Category: Regional Greenhouse Gas Initiative

I submitted comments on the 2025 Operating Plan Amendment (“Amendment”) for the Regional Greenhouse Gas Initiative (RGGI).  This is the sixth time I have comments on Operating Plan amendments and this post summarizes my latest submittal.

Dealing with the RGGI regulatory and political landscapes is challenging enough 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 details of 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

Background

RGGI is a market-based program to reduce greenhouse gas emissions (GHG) (Factsheet). It has been a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector since 2008.  New Jersey was in at the beginning, dropped out for years, and re-joined in 2020. Virginia joined in 2021 but has since withdrawn, and Pennsylvania recently decided not to join. According to a RGGI website:

The RGGI states issue CO2 allowances that are distributed almost entirely through regional auctions, resulting in proceeds for reinvestment in strategic energy and consumer programs.

Proceeds were invested in programs including energy efficiency, clean and renewable energy, beneficial electrification, greenhouse gas abatement and climate change adaptation, and direct bill assistance. Energy efficiency continued to receive the largest share of investments.

NYSERDA Operating Plan

The New York State Energy Research & Development Authority (NYSERDA) designed and implemented a process to develop and annually update an Operating Plan which summarizes and describes the initiatives to be supported by RGGI auction proceeds.  The latest Draft RGGI Operating Plan Amendment explains that

 New York State uses RGGI proceeds to promote and implement programs for energy efficiency, renewable or non-carbon emitting technologies, and innovative carbon emissions abatement technologies with significant carbon reduction potential, in accordance with 21 NYCRR Part 507 and in compliance with the Climate Leadership and Community Protection Act (CLCPA).

This year, consistent with authorized RGGI uses, and to highlight the link between RGGI programmatic investments and core state priorities, we have organized our RGGI programmatic investments in terms of four themes, which are the following:

• Affordability: The programmatic investments under this theme focus on creating affordable, efficient, healthy, and comfortable homes and workplaces by deploying commercially available energy efficiency, building electrification, and renewable energy technologies.

• Energy abundance, diversity, and reliability: The programmatic investments under this theme focus on understanding and building out diverse energy options, including responsible renewable generation and storage, as well as modernizing energy system infrastructure, planning, and markets.

• Energy innovation and economic development: The programmatic investments under this theme focus on supporting economic growth and competitiveness, including enabling job, tax revenue, and supply chain growth; stimulating entrepreneurship and company growth in New York; and expanding public-private partnerships and investments.

• Thriving communities and environments: The programmatic investments under this theme focus on helping New Yorkers equitably participate and share in the benefits of the clean energy future; ensuring the energy transition provides meaningful benefits to local communities and disadvantaged communities; and improving climate resiliency and adaptation and public and environmental health.

Investment Priorities and RGGI Compliance

As far as I can tell I have submitted comments on six amendments to the Operating Plan.  Given my decades-long emission and allowance reporting responsibilities in the electric sector, it is not surprising that the primary concern in all my comments has been related to compliance obligations.  In my opinion, NYSERDA ignores the fact that RGGI is not just a pot of money to exploit but is at its core a pollution control program that includes compliance obligations for electric generating units in the program.   This year is particularly important because of the more stringent RGGI caps proposed in the 6 NYCRR Part 242 CO2 Budget Trading Program amendments that I discussed recently.

The compliance challenge is illustrated in Figure 1.  Relative to the three baseline years before RGGI started New York RGGI emission are down 33%.  The primary reason for the observed reduction is due to fuel switching from coal and oil to natural gas.  I believe that the fuel price differential for natural gas use was much greater than the added cost of RGGI allowances, so the main driver of the observed reductions was economic fuel switching.   Also note that this option is not available anymore.

Figure 1: New York State Emissions by Fuel Type

NYSERDA RGGI Funding Emission Savings

The estimated emission savings from historical NYSERDA investments are described in the Semi-Annual Status Report through December 2024.  The description states that:

This report is prepared pursuant to the State’s RGGI Investment Plan (2024 Operating Plan) and provides an update on the progress of programs through the quarter ending December 31, 2024. It contains an accounting of program spending; an estimate of program benefits; and a summary description of program activities, implementation, and evaluation. An amendment providing updated program descriptions and funding levels for the 2024 version of the Operating Plan was approved by NYSERDA’s Board in January 2025.

Table 1 is a copy of Table 1 in the latest full-year Semi-Annual Status Report.  It summarizes the effectiveness of the NYSERDA investments and lists expected cumulative portfolio benefits including emissions savings.

Table 1. Summary of Expected Cumulative Portfolio Benefits through December 31, 2024

Comparison of NYSERDA Cumulative Emissions Savings to Observed Emission Reductions

Table 2 presents the relevant data to compare the observed reductions and NYSERDA RGGI investment emission savings.  I list the last five years of data starting in 2019 when the emissions went up because of the closure of Indian Point.  Reductions from the 2006-2008 average baseline are listed.  The emissions savings listed are cumulative annual emissions.  If the RGGI proceeds were invested, then the total emissions would be higher by the amount of the savings.  The total cumulative annual emission savings through the end of 2023 is only 1,976,101 tons and that represents a reduction of 4.2% from the pre-RGGI baseline.  Emission reductions by fuel type clearly show that fuel switching is the primary cause of reductions.

Table 2: NY Electric Generating Unit Emissions, NYSERDA GHG Emission Savings from RGGI Investments, and Emissions by Fuel Type

New York RGGI Program Investment Reductions

Another finding that has been ignored or possibly covered up by NYSERDA is the poor emission reduction cost effectiveness of NYSERDA investments.  Table 3 lists data from Semi-Annual Status Report through December 2024 Table 2.  The report presents “expected quantifiable benefits related to carbon dioxide equivalent (CO2e) reductions, energy savings, and participant energy bill savings with expended and encumbered funds” but I only considered the CO2e reductions.  Note that the emission savings evaluated in the report include carbon dioxide, methane, and nitrous oxide that are not included in RGGI.  I did not use “lifetime” savings data because I am trying to compare the RGGI program benefits emission savings reductions to the RGGI compliance metric of an annual emission cap.  Lifetime reductions are clearly irrelevant.  The observed cost per ton of emissions savings is $583.

