Impact Analysis of Regional Greenhouse Gas Initiative in the U.S. Northeast

In 2009, ten Northeastern and Mid-Atlantic states began the Regional Greenhouse Gas Initiative (RGGI), the first market-based program in the U.S. to reduce CO2 emissions from power plants. In a report released in mid-November, 2011, researchers found that the net effect of the first three years of RGGI has been the creation of 16,000 new “job years”, with each of the ten states showing net job additions. Jobs related to RGGI include engineers who perform efficiency audits; workers who install energy efficiency measures in commercial buildings; staff performing teacher training on energy issues; and workers in state-funded programs that might have been cut had a state not used RGGI funds to close budget gaps.


The paper is also an overview of this innovative program. Its unique approach is to “follow the money”, from the auction, where power plant owners spent roughly $912 million to buy CO2 allowances, to the state level where virtually all the $912 million in allowance proceeds were disbursed back into the economy in diverse ways such as energy efficiency measures, community-based renewable power projects, assistance to low income customers to help pay their electricity bills, education and job training programs, and even contributions to a state’s general fund. Consumers now pay regional electricity rates that reflect a price on CO2 emissions, and emissions have been reduced because of the RGGI (as well as the economic recession).



The Economic Impacts of the Regional Greenhouse Gas Initiative on Ten Northeast and Mid-Atlantic States: Review of the use of RGGI auction proceeds from the first three-year compliance period by Paul J. Hibbard, Susan F. Tierney, Andrea M. Okie, & Pavel G. Darling published by the Analysis Group at:

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