The Regional Greenhouse Gas Initiative cleared $37.65 per carbon allowance at its most recent quarterly auction, more than 12 times the $3.07 clearing price recorded at the program's 2008 debut. The price tag, paired with a post-2020 emissions reversal, has reopened a debate over whether the 17-year-old cap-and-trade compact still earns its keep.

What is RGGI, and who still participates?

RGGI launched in 2008 with 10 signatory states: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. New Jersey withdrew in 2012 and rejoined in 2020. Virginia joined the auctions in 2021, paused from 2023 to 2024, then restarted this year, bringing current membership to 11 states.

Large power generators in member states must buy one allowance per ton of CO2 emitted, with the regional cap ratcheting down each year. Quarterly auctions set the floor price, though generators trade allowances on a secondary market where actual transaction costs often exceed the auction clear.

Member states have directed more than $10 billion in cumulative auction proceeds into energy efficiency, bill assistance, climate adaptation, and clean-energy programs.

What did RGGI actually deliver?

Power-sector CO2 emissions in the nine continuously participating states fell from 117.5 million short tons in 2010 to 61.9 million short tons in 2020 — a roughly 47% drop. Coal-fired generation accounted for 15% of output across seven New England states and New York in 2007. Today no coal plants operate in any of them.

"I don't think you can realistically attribute it all to one mechanism," said Paolo Moncada Tamayo, senior policy and data analyst at the Acadia Center and a RGGI supporter. State climate rules and the economics of coal-to-gas switching drove much of the decline, with the carbon price playing a supporting role.

After 2020, however, the trend reversed. Emissions stopped falling and began trending back up slightly as the easy coal retirements ended.

"The earlier RGGI era was easier and cheaper," Tamayo said. "We're at a point where it's not as easy and not as affordable to decarbonize."

Is the price still doing its job?

RGGI includes a mechanism that releases additional allowances when prices rise too quickly, a cost-control lever critics argue blunts the carbon signal. Noah Kaufman, a senior research scholar at Columbia University's Center on Global Energy Policy, said the participating states have shown little appetite to remove the ceiling.

"If they're serious about those goals, they would need some pretty big policy shifts going forward," Kaufman said. "If it were me and I didn't have constraints or stakeholders, I probably would get rid of RGGI and think along the lines of some combination of clean electricity and clean heating standards."

Dan Dolan, president of the New England Power Generators Association, framed the moment as an audit point. "I think it's appropriate to look at RGGI and see to what degree it is amplifying its intended purpose, or if it needs to be pulled back," Dolan said.

What's the leakage problem?

Critics argue the carbon price pushes generation out of RGGI states into the PJM Interconnection grid, where plants in nine non-RGGI states do not carry the same cost. Generators in Delaware, Maryland, New Jersey, and Virginia face what their trade groups describe as a structural disadvantage against dirtier coal and gas plants in Ohio and West Virginia.

"They can't compete economically with dirtier coal or even gas plants from Ohio, from West Virginia," said Ray Cantor, deputy chief government affairs officer for the New Jersey Business and Industry Association.

Cantor's organization has launched a campaign to convince New Jersey leaders to leave RGGI again and replace it with a flat $7 per-ton carbon fee. Cantor-commissioned analysis projects the alternative would generate about $135 million annually for New Jersey, though Cantor acknowledged the levy would do little on its own to curb pollution.

What happens next?

The next RGGI auction and the 2026 program review will set the trajectory. Member states must decide whether to tighten the cap, restructure the cost-control mechanism, or hold the line as offshore wind development stalls under federal pressure and transmission bottlenecks slow new renewables.

Investments funded by 2024 auction proceeds are forecast to avoid 4.3 billion short tons of CO2 over their lifetime, per the Acadia Center. New England–directed 2025 investments should deliver $1.3 billion in lifetime consumer savings, the group projects.

"We can't lose sight of that just because of a moment of high prices," Tamayo said.

The 11 participating states face a 2026 decision point on whether RGGI's allowance price remains an effective lever — or whether the cap has become a ceiling on ambition.