The Regional Greenhouse Gas Initiative (RGGI) has emerged as a central issue in Virginia’s 2025 gubernatorial race, with discussions centering on the economic implications of rejoining the cap-and-trade carbon program.
RGGI is the United States’ first mandatory market-based program aimed at reducing greenhouse gas emissions from the power sector. It includes 11 states—Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia (prior to its withdrawal)—working collaboratively to cap and reduce CO₂ emissions. The program employs a multi-state cap-and-trade model that reinvests auction proceeds into energy efficiency, renewable energy, and direct bill assistance.
According to research from the Caesar Rodney Institute, Virginia’s emissions from in-state power generation decreased by 6.6 million metric tons between 2020 and 2022. However, this reduction was offset by an increase of 10.3 million metric tons in emissions from electricity imports, resulting in a net regional increase of 3.7 million metric tons. David Stevenson’s analysis also indicated that $523 million in RGGI-related costs were added to utility bills while in-state electricity generators lost $840 million in revenue during the same period.
RGGI’s carbon allowance prices averaged $13.46 per ton in 2022 and concluded the year at $13 per ton based on official auction data. These costs are incurred by power producers and typically passed on to consumers, thereby raising electricity rates in participating states. RGGI’s projections suggest that allowance prices could rise to as much as $24 per ton by 2030, potentially increasing the program’s cost impact on households and businesses.
The Regional Greenhouse Gas Initiative is a cooperative market-based carbon trading system established in 2009 and administered by participating U.S. states in the Northeast and Mid-Atlantic regions. Each state implements RGGI through its own regulatory authority but coordinates through a central auction and oversight system. According to RGGI’s official overview, proceeds from allowance auctions fund state programs that promote energy efficiency, renewable energy deployment, and ratepayer support.