Table 3: RGGI Funding Status Report Table 2: Summary of Total Expected Cumulative Annual Program Benefits

Program Benefit Impacts on RGGI

I categorized programs relative to RGGI compliance obligation support based on the Semi-Annual Status Report through December 2024.  The table breaks down the program allocations and expected annualized CO2 savings for three categories: direct reductions to RGGI sources, indirect reductions, and those programs that will increase electric generating emissions. An example of a program that increases RGGI emissions is NYSERDA’s Clean Transportation Program that “has been pursuing five strategies to promote EV adoption by consumers and fleets across New York”.   The emission reductions claimed are from decreased internal combustion engine vehicles, so the reductions do not reflect reductions in RGGI electric generating units.  In addition, increased electricity for charging will require RGGI facilities to operate more thus increasing their emissions.

The results in the Funding Status reports summarized in Table 4 show that since the start of the program NYSERDA has allocated $101.6 million to programs that directly reduce utility emissions achieving emission savings of 202,422 tons, $1,007.6 million for programs that indirectly reduce utility emissions savings by 1,634,000 tons, and $178.5 million for programs that will increase utility emissions by 395,152 tons.  When emissions savings from non-RGGI sources are removed, total savings are 1,827,575 tons instead of 2,221,757.

Table 4: Summary of Expected Cumulative Annualized Program Benefits through 31 December 2024 for Programs that Directly, Indirectly, or Do Not Affect RGGI CO2 Emissions

Reduction Potentials

I evaluated the potential effectiveness of the proposed funding allocations relative to RGGI compliance support.  I reviewed each proposed program and classified each program into six categories of potential RGGI source emission reductions.  The first three categories covered programs that directly, indirectly or could potentially decrease RGGI-affected source emissions.  I also included a category for programs that will add load that could potentially increase RGGI source emissions such as programs to incentivize electrification.  The two other categories considered programs that do not affect emissions and administrative costs respectively.

The results are in Table 5.  The first three categories cover programs that directly, indirectly, or could potentially decrease RGGI-affected source emissions and account for 53% of investments which is up sharply from the 2025 Amendment which only allotted 31% of the investments. This positive development occurred because Empower+ funding doubled and the Retrofit Challenges Programs funding increased sharply.  Programs that will add load that could potentially increase RGGI source emissions and whose emissions savings are unrelated to the electric sector total 20% of the investments.  Programs that do not affect emissions are funded with 18% of the proceeds and administrative costs total another 9%.  The increased preference for funding that could reduce RGGI emissions is a good development.  On the other hand, Administration costs are 8.8% of the total and programs that have nothing to do with emissions total 18%.  In my opinion, those are programs that should be funded from other sources.

Table 5: Potential for RGGI Reductions for Funding Allocations for 2025 Operating Plan Amendments

RGGI Compliance Summary

Figure 1 shows that no further fuel switching emission reductions are available.  Affected sources have no remaining options to comply with RGGI mandates other than limiting operations.  Future emission reductions are only possible if zero-emission resources displace the generation of RGGI-affected sources.  However, there is a complicating factor that makes emphasis on reducing RGGI-affected emissions more important.  The New York State Department of Environmental Conservation (DEC) recently announced revisions to 6 NYCRR Part 242 – CO2 Budget Trading Program the regulation that sets the New York RGGI allowance cap. 

Comparison of the revised cap starting in 2027 with the New York State Energy Plan shows that in 2029 projected emissions are double the RGGI cap.  Table 10 lists projections starting in 2027 that range from 49.3 to 40.3 MMT.  The 2023 observed emissions from RGGI sources was 28.7 MMT.  Table 6 lists the proposed RGGI cap or limit on tons of CO2 permitted.  There is a big difference between the Pathways Analysis projection and the RGGI cap.  There are some mitigating factors because of the Climate Act accounting methodology, but I believe that the Pathways Analysis emissions are well more than the cap.

Table 6: Comparison of RGGI Proposed Part 242 Cap and State Energy Plan Pathways Analysis Electric Power Scenario Projections

Discussion

My primary concern is that RGGI is an electric sector emissions reduction program.  I have shown that the observed electric sector emission trends indicate that the observed reductions occurred because of fuel switching from coal and oil to natural gas and that there are no more fuel switching opportunities. Therefore, programs that materially decrease electric sector emissions directly or indirectly through energy use reductions should be a priority because affected sources have no other compliance options. There are programs in the amendment that do not meet these criteria.  It is only appropriate to fund the non-priority programs if sufficient funding has been allocated to make the emission reductions necessary to meet RGGI compliance mandates.  

These results should be used to determine funding priorities.  There are significant differences in the expected emission reductions for different programs and that should also be considered when allocating revenues.  While the fraction of funding allocations that could potentially decrease RGGI source emissions has gone up I think that more emphasis is needed to assure compliance and avert compliance problems.

Conclusion

NYSERDA has treated RGGI allowance auction revenues as a convenient slush fund totaling 18% of total funding for whatever politically connected program needs money.  As a result, investments that reduce emissions and support those most impacted by increased costs received less funding.

I have regularly prepared updates on the Regional Greenhouse Gas Initiative (RGGI) annual Investments of Proceeds report.  Last year I combined the update with lessons to be learned concerning the relative emission reduction effectiveness of the different investments categories used in the reports.  This post updates my past summaries and summarizes the implications relative to the recently completed Third Program Review.

Dealing with the RGGI regulatory and political landscapes is challenging enough 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 details of 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.

Background

RGGI is a market-based program to reduce greenhouse gas emissions (GHG) (Factsheet). It has been a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector since 2008.  New Jersey was in at the beginning, dropped out for years, and re-joined in 2020. Virginia joined in 2021 but has since withdrawn, and Pennsylvania has joined but is not actively participating in auctions due to on-going litigation. According to a RGGI website:

The RGGI states issue CO2 allowances that are distributed almost entirely through regional auctions, resulting in proceeds for reinvestment in strategic energy and consumer programs.

