Over the past several months I have published a series of posts arguing that the Regional Greenhouse Gas Initiative (RGGI), as currently structured, no longer serves its stated purpose of reducing greenhouse gas emissions and has become a significant, largely unacknowledged burden on electricity consumers throughout the RGGI states. I found independent corroboration from two white papers published by Tabors, Caramanis, and Rudkevich (TCR), an energy consulting and analytics firm. The convergence of conclusions reached through entirely different methodologies — my narrative and historical analysis versus TCR’s full power market simulation — is, I believe, significant and worth examining in detail.
Dealing with the RGGI regulatory and political landscapes is challenging enough and agency retribution is enough of a threat that affected entities seldom see value in speaking out about fundamental issues associated with the program. I have been involved in the RGGI program process since its inception and have no such restrictions when writing about the about problems with the RGGI program. I have worked on every cap-and-trade program affecting electric generating facilities in New York including RGGI, the Acid Rain Program, and several Nitrogen Oxide programs, since the inception of those programs. I also participated in RGGI Auction 41 successfully winning allowances and holding them for several years. The opinions expressed in this post do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone. I acknowledge the use of Perplexity AI to generate references and draft text included in this document.
The Two White Papers
TCR published two relevant papers. The first, dated February 15, 2025, is titled Summary Impact of RGGI on Electricity Prices and Generation Fleet Operation in the PJM Interconnection and was authored by Dr. Aleksandr Rudkevich and Dr. Richard Tabors. It uses TCR’s ENELYTIX power market simulation tool to model the PJM wholesale electricity market across a full calendar year (2025) under two scenarios: a Business-as-Usual case in which Delaware, Maryland, and New Jersey participate in RGGI at $20 per short ton of CO₂, and a No-RGGI case in which no PJM state participates. The $20/ton price reflects the RGGI forward market in October 2024, when the work began.
The second white paper, dated April 1, 2026, is titled Quantitative Evaluation of a RGGI Fixed Price Proposal for New Jersey and models a specific reform proposal: setting the RGGI compliance price to a fixed $7 per short ton for New Jersey generators, compared to a base case in which New Jersey operates under the Cost Containment Reserve (CCR) Tier 2 Trigger Price of approximately $29.25/ton. That paper also includes a sensitivity analysis examining what happens if Virginia re-joins RGGI in 2028. The study period is 2027–2030.
Where the Analysis Converges: The Emissions Leakage Problem
The event that solidified my belief that changes are in order was the fallout from the April 29, 2026, RGGI statement that Virginia was rejoining the program. I explained in the days that followed, the futures market price of RGGI allowances nearly doubled, and the spot market cost also increased significantly. The closing price of the most recent RGGI auction on June 3, 2026, was $35.00 up 40% from the March 11, 2026 auction price of $24.99. One of the implications of this increase in price is that emissions leakage from RGGI states to now cheaper sources in non-RGGI states is no longer a theoretical problem.
The core analytical finding of the TCR 2025 white paper confirms the leakage observation from a different direction: RGGI, at current prices, does not reduce carbon dioxide emissions in any net sense. Because there are states in RGGI and not in RGGI in the PJM Interconnection this effect is magnified. The higher RGGI prices redistributes where generation and emissions occur, and because it displaces efficient gas-fired combined-cycle generation in RGGI states with less-efficient coal-fired generation in non-RGGI PJM states, the net effect is a larger total emissions footprint.
TCR’s simulation is precise about the mechanism. Under RGGI at $20/ton, the allowance cost adder renders highly efficient combined-cycle power plants in Delaware, Maryland, and New Jersey uneconomical in the PJM dispatch stack. The gap is filled by coal-fired units located in western PJM — in states like Ohio, West Virginia, and Pennsylvania — that face no RGGI compliance obligation. The quantitative result from TCR’s Figure 1 is striking: RGGI causes combined-cycle gas generation to fall by 6,850 gigawatt-hours, while coal generation increases by 5,220 GWh and other thermal generation rises by another 628 GWh. The net CO₂ impact, shown in TCR’s Figure 2, is a system-wide increase of 2.7 million short tons per year. Emissions fall by roughly 3 million short tons in the RGGI-participating zones as gas-fired CC plants run less — but they rise by 5.7 million short tons in the rest of PJM as coal and other thermal plants fill the void.
My recent post on Virginia and the myth of lower energy costs made the identical analytical argument, estimating a net emissions increase attributable to the leakage mechanism. The TCR 2025 paper confirms this with precision. It also notes a secondary concern I raised as well: RGGI’s effect on PJM exports reduces sales to MISO and other neighboring grids by approximately one terawatt-hour, likely causing further emission increases in those systems — a second-order leakage effect that is not counted in the headline figure.
It is important to note that TCR modeled RGGI at $20/ton. As of the most recent auction in June 2026, RGGI allowances cleared at $35/ton — 75% higher than the TCR assumption. The leakage and cost impacts TCR documented are therefore considerably worse today than their published numbers reflect.
Where the Analysis Converges: Consumer Cost Impacts
The TCR 2025 paper quantifies the consumer cost impact across the entire PJM footprint at $1.16 billion per year in additional costs (expressed in constant 2024 dollars) for the $20/ton scenario. This arises from two mechanisms that I have described. First, RGGI-obligated generators embed the allowance cost directly in their market bids. Second — and this is the more important and less-understood effect — when a RGGI-obligated unit sets the market clearing price, every generator in that pricing zone collects the higher clearing price, including non-emitting units that have no compliance obligation whatsoever. Those zero-emission units receive the carbon cost premium as pure profit without bearing any direct CO₂ compliance cost.
