The Regional Greenhouse Gas Initiative (RGGI) is preparing for its launch on September 25, but there is a concern that the RGGI might fail to actually reduce greenhouse gas emissions substantially. This concern arises from the fact that RGGI may allow for significantly greater GHG emissions in the Northeast than are occurring at present.
Under RGGI, total greenhouse gas emissions are capped because RGGI establishes a limited number of emission allowances and requires large emitters of greenhouse gases to submit allowances for all of their greenhouse gas emissions. But for any cap and trade program to reduce actual greenhouse gas emissions, the cap must be set below the amount of GHG emissions that would otherwise occur, and that is where RGGI appears to have missed the mark. For the years through 2014, RGGI caps GHG emissions at 188 million tons per year and then reduces the cap by 2.5 percent each year through 2018. These figures were based on estimates made in 2004, but, after peaking at 184.5 million tons in 2005, GHG emissions fell to 164.5 million tons in 2006 and are estimated at 172.4 million tons for 2007. Thus, it appears that RGGI may not actually require a concrete reduction in GHG emissions for some time.