Date of Award

Spring 6-9-2024

Document Type

Thesis (Undergraduate)


Environmental Studies

First Advisor

Richard Howarth

Second Advisor

Erin Mansur


The Regional Greenhouse Gas Initiative (RGGI) is one of the longest-standing emissions trading schemes for carbon dioxide in the United States. “Cap-and-trade” describes an emissions trading scheme where emissions are capped at a specific level, allowances are allocated beneath that cap, and emitters can trade allowances. In RGGI, the cap lowers over time, and the allowances are distributed via a quarterly auction. While RGGI includes 10 member states across the Northeast United States, there is risk of carbon leakage whereby the carbon price signal in RGGI states reduces carbon emissions in those states, but there is increased generation in neighboring states. Through a difference- in-difference analysis, this study provides evidence of leakage in the RGGI region. This study finds electricity generation from coal plants decreases in RGGI states, while natural gas generation in “leakage” states increases. There is an overall emissions reduction, but some of the carbon emissions reductions from RGGI are negated by increased emissions in neighboring states. Further, literature review and semi-structured interviews with RGGI experts outlined key considerations in the cap-and- trade design process, such as pricing allowances rather than free allocation, opportunities and challenges for multi-state collaboration, and broader trends in the switch from coal-to-gas generation. These results provide insight into electricity generation patterns between 2004-2022 and suggest that cap-and-trade, while effective, remains susceptible to carbon leakage over this time period.

Available for download on Saturday, June 07, 2025