Government Energy Policy, Business and Technology

The Unlikely Comeback of Cap and Trade

Governing: Fifteen years ago, New York Gov. George Pataki sent letters to nine fellow governors in the Northeast and Mid-Atlantic, inviting them to join a bipartisan alliance aimed at fighting global climate change. Pataki was promoting a cap-and-trade system, a regulated market that would limit the amount of carbon dioxide power plants could emit and provide financial incentives for cutting emissions over time.

Cap and trade has had its ups and downs since then, and it’s all but dead right now at the federal level. But it has more life than ever in the states. Nine of the 10 states that signed up with the Regional Greenhouse Gas Initiative (RGGI) -- the eventual result of Pataki’s pitch -- in 2007 continue to follow it today. Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont are all active participants. Carbon dioxide emissions from power plants in these member states fell 51 percent between 2005 and 2016. At the same time, the states generated more than $2.6 billion in revenue from quarterly auctions of so-called allowances that power plants must buy to offset their emissions.

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