Is it time to rethink the Northeast's cap-and-trade system?

A program that helped fund some home energy-efficiency and bill-assistance efforts in the Northeast is facing new scrutiny. The Regional Greenhouse Gas Initiative, or RGGI, charges power plants for every ton of carbon dioxide they emit, and states use that money for clean energy, efficiency programs, and help with utility bills. Eleven states take part, including Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, Delaware, and Virginia. Since it started in 2008, the price power plants pay per ton has jumped from about $3 to nearly $38, and power-sector emissions in the region fell by half — though mostly because coal plants shut down, not because of the carbon price alone.

Now emissions have started ticking back up, and some critics argue the program is outdated or even backfiring, since power plants in RGGI states may lose business to dirtier, cheaper plants in nearby states that don't pay a carbon price. New Jersey's business lobby wants the state to leave the program again. Supporters counter that the money raised keeps paying off: investments funded by 2024 revenue alone are projected to avoid billions of tons of emissions, and 2025 revenue in New England is expected to produce $1.3 billion in lifetime savings for residents, largely through efficiency upgrades.

For homeowners in participating states, this debate matters because RGGI money has helped pay for energy-efficiency and electrification programs, and possibly bill assistance. Whether that funding stream continues, shrinks, or changes shape may depend on how this argument plays out in individual state legislatures.