The Regional Greenhouse Gas Initiative (RGGI) was the first mandatory cap-and-trade program in the United States to limit carbon dioxide (CO2) from the power sector. It consists of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont. RGGI was established in 2005, and administered its first auction of CO2 emissions allowances in 2008. By 2020, the RGGI CO2 cap is projected to contribute to a 45 percent reduction in the region’s annual power-sector CO2 emissions from 2005 levels, or between 80 and 90 million tons of CO2. RGGI requires fossil fuel power plants over 25 megawatts in participating states to obtain an allowance for each ton of CO2 emitted annually. Power plants within the region may comply with the cap by purchasing allowances from quarterly auctions, other generators within the region, or offset projects.

This brief provides an overview of RGGI’s history and highlights the initiative’s major policy provisions, including those taking effect at the beginning of 2014.