Emission markets are a tool used on a state, regional, national, or global basis to limit emissions of various pollutants and greenhouse gases, typically in an approach referred to as "cap-and-trade". Several programs are in place or being developed that apply to electric generation sources in New England. In some of these programs, a wind generator can apply for and receive a form of tradable emission rights (usually in the form of set-aside allowances) in recognition of emissions a wind generator displaces on the system. In these cases, tradable emission rights have a market value and can be sold to bring a supplemental revenue stream to a wind generator. In other programs (such as the federal sulfur dioxide (SO2) program) in which participation is limited to emitters, wind generators cannot directly participate in programs, but the program drives up the cost of all emitting generation technologies, making wind power more competitive. The Northeast States for Coordinated Air Use Management has information about clean-air activities and initiatives in New England. The Environmental Protection Agency provides information about state and regional cap-and-trade programs for various pollutants.
Regional Greenhouse Gas Initiative
One notable regional program is the Regional Greenhouse Gas Initiative, or RGGI, which now includes all of the New England states. RGGI is a cooperative effort to reduce emissions of carbon dioxide (CO2), the major contributor to global climate change. RGGI now includes ten northeast states including all six New England States, as well as New York, New Jersey, Delaware, and Maryland. These states have set a cap on carbon dioxide emissions from the electricity sector, along with a tradable allowance mechanism encouraging efficient (least-cost) compliance — a so-called "cap-and-trade" regime. For more information, and an explanation of the implications of RGGI for wind power, please read "The Regional Greenhouse Gas Initiative Moves Forward; What Does it Mean for Wind Power?"