Proceeds were invested in programs including energy efficiency, clean and renewable energy, beneficial electrification, greenhouse gas abatement and climate change adaptation, and direct bill assistance. Energy efficiency continued to receive the largest share of investments.

Despite claims about the success of RGGI, the reality is that the only thing it is good at is raising money.  Suggestions that RGGI has been responsible for the observed reductions in CO2 emissions over the life of the program ignore the importance of fuel switching and the poor performance of RGGI auction proceed investments in reducing emissions.  I document these  observations below.

Proceeds Investment Report

The 2023 investment proceeds report was released on July 16, 2025.  According to the press release: “In 2023, $852 million in RGGI proceeds were invested in programs including energy efficiency, clean and renewable energy, beneficial electrification, greenhouse gas abatement, and direct bill assistance. Over their lifetime, these 2023 investments are projected to provide participating households and businesses with $2.7 billion in energy bill savings and avoid the emission of 7.8 million short tons of CO2.”  The report breaks down the investments into major categories.  The 2023 investment report explains:

Energy efficiency makes up 64% of 2023 RGGI investments and 56% of cumulative investments. Programs funded by these investments in 2023 are expected to return about $1.9 billion in lifetime energy bill savings to more than 181,000 participating households and 1,083 businesses in the region and avoid the release of 5.3 million short tons of CO2.

Clean and renewable energy makes up 6% of 2023 RGGI investments and 12% of cumulative investments. RGGI investments in these technologies in 2023 are expected to return over $647 million in lifetime energy bill savings and avoid the release of more than 1.9 million short tons of CO2.

Beneficial electrification makes up 9% of 2023 RGGI investments 4% of cumulative investments. RGGI investments in beneficial electrification in 2023 are expected to avoid the release of 436,000 short tons of CO2 and return over $94 million in lifetime savings.

Greenhouse gas abatement and climate change adaptation makes up 2% of 2023 RGGI investments and 7% of cumulative investments. RGGI investments in greenhouse gas (GHG) abatement and climate change adaptation (CCA) in 2023 are expected to avoid the release of more than 49,000 short tons of CO2.

Direct bill assistance makes up 15% of 2023 RGGI investments and 15% of cumulative investments. Direct bill assistance programs funded through RGGI in 2023 have returned over $128 million in credits or assistance to consumers.

This official story about the virtues of RGGI investments does not square with reality.

Emission Reductions

All my summaries of the RGGI Investment Proceeds reports have found the same results.  Since the beginning of the RGGI program, RGGI funded control programs have been responsible for a small fraction of the observed reductions – only 7.6% in 2023 (Table 1).  The primary reason for the observed reductions has been fuel switching away from coal and oil to natural gas.  Importantly, the availability of potential fuel switching in the RGGI fleet of electric generating units is running out.  Consequently, future reductions will have to rely on the deployment of zero-emission generating resources and load reductions which makes cost-effective emission investments important. 

Table 1: State-Level CO2 Emissions for Nine RGGI States 2009 to 2024

The importance of cost-effective investments for emission reductions is unacknowledged.  I calculate cost effectiveness by dividing the RGGI total investments divided by the estimated avoided CO2 emissions. In 2022 the CO2 emission reduction efficiency was $949 per ton of CO2 reduced but in 2023 the cost per ton reduced increased to $1,854.  Because there is no obvious change in investment strategies, I think the differences are due to changes in the calculation methodology.  This cannot be confirmed because there is insufficient documentation.

Table 2: Accumulated Annual RGGI Proceeds, Avoided CO2, and Cost Efficiency

Emission Reduction Costs

RGGI is supposed to be an emissions reduction program.  On July 3, 2025, RGGI announced the results of the Third Program Review that modified the requirements for future reductions.  Based on my analysis of the planned revisions, the RGGI States only delayed the inevitable reckoning of the futility of this program to achieve the goal of a “zero-emissions” electric system.  The RGGI summary  of the revisions states that the revised mandated reductions will “decline by an average of 8,538,789 tons per year, which is approximately 10.5% of the 2025 budget” from 2027 to 2033.

Table 3 lists the cost per ton of CO2 removed of the RGGI investments from 2015 to 2023, the cost to reduce 8,538,789 tons per year using their observed costs, and the RGGI proceeds for each year.  In 2023 the Third Program Review mandated annual emission reduction multiplied by the cost per ton ($1,854) totals $15.8 billion but the RGGI proceeds were only $0.85 billion.  Even using the cost over the entire period of $849 per ton, it would cost $7.25 billion to make the reductions mandated.  This is still far short of the proceeds available.

Table 3: Annual RGGI Cost Efficiency, Cost to Meet 2027 RGGI Annual Reduction, and Annual Proceeds

Investment of Proceeds Summary

The 2023 investment proceeds report breaks down the investments into major categories. I added the annual values for each category to provide the following summary (Table 4).  Note that the overall cost effectiveness is $1,174 per ton avoided.  Clearly the proceed investment strategy is not emphasizing emission reduction effectiveness.  It is encouraging that savings of $924 million are claimed but total investments are $2,251 million.   In my opinion, these numbers are inconsistent with claims that RGGI is successful.

Table 4: RGGI Proceeds Report Investment Category Annual Totals

Cost Effectiveness Implications

One of my big concerns about any cost on carbon emissions is that it is a regressive stealth tax on energy.  There is a tradeoff between trying to minimize those impacts and reducing emissions.  In the last six years $371 million or 16% of the RGGI auction proceeds went to direct bill assistance, which is good but that means that much less was available to reduce emissions (Table 5).  Throw in the $132 million over the last 6 years for administration that means that 23% of the RGGI auction proceeds were not used to reduce emissions.

Table 5: Summary of Recent RGGI Categorial Investments and Avoided Emissions Over the Last 6 Years

This article compares the cost effectiveness of emission reductions for the following investment categories: energy efficiency, clean and renewable energy, beneficial electrification, greenhouse gas abatement and climate change adaptation (Table 3).  For the investment categories that provided emission reductions Clean and Renewable Energy was the most effective way to reduce emissions.  As far as I can tell this category provides the most funding for projects that directly reduce emissions.  It is encouraging that the energy efficiency is right around the average over all categories.  This means that energy efficiency programs targeted at low- and middle-income households most affected by this energy tax will provide effective emission reductions but only at a cost near $1,000 per ton. 

