Economic Consequences of Northeastern State Proposals to Limit Greenhouse Gas Emissions from the Electricity Sector (RGGI)

By Charles River Associates Incorporated

The efforts of nine states to limit GHG emissions have been termed the Regional Greenhouse Gas Initiative (RGGI or “ReGGIe”). Currently the group is discussing the design of a regional cap-and-trade program with a market-based emissions trading system initially covering carbon dioxide emissions from power plants in the region. In the future, RGGI may be extended to include other sources of greenhouse gas emissions, and greenhouse gases other than CO2.

In this study, we analyze the impact of the CCAP and SA.2028 limits applied only to the electricity sector. That is, the CCAP policy in this report looks into the impact on the northeast states and the rest of the U.S. economy if the northeast states were to cap carbon dioxide emissions from electric generators at 1990 levels of emissions from generators in 2010, 10% below 1990 levels by 2020, and 80% below 2000 levels by 2050.

This report, based on an analysis commissioned by the American Council for Capital Formation’s Center for Policy Research, summarizes the results of an in-depth analysis of the costs of capping carbon emissions from electric generators at the two different levels – CCAP and Cap 2000 – under a number of assumptions and scenarios designed to identify the likely range of costs, while acknowledging that these costs cannot be predicted precisely.

Full Report