost. They aimed to create a fair and open carbon market for New England states. The RGGI explicitly states that it has no regulating or enforcement authority. As a transnational network, it uses soft measures in order to achieve its goals. It tracks and monitors CO2 allowances and it implements the auction platform, but individual states must voluntarily regulate their own emissions and pressure others to comply as well. It engages in technical assistance, creating an environment of sharing information and building capacity within the members.
The RGGI has not been without challenges. The governor of New Jersey, Chris Christie, pulled his state out of the carbon trading system in 2011. His administration said that the RGGI does not work in cutting carbon emissions; they said it is simply an unnecessary tax to businesses. Those statements, however, are untrue. State environmentalists say that, because of the withdrawal, New Jersey is on track to lose $500 million by 2020. The New Jersey Superior Court recently ruled that because Christie’s administration refused to hold public hearing for the withdraw, it did not follow RGGI protocol. A new resolution is now coming through New Jersey’s legislature. If passed, New Jersey can return to RGGI, without needing approval from Christie. Regional governments have the power with regards to transnational networks; however, those regional governments are still responsible for acting with the needs of the public.
Transnational networks such as RGGI are often criticized on their effectiveness. Are these measures being proposed progressive actions that would not otherwise come into effect? Because of lower natural gas prices and the recession, 2012 emissions from regulated power plants equated to only 91 million tons of carbon. However, the cap for 2012 emissions was 165 million tons. Looking at these numbers, the RGGI hardly seems useful. In response to this, the RGGI created a program review to decrease the cap to 91 million tons until 2015 and maintained the 2.5 percent reduction in emissions per year from 2015 to 2020. The adaptation of policy to line up with the current emission trend is commendable. Is this enough?
Although the RGGI could have more stringent caps emissions, the transnational network is effective. Some reduction is better than no reduction. Furthermore, the New England states have the non-capped carbon states across the country to compete with. RGGI has been effective at reducing carbon emissions from the New England states. To date, the program has prevented 792,000 short tons of CO2 emissions. The RGGI auction proceeds do a great deal in steering the region towards renewable energy sources. According to their 2012 Investment Report, RGGI’s auction proceeds to date will provide a more than $2 billion lifetime savings in energy bill savings for 3.2 million households and over 12,000 businesses in the region. The Analysis Group conducted an independent study in 2011 regarding the program and found that 16,000 job-years have resulted from RGGI’s investments.This concrete data shows the substantial impact that RGGI has had on combating climate change. It is an effective program because it is both in the best interest financially for the states and the best interest for the planet.