On the other hand, programs promoting the research and development of GHG abatement and climate change adaptation are less effective at reducing emissions.  Perhaps a greater emphasis on programs promoting reduction of emissions in the power generation sector and advanced energy technologies and less emphasis on programs for the reduction of vehicle miles traveled, tree-planting projects designed to increase carbon sequestration, and climate adaptation and community preparedness initiatives would improve emission reduction efforts consistent with the emission reduction goal of RGGI.

The worst emission reduction programs are associated with beneficial electrification that are “designed to reduce fossil fuel consumption by implementing or facilitating fuel-switching to replace direct fossil fuel use with electric power.“  This category was added recently.  There are two ways to look at the high numbers.  On one hand, it could be that it recognizes that reductions of overall fossil fuel consumption require efforts across all sectors.  On the other hand, I think it inappropriately transfers costs to the electric sector that do not provide efficient emission reductions.

Discussion

As noted previously, since the beginning of the RGGI program RGGI funded control programs have been responsible for a small fraction of the observed reductions (e.g., only 7.6% in 2023).  The primary reason for the observed reductions has been fuel switching away from coal and oil to natural gas. There are limited opportunities to make further fuel switching changes.   Consequently, future reductions will have to rely on the deployment of zero-emission generating resources.  This means that compliance with the RGGI emission caps is out of the control of the affected generating units and that RGGI investments must fund much of the reductions needed.

New York’s Value of Carbon guidance estimates that the 2025 cost of carbon at a 2% discount rate is $133.75.  Per this guidance, when used for a damages-based approach to valuing greenhouse gas emissions, the value of carbon provides a monetary estimate of the impacts on society from activities that are a source of greenhouse gas emissions. The estimated emission reductions cost per ton removed exceeds that limit for every year and every investment category.  This suggests that the emission reduction costs exceed the societal benefits expected.

The ostensible purpose of RGGI is to reduce emissions.  In theory the auction proceeds would be invested to facilitate emission reduction programs but categorial investments do not reflect that as a priority.  The beneficial electrification category is the worst.  It illustrates the tendency for government funding priorities to shift away from the original priorities of the program.

The RGGI funding priorities do not reflect the necessary funding required to meet the annual reduction mandates in the recently approved Third Program Review modifications. Using the future mandated emission reduction and the observed 2023 reduction efficiency (8,538,789 tons multiplied by the cost per ton $1,854) totals $15.8 billion.  However, the RGGI proceeds in 2023 were only $0.85 billion.   These results show that RGGI investments will not provide the emission reductions mandated.  That leaves the question – where will the reductions come from?

Conclusion

These results support my conclusion that RGGI can only claim to raise money effectively.  Claims that RGGI is a successful emission reduction program are inconsistent with the following observations.  The investment costs exceed the expected societal benefits.  The amount raised falls far short of the funds necessary to reduce RGGI emissions in accordance with Third Program Review requirements.   Investment priorities are inconsistent with the emission reduction objectives.  Finally, emission reductions associated with RGGI investments only account for 7.6% of the observed reductions.

Someday, the shortcomings of the RGGI approach will result in serious problems. When the only compliance option available to generating plants is to reduce operations, then an artificial energy shortage will result. 

The Regional Greenhouse Gas Initiative (RGGI) is a market-based program to reduce CO2 emissions from electric generating units.  One aspect of RGGI is a regular review of the program status and need for adjustments.  On July 3, 2025, RGGI announced that results of the Third Program Review.  Based on my analysis of the planned revisions, the RGGI States only delayed the inevitable reckoning of the futility of this program to achieve the goal of a “zero-emissions” electric system.

Dealing with the RGGI regulatory and political landscapes is challenging enough 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 details of 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.

Background

RGGI is a market-based program to reduce greenhouse gas emissions (GHG) (Factsheet). It has been a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector since 2008.  New Jersey was in at the beginning, dropped out for years, and re-joined in 2020. Virginia joined in 2021 but has since withdrawn, and Pennsylvania has joined but is not actively participating in auctions due to on-going litigation. According to a RGGI website:

The RGGI states issue CO2 allowances that are distributed almost entirely through regional auctions, resulting in proceeds for reinvestment in strategic energy and consumer programs.

Proceeds were invested in programs including energy efficiency, clean and renewable energy, beneficial electrification, greenhouse gas abatement and climate change adaptation, and direct bill assistance. Energy efficiency continued to receive the largest share of investments.

The RGGI States regularly review successes, impacts, and design elements of the program.  This is the third iteration of the review program.  It started in February 2021 and finally was completed in June 2025, years behind schedule.

I was an active participant in the program review.  I described my initial comments in October 2023 addressing the disconnect between the results of RGGI to date relative to the expectations in the RGGI Third Program Review modeling.  Last October I submitted more comments as described here.  I also described other comments submitted to RGGI.

Third Program Review Summary

The RGGI summary of the program review changes states:

The 10 states participating in the Regional Greenhouse Gas Initiative (RGGI) have agreed to strengthen their regional carbon dioxide (CO₂) emissions cap through 2037, starting in 2027, and establish new mechanisms to protect energy affordability. These updates will ensure the longstanding bipartisan initiative’s continued success in promoting clean air, health and economic benefits across the region. States also agreed to launch their next Program Review no later than 2028, as part of their commitment to regularly evaluate their CO₂ budget trading programs. The next Program Review will consider factors such as changes in energy policy, the pace and scale of electricity load growth, progress in clean energy deployment, and ongoing efforts to ensure energy affordability.

The updates are designed to:

• Provide stability and certainty to market participants, including power producers who purchase allowances to match their emissions and developers of new electricity generation resources.
• Ensure access to sufficient RGGI allowances to meet expected energy demand and bolster price protection for consumers. RGGI states will continue to invest the proceeds from those allowances into programs that lower electricity bills and provide economic benefits to local communities, including energy efficiency, renewable energy, and bill assistance programs.
• Confirm states’ long-term commitments to energy affordability, public health, and the environment, maintaining an economic climate in which innovative companies and the region’s workforce thrive.

