The Regional Greenhouse Gas Initiative (RGGI) initiated the first regional greenhouse gas emissions trading system in the United States. This cap-and-trade program will begin on 1 January 2009 and will include sources from the electricity generating sector. The article by Camilla Bausch and Sandra Cavalieri analyses the implementation design of the RGGI trading scheme and its significance for the evolution of the international carbon market.

To date, 10 northeastern states have committed themselves to participating, and each state is currently developing laws and regulations to implement RGGI. The allocation of allowances, which is a controversially debated issue under the European Emission Trading Scheme, is once more proving to be one of the major challenges when introducing an emissions trading scheme. Six RGGI states have stated their intention to auction 100% of the allowances,and Massachusetts is the first state to develop draft regulations specific to an auction.

As RGGI continues to evolve, the international community should pay close attention to the decisions that these northeastern states make individually or jointly, as they may not only influence the regional,but also a possible future federal trading system. Furthermore,as the international regime continues to evolve, mandatory cap-and-trade programs in the U.S. – either regionally or nationally – could potentially be an important part of a future international carbon market.

The article can be ordered at the legal publisher Lexxion.

Links to related publications and projects:

• Ecologic Lecture: German Experience with CO2 Data Gathering
• Ecologic project: Implementation of the emissions trading 
  Ecologic publication: Windfall Profits und Wettbewerb in der 2. Handelsperiode
• Ecologic project: Legal implementation of the European directive on emissions trading
• Ecologic project: Effects of emissions trading on electricity prices

Keywords: Emissions trading, climate change, Transatlantic, U.S., State, subnational, initiatives, America, policy

Citation: Bausch, Camilla and Sandra Cavalieri 2007: “Allocation of Greenhouse Gas Allowances in the United States - A Northeastern Example”. Carbon & Climate Law Review, Vol. 2007, No. 2, 129-138.
Authors: Camilla Bausch, Sandra Cavalieri
Year: 2007
Published in: Carbon & Climate Law Review 
Volume: 2007
Issue: 2
Pages: 129-138
Language: English
Publisher: The legal publisher Lexxion
Place (of publisher): Berlin, Germany
ISSN: 1864-9904
Reference type: Journal Article
Price: € 16,05

Table of contents:
I.Introduction
The Establishment of RGGI
II.Massachusetts as a Participant in the RGGI CO2 Budget Trading Program
Development of RGGI Regulations in Massachusetts
III.Allocating Emission Allowances
Auctioning – Choosing the Right Mechanism
2. Auctioning in Massachusetts
a. What to Do with all the Money? – Auction
Proceeds in Massachusetts
IV.Conclusion