On October 24, New York Governor Eliot Spitzer announced the issuance of proposed regulations that would implement the Regional Greenhouse Gas Initiative (RGGI) in New York. The proposed regulations would establish a non-traditional market based program designed to cap and reduce carbon dioxide emissions from power plants by 10 percent by 2019. While the draft regulations derive from a model previously issued for RGGI states, they also contain state-specific provisions. One major provision of the proposal requires power plants to purchase allowances at auction for every ton of emitted carbon dioxide – no allowances will be given away as in a traditional cap-and-trade program. Auction proceeds would then go toward energy efficiency programs and renewable energy projects, and would also provide "green investment" opportunities for companies to offset emissions.

Governor Spitzer added that "by design, this plan creates winners and losers…Older, less efficient power plants with higher emission levels will pay more to comply with RGGI than newer, more efficient units. Dirty generators will be at a competitive disadvantage, and there will be a new incentive to build clean, efficient or renewable generation."

According to current estimates, New York power plants contribute approximately 25 percent of the total annual carbon dioxide emitted in the state.

The 60-day public comment period for the proposed regulations runs through December 24, 2007.