Constitutional Implications of Regional CO2 Cap-and-Trade Programs: The Northeast Regional Greenhouse Gas Initiative as a Case in Point

Abstract

This article assesses the constitutionality of the northeastern Regional Greenhouse Gas Initiative (RGGI), a multi-state CO2 cap-and-trade program on electricity generators, that went into effect in 2009. The article considers possible federal preemption, dormant commerce clause, and compact clause arguments, but concludes that as presently constructed the RGGI passes constitutional hurdles. The article notes that how to deal with “leakage,” the possibility that electricity generation from other states not subject to any cap-and-trade restrictions will enter the RGGI market, negating CO2 reductions from within-RGGI generators, poses the greatest problem.

Keywords: Constitutional Law, Environmental Law, Climate Change, Dormant Commerce Clause, Compact Clause, Preemption, Federalism