My May 9, 2026 post on RGGI’s unacknowledged New York cost impact described this mechanism and concluded that total consumer costs can be “two or more times higher than the direct allowance expenditures.” The TCR paper’s system-wide $1.16 billion figure, modeled at $20/ton, is consistent with that characterization. The primary beneficiaries TCR identifies are generators located in non-RGGI PJM states, which receive nearly $1.3 billion per year in additional revenues as a result of the program. RGGI-state generators actually see their revenues reduced by approximately $500 million per year, for a net revenue transfer to non-participating states of $825 million annually. Consumers in RGGI states are, in effect, subsidizing coal-state generators through their electricity bills.
The Historical Attribution Problem
This is an area where my analysis goes meaningfully beyond what either TCR white paper addresses. Both TCR papers acknowledge the historical emission reduction record of the RGGI program: the three PJM participants (Delaware, Maryland, and New Jersey) collectively reduced in-state CO₂ from 44.8 million short tons in 2009 to 23.6 million short tons in 2024 — a net reduction of 21.2 million short tons. The TCR papers present this as RGGI’s achievement without examining the counterfactual question: how much of this reduction would have occurred anyway?
My December 2025 post analyzing New York’s RGGI Cap-and-Invest emission reduction performance addresses that question directly, at least for New York. By examining NYSERDA’s own program investment data, I calculated that total cumulative annual emission savings from RGGI-funded investments through 2023 amounted to approximately 1.4 million tons — meaning that emissions from RGGI sources in New York would have been only about 3% higher in the absence of any RGGI investment spending. My Virginia post extended the analysis to the broader program, estimating that roughly 7.6% of observed reductions can be attributed to RGGI-funded projects; the remaining 93% or more reflect market-driven fuel switching from coal and oil to natural gas, driven by price differentials that had nothing to do with RGGI allowance costs.
The TCR white papers take the reduction record at face value. This is not a criticism — attribution analysis was outside their scope — but it means the papers’ own historical framing somewhat overstates RGGI’s contribution during its early years. The combination of the TCR findings and my attribution analysis leads to a more complete picture: RGGI may have modestly reinforced a reduction trend it did not create, while today it has reversed sign and is now adding to system-wide emissions rather than reducing them.
The Reform Scenario: The NJ $7 Proposal
The TCR 2026 white paper breaks new and useful analytical ground by evaluating a specific structural reform. New Jersey has been exploring a proposal to fix the RGGI compliance price for its generators at $7 per short ton — far below both the current market clearing price and the CCR Tier 2 cap of $29.25/ton used as the 2026 paper’s base case. TCR’s simulation of this proposal is revealing: the $7 fixed-price scenario would reduce PJM-wide CO₂ emissions by an average of 4.7 million short tons per year relative to the high-price base case, and would save New Jersey consumers approximately $274 million per year in wholesale energy costs.
The mechanism runs exactly in reverse of the high-price leakage problem. At $7/ton, the compliance cost adder for New Jersey’s efficient combined-cycle generators is small enough that they remain competitive in the PJM dispatch stack against non-RGGI coal plants. Gas-fired CC units in New Jersey dispatch more, coal plants in western PJM dispatch less, and system-wide emissions fall. The program at $7/ton functions more like a modest carbon fee that funds state clean energy investments without distorting the dispatch order in harmful ways — which is, notably, exactly how RGGI functioned during its first decade, when prices were generally below $5/ton.
This analysis raises a question worth exploring in future posts: is the concept of RGGI broken, or is it the current price level that has broken RGGI? The TCR 2026 paper’s findings suggest the latter. A reformed RGGI with substantially lower and more stable allowance prices might actually accomplish what the program’s proponents claim it does today — reduce emissions without imposing unacceptable consumer costs. At current prices, those claims are simply not supported by the evidence.
The Virginia Complication
Both my May 2026 post on Virginia’s rejoining and the TCR 2026 sensitivity analysis point in the same direction: Virginia re-entering RGGI at current price levels makes matters worse, not better. The TCR 2026 paper finds that baseline costs to New Jersey consumers are lower when Virginia is not a RGGI participant, and that the CO₂ emission reductions achievable through the NJ $7 Proposal are larger when Virginia stays out. My own compliance analysis found that Virginia’s addition tightens the allowance pool and is likely to accelerate the depletion of available allowances, which I project runs out in the third quarter of 2033 at constant emission rates.
What makes the Virginia situation particularly concerning is the price signal. When Governor Spanberger’s commitment to rejoin RGGI was announced in November 2025, RGGI futures prices rose more than 30% in three days, breaking all-time highs above $40/ton. That price spike immediately flowed into generator bids and was “showing up in electric prices” as I noted at the time. RGGI’s volatility at current scarcity levels — any news about program participation moves the market sharply — compounds the cost problem for consumers and the planning problem for grid operators.
The Bottom Line
The TCR 2025 white paper’s own “Bottom Line” section (Section 4.4) contains language that I could have written: the continuation of RGGI in its current form “contradicts RGGI’s principal intent, which is to reduce greenhouse gas emissions,” and the program “appears, quite clearly, to have outlived its stated objective in PJM and from a policy perspective is in need of significant realignment if not elimination.”
That conclusion, reached by professional power market economists using rigorous quantitative simulation, validates the core argument I have been making my work through historical and analytical work. Two independent lines of inquiry — one empirical and narrative, one formal and computational — have converged on the same answer.
The path forward is not necessarily to abandon carbon pricing in the electricity sector. The TCR 2026 paper’s $7/ton analysis suggests that a reformed program with much lower and stable prices could work better on both the cost and environmental dimensions simultaneously. But the current program, at current prices, with the current cap trajectory, is failing on both dimensions at once. Proponents who continue to claim that RGGI reduces emissions and lowers consumer costs now have two independent analyses to refute — not just my work.
Pragmatic Environmentalist of New York 