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Summary (ICAP)

Summary provided by the secretariat of the International Carbon Action Partnership (ICAP), a multilateral forum working on carbon markets. For more information, visit ICAP’s website.  Copyright © ICAP and reproduced with permission.

General information:

The Regional Greenhouse Gas Initiative (RGGI), is the first mandatory greenhouse gas ETS in the United States. The system covers the electricity sector of the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont. RGGI entered into force on 1 January 2009 with the start of its first compliance period (2009 – 2011). RGGI states have committed to a reduction target of more than 50% from 2005 GHG levels by 2020.

Background information:

The absolute cap in 2015 was 89.1 M short tons CO₂ and is reduced annually by 2.5% to reach approximately 78 M short tons CO₂ in 2020.

The original cap was set at 149.7149.7 Mt (165 million short tons) CO₂ for the years from 2009 onwards, but as RGGI experienced more than 40% reduction in emissions from this original cap by 2012, the states lowered it to the current level as part of the 2012 program review.

Phases & Compliance periods:

RGGI’s trading period is referred to as a control period.

First control period: 2009-2011
Second control period: 2012-2014
Third control period: 2015-2017
Fourth control period: 2018-2020

Temporal flexibility:

Banking is allowed without restrictions.
Borrowing is not allowed.

Provisions for price management:

Minimum auction price: The minimum auction price is USD 2.15 in 2017 (EUR 1.96) per allowance, which increases by 2.5% per year (to reflect inflation).

Cost Containment Reserve (CCR): The RGGI states created a CCR in 2014, which releases additional allowances onto the market at predetermined price levels. The Triggers Prices are: USD 8 (EUR 7.28) in 2016, and USD 10 (EUR 9.10) in 2017. After this year (2017), the CCR trigger price will increase annually by 2.5%..

For further information, visit the ICAP ETS Map.

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