Issue Date: January 2, 2006
Seven states agree to cut CO2 emissions
On Dec. 20, 2005, seven northeastern states signed an agreement—called the Regional Greenhouse Gas Initiative (RGGI)—to establish carbon dioxide emissions caps for electric utilities in their states. It is the first mandatory emissions trading program in the U.S. The participating states-Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont-have agreed to reduce their emissions 2.5% per year beginning in 2015 from a total baseline set at 121 million tons, which is roughly the current level of annual emissions. The annual baseline emissions for the individual states range from 1.2 tons for Vermont to 64.3 tons for New York. Massachusetts and Rhode Island helped design the program but pulled out of the agreement shortly before Dec. 20 because of fears that it would increase electricity prices. They have the right to join the program at any time before 2008. Under RGGI, the right to emit CO2 becomes a tradable commodity in 2009. Utilities that produce less CO2 than their limit can sell their credits to others, and those that are over the limit can purchase credits, which gives an economic incentive to reduce emissions. Proponents consider RGGI a possible model for a national strategy.
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