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Review of the Regional Greenhouse Gas Initiative

The nearly decade-old Regional Greenhouse Gas Initiative (RGGI) was always meant to be a model for a national program to reduce power plant carbon dioxide (CO₂) emissions. The Environmental Protection Agency (EPA) explicitly cited it in this fashion in its now-stayed Clean Power Plan. Although the RGGI is often called a “cap and trade” program, its effect is the same as a direct tax or fee on emissions because RGGI allowance costs are passed on from electric generators to distribution companies to consumers. More recently, an influential group of former cabinet officials, known as the “Climate Leadership Council,” has recommended a direct tax on CO₂; emissions (Shultz and Summers 2017).

Positive RGGI program reviews have been from RGGI, Inc. (the program administrator) and the Acadia Center, which advocates for reduced emissions (see Stutt, Shattuck, and Kumar 2015). In this article, I investigate whether reported reductions in CO₂ emissions from electric power plants, along with associated gains in health benefits and other claims, were actually achieved by the RGGI program. Based on my findings, any form of carbon tax is not the policy to accomplish emission reductions. The key results are:

David Stevenson is Director of the Center for Energy Competitiveness at the Caesar Rodney Institute. He prepared this working paper for Cato’s Center for the Study of Science.

Download original document: “A Review of the Regional Greenhouse Gas Initiative [1]