Changes to the Allowance Allocation Budget

The allocation budget sets the limits on future emissions. Strengthening the cap means reducing the allocations. The RGGI summary describes the changes to the budget:

The updated Model Rule reduces the regional emissions cap in 2027 to 69,806,919 tons of CO₂ from 75,717,784 tons under the previous Model Rule (Figure 1). Allowances decline by an average of 8,538,789 tons per year, which is approximately 10.5% of the 2025 budget, thereafter through 2033. Then, from 2034 through 2037 the cap will decline by 2,386,204 tons of CO₂ annually, which is approximately 3% of the 2025 budget. Subsequent years are set to match the 2037 emissions cap. No adjustments are made to banked allowances, which continue to be available for compliance.  (As of July 2025, the estimated bank of privately held allowances more than RGGI compliance obligations is around 67 million tons.) Setting the regional cap beyond 2037 will be addressed in the next RGGI Program Review, to begin no later than 2028.

This figure compares the current regional base cap (light blue) with the updated cap trajectory (dark blue). The orange and yellow lines display the total updated regional cap if all allowances are released from the updated first and second Cost Containment Reserve (CCR)  tiers, respectively.

This figure compares the current regional base cap (light blue) with the updated cap trajectory (dark blue). The orange and yellow lines display the total updated regional cap if all allowances are released from the updated first and second Cost Containment Reserve tiers, respectively.

The two-tiered CCRs is another revision in the Third Program Review. The CCR is a reserve of allowances that is released if costs exceed certain limits.   In my comments on the draft revisions, I argued that the biggest issue is how the allowances allocated for the annual caps and the bank of already allocated allowances held compared with actual emissions.  Environmental activists demand that the allowance cap “bind” emissions to ensure that the reductions occur on their preferred arbitrary trajectory.  They don’t understand that a binding cap will limit emissions even if the zero-emissions resources are not available to displace the existing emissions.  The ramifications of that situation are enormous.  In the worst case, an electric generating unit needed to keep the lights on will refuse to operate because they have insufficient allowances.  The two-tier CCR resolves this problem for a while anyway.

Table 1 quantifies the allowance allocations for the Policy Update, the Current Program and includes the allowance bank from the RGGI Secondary Market Monitoring Report.  Note that trying to figure out the allowance allocations is a non-trivial task so I relied on a Perplexity AI search.  The numbers do not match but for my purposes that is not a concern. One of the controversial topics during the Third Program Review was the acceptable size of the allowance bank.  Activists without any compliance responsibilities think the bank should be zero.  Regulated entities and the regulators recognize that the bank is required because it represents current compliance obligations, a safety margin for extreme weather conditions, and that non-compliance entities own a significant share of the bank.  The regulators and the regulated entities argue about the size of the bank but not its necessity.  There is another important aspect of the bank.  Regulated entities generally purchase allowances as needed and keep their banked allowances at a fixed percentage of expected emissions.  In other words, there is no nefarious reason for the bank.

Table 1: RGGI Allowance Allocations 2015- 2040 and Recent Allowance Bank

Table 2 compares recent emissions to the Current Program allowance allocations and the Policy Update allowance allocations.  The observed emission trend since 2015 is affected by the addition of New Jersey and Virginia to the program so I included the emissions without Virginia.  Note that there is quite a bit of interannual variation and an increase in emissions between 2019 and 2022.  The increase in emissions was affected by New York’s idiotic shutdown of 2,000 MW of zero-emissions nuclear power.  The takeaway from this is that since 2015 there hasn’t been any major reduction in emissions despite RGGI investments and Federal subsidies. 

Table 2: RGGI Emissions and Allowance Allocations 2015 – 2040

In 2027 the Policy Update mandates a 20% reduction in the allowance allocated.  Initially that could be covered by dipping into the allowance bank, but eventually existing fossil generation must be displaced by zero-emissions resources. My back of the envelope estimate is that 2.8 GW of solar, 2.4 GW of onshore wind, and 1.2 GW of offshore wind would have to come online to displace the fossil emissions necessary to meet the 2027 allowance allocation decrease.  The other alternative is that compliance entities will compete to buy allowances necessary for compliance and trigger a price increase that will kick in the Cost Containment Reserve which will provide enough allowances for compliance.  As the Policy Update steep reduction requirements continue eventually the second Cost Containment Reserve will kick in.  Inevitably, there will come a time when the only viable control option is for zero-emission resources to displace the fossil units to meet the compliance requirements.  In my opinion, the reduction trajectory was based on meeting aspirational targets in the Climate Act and other state’s programs rather than a feasibility projection of what could reasonably be implemented.

Discussion

Cap-and-invest programs like RGGI are frequently touted as a program that will kill two birds with one stone: “It simultaneously puts a limit on the tons of pollution companies can emit — ‘cap’ — while making them pay for each ton, funding projects to help move the jurisdiction away from polluting energy sources — ‘invest.'”  That is the theory and RGGI is the experiment.

The RGGI experiment is getting more complicated which I think accounts for the long delay finalizing the policy update.  The changes to the participating states was a major reason for the delay. A reasonable allowance reduction trajectory when Virginia or Pennsylvania was in the program will not be reasonable when either state is not in the program because their emissions are large and there is more opportunity for fuel switching reductions.  When you consider the conflicting reduction goals of the states the challenge of an acceptable consensus becomes very difficult.

The RGGI Policy updates were designed to support three goals.  Firstly, “Provide stability and certainty to market participants”.  The power producers now know when it is unlikely that there will be sufficient allowances for fossil units to continue to operate like they currently do.  My bet is 2032 when the allowances allocated in the Policy Update plus both CCR allocations will be 30% less than current emissions because I do not think that there will be sufficient zero emission renewable resources developed by then.  The second goal was to “Ensure access to sufficient RGGI allowances to meet expected energy demand and bolster price protection for consumers.”  The Policy Update provides access for now.  They have punted accountability for this goal, and I bet that by 2032 the goal will be unattainable.  The final goal is “long-term commitments to energy affordability, public health, and the environment, maintaining an economic climate in which innovative companies and the region’s workforce thrive”.  This is just a marketing slogan.

