Connecticut Strengthens Rules for Regional Greenhouse Gas Initiative Towards Zero-Carbon Grid by 2040

The General Assembly’s Legislative Regulation Review Committee has unanimously approved updates to carbon dioxide emissions regulations under the Regional Greenhouse Gas Initiative (RGGI) that strengthen the state’s commitment to a zero-carbon grid by 2040, according to a September 25 press release.

The regulations, proposed by the Connecticut Department of Energy and Environmental Protection (DEEP) in coordination with other states who are part of the RGGI, bring the state in line with the carbon market’s December 2017 Model Rule. The update sets the stage for the RGGI between 2020 and 2030 and, most importantly, reduces the emissions cap to a more ambitious 30 percent below 2020 levels. The new rule also creates an emissions containment reserve, an adjustment mechanism that allows states to withhold allowances from the auction if prices drop below a specified threshold, ranging from $6 to $11.02 between 2021 and 2030. Similarly, the price threshold above which allowances in the cost containment reserve are released into the market will grow from $13 to $23.89 over the same period.

Delaware, Maryland, Massachusetts, Rhode Island, and Vermont have all updated their regulations to reflect the program changes. New York, Maine, and New Hampshire are still in the process to follow suit.

RGGI’s market-based approach sets an annually declining limit on carbon emissions and allows polluters to buy or sell permits. Participating states establish a regional carbon emissions budget and allowance trading program for emissions from fossil fuel-fired electricity generating units.