Evidence of increased electricity influx following the regional greenhouse gas initiative

Abstract

This paper presents evidence that electricity influx to the U.S. Northeast increased after the introduction of the Regional Greenhouse Gas Initiative (RGGI), a carbon emissions abatement program. Electricity markets allow emissions reductions achieved in the region to be offset by increased emissions in other electricity-producing regions, as local generation is replaced with electricity imports. The empirical analysis is conducted using the synthetic control method. Results indicate that imports increased after RGGI's establishment in 2009—in which the increase predominantly occurred after the emission cap was reduced in 2014—which suggests that electricity production and carbon emissions increased outside RGGI.