Late last year I published an article that documented that RGGI performance to date,  The results are not promising.  The RGGI States claim that they will continue to “invest the proceeds from allowances into programs that lower electricity bills and provide economic benefits to local communities, including energy efficiency, renewable energy, and bill assistance programs.”  Given that recent Federal legislation is cutting subsidies to renewable development the priorities of proceed investments needs to be revisited.  While bill assistance programs are necessary to reduce impacts to those least able to afford the RGGI carbon tax, the observed performance of RGGI emission reduction investments for energy efficiency and renewable energy projects has not been good enough to expect that the ambitious emission reduction targets can be achieved using RGGI proceeds.

Ultimately, I am convinced that no GHG emission reduction cap-and-invest program will succeed.  Danny Cullenward and David Victor’s book Making Climate Policy Work explains why.    They note that the level of expenditures needed to implement the net-zero transition vastly exceeds the “funds that can be readily appropriated from market mechanisms”.  Even though RGGI allowance prices will increase significantly, they still will be insufficient to fund the necessary development of zero emission resources.  Note that when the allocations go down the proceed will drop too.  I intend to follow up this post with another specifically addressing auction price ramifications.

Conclusion

The Third Program Review Policy Update features an allowance allocation schedule that is consistent with RGGI State net-zero regulations.  That trajectory is inconsistent with wind and solar deployment history and reasonable expectations.  As a result, there eventually will be insufficient allowances available for CO2 emitting generation resources to operate.  The use of a CCR and addition of a second CCR will delay the inevitable reckoning but in less than ten years I expect that RGGI will need to be abandoned as a feasible emission reduction strategy.

The Regional Greenhouse Gas Initiative (RGGI) is a market-based program to reduce emissions from electric generating units.  One aspect of RGGI is a regular review of the program status and need for adjustments.  This article describes my latest comments on the Third Program Review process.

I have been involved in the RGGI program process since its inception.  I blog about the details of the RGGI program because very few seem to want to provide any criticisms of the program.   I submitted comments on the Climate Act implementation plan and have written over 450 articles about New York’s net-zero transition because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that the net-zero transition will do more harm than good.  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.

Background

RGGI is a market-based program to reduce greenhouse gas emissions (GHG) (Factsheet). It has been a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector since 2008.  New Jersey was in at the beginning, dropped out for years, and re-joined in 2020. Virginia joined in 2021 but has since withdrawn, and Pennsylvania has joined but is not actively participating in auctions due to on-going litigation. According to a RGGI website:

The RGGI states issue CO2 allowances that are distributed almost entirely through regional auctions, resulting in proceeds for reinvestment in strategic energy and consumer programs.

Proceeds were invested in programs including energy efficiency, clean and renewable energy, beneficial electrification, greenhouse gas abatement and climate change adaptation, and direct bill assistance. Energy efficiency continued to receive the largest share of investments.

The RGGI States regularly review successes, impacts, and design elements of the program.  This is the third iteration of the review program.  It started in February 2021 and there is no schedule for its completion.  The description states:

To support the Third Program Review, the states will:

• Conduct technical analyses, including electricity sector modeling, to inform decision-making related to core Program Review topics, such as the regional CO₂ emission cap.
• Solicit input from communities, affected groups, and the general public on the Program Review process and timeline, core topics and objectives, modeling assumptions and results, and other policy and design considerations.
• Convene independent learning sessions with experts and other interested parties on key design elements.

I have previously posted an article describing my earlier comments to RGGI addressing the disconnect between the results of RGGI to date relative to the expectations in the RGGI Third Program Review modeling.  I have also described other comments submitted to RGGI.

The overarching problem with GHG emission market-based programs is that carbon dioxide emissions are directly tied to fossil-fuel combustion and energy production.  If for any number of reasons, the zero-emissions are not deployed fast enough there won’t be enough credits within the cap available to cover the emissions necessary to provide the energy needs.  In the worst case, an electric generating unit needed to keep the lights on will refuse to operate because they have insufficient allowances. I do not think that this program review pays sufficient attention to this problem.

The Program Review Update describes the September 23, 2024 update.  There are two distinct components to this update: the release of another modeling scenario and a request for suggestions on how to accommodate other states without upsetting the “environmental ambition” of the states currently participating in RGGI.

IPM Emission Modeling Comments

The basis of the RGGI state program review proposal is modeling done by ICF using the Integrated Planning Model (IPM).  There is not much documentation for the IPM analysis.  The Program Review Update is the only documentation and that consists of “informational slides”.  The “detailed modeling results” are presented in a spreadsheet that does not include a table with explanations of the data provided.  Even though I have reviewed every previous iteration of RGGI IPM modeling results, I had to spend a lot of time trying to decipher what they were doing.  If someone decided to review the modeling analysis without any experience, they would have a very hard time trying to figure out what is going on.  I do not think this lack of documentation is appropriate.

The presentation slides note that “The RGGI states have conducted modeling analysis of an additional exploratory policy scenario”.  In this type of analysis, the policy scenario results are compared to a base case or business as usual scenario. Two cap scenarios were modeled:

• Flat Cap Scenario consistent with current program design
• Exploratory Policy Scenario with an increased reserve price, declining cap to 2037 and a new two-tier CCR.

Results from two cases of the “Exploratory Policy Scenario” are presented in the spreadsheet.  Case A includes “currently contracted renewables only” and Case B includes “on-the-books policies and mandates”.  The Flat Cap Scenario includes on-the-book policies and mandates and the exploratory scenario projects what would happen with the policy changes.  The documentation also notes that renewable cost data has been updated to align with NREL’s 2024 release of the Annual Technology Baseline dataset.  I believe that the updated data were different enough that it was appropriate to do a new current program design base case, i.e., the Flat Cap Scenario. 

I have reservations about the analysis because the IPM projected emissions in 2028 are not credible.  Table 1 lists the observed EPA Clean Air Markets Division annual CO2 emissions for the last three years and the Integrated Planning Model (IPM) projected 2028 emissions for the three modeling scenarios from the results spreadsheet.  IPM projects an overall reduction of more than 50% in four years for Case A  I believe that the analysis over-estimates potential CO2 reductions in the ten RGGI states.  Reductions in this time frame can only occur when wind and solar resources displace the RGGI source generation. My first impression is that it is unlikely that enough wind and solar can be built in that time frame.

