RGGI Is Not Functioning As Intended: Our Internal Analysis Shows the Program Has Been Increasing Net CO₂ Emissions and Could Cost Consumers ~$9-10 Billion Over the Next Year at Current $40+ Pricing
PR Newswire
SALT LAKE CITY, April 30, 2026
+2.86 Million Tons of Estimated Net Additional CO₂ Over the Trailing 12 Months — Equivalent to ~565,000 Extra Cars on the Road – Modeling shows this gets worse with Virginia Participation and with higher RGGI prices.
SALT LAKE CITY, April 30, 2026 /PRNewswire/ -- Alpha Inception today released independent empirical analysis estimating that, over April 2025 – March 2026, the RGGI carbon adder caused a net increase in PJM-wide atmospheric CO₂ emissions, while current pricing of $40+ will likely expose consumers and businesses to ~$9–10 billion/year in additional wholesale electricity costs. https://rggi-leakage.alphainception.com/dashboard
Our dispatch model estimates RGGI's carbon adder displaced efficient RGGI-state gas generation; with replacement plants in PA, OH, KY, and WV emitting 30–45% more CO₂/MWh. Net result: +2.86 million tons more atmospheric CO₂ versus a no-RGGI world and this gets materially worse in the next year with Virginia rejoining and current RGGI market prices.
At ~$40/ton, RGGI generates ~$3 billion/year in auction proceeds while imposing ~$9–10 billion/year in wholesale costs on consumers and businesses, with ~$2 billion borne by non-RGGI PJM states (PA, OH, IL) with zero auction revenues or consumer rebates.
The Feb–Apr 2026 60%+ rally (from $24.99 at Auction 71 to $40.30 on Apr 27 and over $42 on Apr 28) appears to be driven by a structural term-mismatch — generators hedging multi-year data-center compliance in a quarterly single-vintage market — not fundamentals. Alpha Inception suggests RGGI states consider pausing Virginia's July 1, 2026 entry until January 2027 and adopting price-containment measures (illustrative reference ~$20/ton price cap) and restoring forward-vintage auctions — RGGI's original 2008 design. These changes are needed to address the structural premium and reduce market distortions that led to additional emissions in the last 12 months.
Full methodology, per-plant dispatch data, layered cost framework, source-level rent attribution, state-by-state cost allocation, and the proposed forward-vintage auction restoration design are available at https://rggi-leakage.alphainception.com/dashboard.
FURTHER INFORMATION
Detailed empirical research underlying the dashboard — full dispatch model, datasets, consumer cost impact model, and fair-value model — is available to Alpha Inception advisory clients. Alpha Inception is always open to new advisory engagements in energy and emissions markets.
For inquiries, contact Andre Templeman, Principal: 413090@email4pr.com/ 801-455-3033
DISCLOSURE OF INTEREST & DISCLAIMER
Alpha Inception is an independent research and consulting firm. Certain of its advisory clients may have established positions in RGGI allowances or related derivatives that may benefit economically from a decline in RGGI prices. Alpha Inception, its principals, affiliates, and clients may hold long or short positions in such instruments and may benefit economically if RGGI prices decline following publication.
Published for informational and policy-analysis purposes only. Not investment, legal, regulatory, accounting, tax, or other professional advice, nor an offer or solicitation. Numerical estimates are model outputs based on public data; actual results may differ materially. Past results do not guarantee future outcomes. Alpha Inception does not allege that any market participant has engaged in unlawful manipulation, fraud, or misconduct. Recipients should conduct independent verification.
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