Table 1: Comparison of Observed RGGI CO2 Emissions and IPM Projected Emissions (million tons)

Modeling scenario Case A includes “currently contracted renewables only and Case B, used in the Flat case, includes “on-the-books policies and mandates”.  I do not believe that the modeling addresses the fact that renewable rollouts are not going according to contracted renewable plans.  The New York Department of Public Service (DPS) Case Number: 15-E-0302,: Proceeding on Motion of the Commission to Implement a Large-Scale Renewable Program and a Clean Energy Standard recently asked for comments on the DPS staff and the New York State Energy Research and Development Authority’s (NYSERDA) July 1, 2024, filing of the Draft Clean Energy Standard Biennial Review.  Comments submitted by EDF Renewables noted that:

Reflecting on Sections 4 and 5 of the Draft Review with a look at the current state of contracted

renewables and the path to achieving the 70% Goal:

• Out of 156 RES Tier 1 projects that have been awarded, approved, or are pending approval by NYSERDA since 2004, 30 are operational and 23 are still under development.
• 11 of 25 land‐based wind projects are operational and 9 of 116 solar projects are operational. Operational projects have added 1,016 MW of capacity, 821 MW of which are land based wind projects.

11,000 MW of capacity has been cancelled or is still under development.

The Draft Clean Energy Standard Biennial Review itself acknowledged this problem.  It concludes that New York’s Climate Leadership & Community Protection Act 70% renewable energy by 2030 target will not be met until 2033.  The Biennial Review notes:

New York’s progress has been and will continue to be affected by conditions in the larger global markets.  The complex renewable energy supply chain is a global network of materials procurement, processing, production, materials recovery, infrastructure, and logistics operations. As the United States and other nations raise their goals for emission reductions, those supply chains are stressed. Geopolitical tensions and policies incentivizing domestic production of major energy generation equipment also impact the cost and availability of materials and components. High interest rates and inflation – which were prevalent from mid-2021 through mid-2023 across the renewable energy supply chain – also play a role in raising the baseline for renewable energy input prices. While such prices have recently stabilized, input prices are higher than what was forecasted prior to the 2021-2023 inflationary period.

The IPM modeling does not address this reality.  In the absence of documentation citing just how much solar PV, onshore wind, and offshore wind resources were assumed to be deployed in the RGGI IPM modeling analysis I made my own estimate.

My projection of necessary renewable energy is based on evaluation of historical emissions data.  Table 2 lists the observed annual CO2 emissions from the ten-state RGGI region from the EPA Clean Air Markets Division (CAMD) database.  Details on the methodology are available in my comments, a supplementary attachment, and a spreadsheet that describes the analysis details.  Note that there has been a significant drop in CO2 emissions in the RGGI region, but a large portion of those reductions were due to fuel switching from coal and oil to natural gas and retirements of fossil-fired units.  Importantly, the opportunity for further fuel switching reductions is small.  This is the basis for my assertion that most future emission reductions must come from reduced operations at existing fossil-fired power plants due to displacement by renewable deployments. 

Table 2: 10-State EPA CAMD All Program Annual CO2 Emissions by Fuel Type

I used these data and the IPM modeling results to make a projection out to 2028.  I assumed the coal, oil, and other fuel types would go to zero by 2028 and that natural gas emissions equal the emissions projected by IPM in 2028.  I also used these data to project renewable requirements. I used the EPA load data and emissions to calculate the load per ton of CO2 for each fuel type.  I used those parameters to estimate the load associated with the IPM projected emissions in 2028.

In Table 3 I list the estimated renewable displacement load (MWh) value for each scenario.  At the top of the tables, the fossil fired generation load that must be displaced by renewable energy is listed.  For example, 88,630,916 MWh is the amount in the Case A, Exploratory Policy Scenario.  I determined the relative contributions of solar PV, onshore wind, and offshore wind based on results in the IPM modeling spreadsheet.  Those percentages were multiplied by the total load that renewables must displace to estimate how much each type would be needed  I assumed some conservatively high capacity factors for the renewable resources and calculated the capacity (MW) of each resource.  In my opinion, there is very little chance that these levels of solar PV, onshore wind and offshore wind can be deployed by 2028 because of the problems noted in the Biennial Review.

Table 3: Estimated Renewable Deployment Necessary to Achieve IPM RGGI 2028 Emissions

There are other potential problems that could have bigger ramifications.  IPM integrates “wholesale power, system reliability, environmental constraints, fuel choice, transmission, capacity expansion, and all key operational elements of generators on the power grid in a linear optimization framework”.  I think that the optimization process presumes that wind and solar resources can be freely substituted for other dispatchable resources in its estimates of the future electric power system.  However, wind and solar resources are not dispatchable.  It is not clear whether the IPM approach is appropriate for an electric system that has a large renewable component.

Furthermore, I do not know how IPM handles weather dependency of wind and solar in its projections.  My back-of-the-envelope projection for renewable generation necessary to displace fossil fueled resource generation assumes that the replacement is on a one for one MWh basis.  Presently, wind and solar generation is dispatched first because there is no fuel cost.  Fossil resources are being used more and more only as backup when wind and solar is unavailable.  As a result, wind and solar resources displace less and less fossil, as more resources are added.  For example, fossil support for solar resources can never be eliminated at night.  The same holds true for wind because there is a significant correlation of wind facilities across large areas.  For example, on 9/13/2024 at hour 1200 the New York Independent System Operator (NYISO) real-time fuel mix generation from over 2,500 MW of wind capacity across the state, including an offshore wind facility, was zero. 

To accurately project future fossil generation in an electric grid with increasing amounts of intermittent wind and solar, dispatchability and weather dependency must be incorporated.  I understand that the NYISO resource planners use historical meteorological data and associated wind and solar output to account for weather dependency and their resource planning approach incorporates dispatchability concerns.  If IPM does not address this issue correctly, then the results for the future projections have little value and should not be relied on to make future predictions of the RGGI electric system. It would be prudent to compare the IPM modeling results with the projections for future resources developed by regional transmission operators in the region before completing the Third Program review process.

Allowance Price Modeling Comments

One of the key outputs in the Program Design modeling is the price of allowances.  As described in my comments I am not enamored of the ability of the IPM analysis to project allowance prices.  The documentation notes that IPM considers “long-term fundamentals, generation assumptions & costs, economic growth forecast, and government policies.”  I think this is a fatal flaw of the approach because the model has no way to incorporate uncertainty, and the model has perfect foresight.  This is a problem in the first place because the assumptions used for the considerations are subject to change. For example, cost predictions necessarily are affected by future rates of inflation, and no one predicted the recent large changes.  Secondly, these considerations introduce significant uncertainties that affect the deployment of the renewable resources necessary to displace fossil generating units and reduce their emissions.  This in turn affects the scarcity of allowances relative to emissions and that affects allowance prices.   As shown earlier, there are limited remaining opportunities to switch fuels so any delays in renewable deployment will affect future emissions and allowance prices.  The IPM allowance modeling estimates cannot handle these uncertainties, so they are little more than educated guesses.   

Modeling Scenario Comment Conclusion

Given the enormous uncertainties of the transition to zero-emissions in the RGGI states it would be prudent to address this issue directly.  I commend the states for proposing a two-tier CCR solution that, depending on how it is implemented, could deal with the problem simply. 

RGGI has already adopted the Cost Containment Reserve (CCR).  The CCR established a “quantity of allowances in addition to the cap which are held in reserve.”  If allowance prices exceed predefined price levels, these allowances are sold. The CCR is replenished at the start of each calendar year.

Table 4 lists CCR and trigger prices over time.  Note that the March 13, 2024 allowance auction clearing price was $16.00 so the CCR allocation was completely used up.  In the most recent auction, the clearing price was $25.75 which exceeds the 2030 trigger price.  In the two-tier approach another set-aside of allowances will be available for sale in an auction if the price exceeds the second trigger.

Table 4: RGGI Cost Containment Reserve

The ultimate issue is how the allowances allocated for the annual caps compare and the bank of already allocated allowances held compare with actual emissions.  Environmental activists demand that the allowance cap “bind” emissions to ensure that the reductions occur on their arbitrary trajectory.  They don’t accept that a binding cap will limit emissions even if the zero-emissions resources are not available to displace the existing emissions and that the ramifications of that situation are enormous.  In the worst case, an electric generating unit needed to keep the lights on will refuse to operate because they have insufficient allowances.  The two-tier CCR resolves this problem.

Response to “Environmental Ambition” Questions

The second component notes that: “The RGGI states are interested in exploring potential market solutions that could enable such states to link to the RGGI market in the future, including potentially at a cap trajectory which may not align with the RGGI cap trajectory resulting from the Third Program Review.”  In particular, the RGGI states seek stakeholder feedback on potential accommodation mechanisms such as:

• The potential application of allowance trading or compliance ratios between entities in states that have and have not adopted the cap trajectory resulting from the Third Program Review.
• The potential application of volume limits in trading or compliance between entities in states that have and have not adopted the cap trajectory resulting from the Third Program Review.
• The proper basis to determine such potential allowance trading/compliance ratios, or volume limits, including respective emissions cap levels, reduction trajectories, price levels, and/or other relevant factors.
• Other potential mechanisms that would allow for participation by states implementing a cap trajectory that is different than the cap trajectory resulting from the Third Program Review, such as a cap trajectory previously adopted in regulations to be consistent with the current RGGI program, while safeguarding any new environmental ambition achieved by the current RGGI participating states as a result of the Third Program Review.

These mechanisms all would introduce significant logistical tracking and reporting issues.  In addition, the accommodation mechanisms create an incongruous compliance system.  Consider two trading regions:

• Region 1 starting emissions are 1,000 and the region target is zero in ten years, so the allowance reduction trajectory is 100 allowances per year
• Region 2 starting emissions are 2,000 and the region target is zero in twenty years, so the allowance reduction trajectory is also 100 allowances per year

In the first year the sum of the allowance caps for the two regions is 2,800.  If in the first year Region 1 emissions are 1,000 and the Region 2 emissions are 1,800 the sum of the emissions is 2,800 and the two regions are in overall compliance with the combined limit.  However, within Region 1 the sources are out of compliance if they are treated differently.  The desired environmental impact is achieved but all the accommodation mechanisms proposed penalize the sources.

What is the point of all the additional complexity?  The only rationale is that the ambition is different for timing in two different regions and that needs to be considered.  However, the difference in a ton reduced now versus a ton reduced in 2050 is inconsequential to global climate change.  Therefore, I do not think that any of the potential accommodation mechanisms are necessary.

Conclusion

In the comments submitted I address problems I see with the IPM modeling that underpins the Third Program Review proposals.  IPM estimates that CO2 emissions will be 50% lower across the RGGI region by 2028.  I do not think that is reasonable.  I estimated how many renewable resources would need to be deployed to displace RGGI-affected source emissions and this confirmed my concerns. 

I think the results are related to the limitations of IPM.  Documentation related to the New York biennial review of the observed progress of its GHG emission reduction goals has identified supply chain, higher interest rates, inflation, and workforce limitations that have delayed progress in the rollout of New York wind and solar resource deployment.  All these issues add significantly to model input uncertainty.

I have serious concerns with the modeling results.  My comments note that the IPM modelling approach cannot reconcile the deployment uncertainties observed in New York.  Furthermore, it is not clear how well IPM addresses issues related wind and solar weather related dispatchability.   These ambiguities compound the inherent challenges related to allowance price estimates.  As a result, I believe that the limitations of the IPM projections must be addressed in the Program Design elements.

I commend the RGGI proposal to add second CCR tier.  It is a reasonable response to the intractable uncertainties.  It should be an effective response to my concerns if the parameters are chosen correctly.

Finally, I review the proposed solutions to address environmental ambition if other jurisdictions join RGGI.  I do not believe that the additional complexity and logistical implementation issues associated with the proposals is warranted because the difference in ambition is more symbolic than real.