Greenhouse Gas Emissions Reduction Targets and Market-based Policies

Maine was the first state to enact legislation setting specific GHG reduction targets in 2003, followed by California in 2006. Since then, several other states have enacted statutory targets, with Colorado and New York being two of the most recent. Of the 15 states that have enacted GHG reduction targets, seven did so from 2007 through 2009. 

Generally, states have set targets as a future percentage reduction compared to a specific year’s emissions levels or baseline, but the overall stringency of state programs can vary depending on the percentage reduction required and baseline used to measure such reductions. 

State percentage reduction requirements range from 10% by 2020 up to 90% by midcentury. Several states—California, Connecticut, Maine, Massachusetts, New York, Oregon, Rhode Island, Vermont and Washington—use a 1990 baseline to measure emissions reductions, while the emissions baseline for Colorado, Minnesota and Nevada is 2005 and Maryland and New Jersey is 2006. 

Connecticut and Washington also implement a shifting baseline depending on the target year. For example, Connecticut uses a 1990 emissions baseline for its 2020 targets, but a 2001 emissions baseline for its 2030 and 2050 targets. Washington generally relies on a 1990 baseline to measure emissions, but its 2050 goals are flexible in that they can be based either on a percentage reduction from 1990 emissions levels or the state’s expected emissions or business as usual in 2050 without reduction targets in place. 

Additionally, a number of states are statutorily required to conduct a GHG emissions inventory or reporting process to measure emissions from major sources on an annual, biennial or triennial basis. Some states, including Delaware, New Hampshire and New Mexico, administer an inventory program without an explicit statutory directive. Some states, such as Iowa and Pennsylvania, are statutorily required to compile an emissions inventory but do not have a statutory mandate to reduce statewide emissions. Conversely, several states with statutory GHG reduction requirements also have a statutory mandate to compile an emissions inventory. 

California (Reduction Targets and Mandatory Reporting)

• Established: 2006.
• Statutory Targets: 40% by 2030 (1990 baseline).
• Description: California initially enacted statutory GHG emissions reduction targets in the Global Warming Solutions Act of 2006, which required that the state Air Resources Board (CARB) establish targets for reducing GHG emissions to 1990 levels by 2020. This 2006 legislation also directed CARB to adopt regulations governing the state’s GHG emissions reporting process no later than Jan. 1, 2008. CARB was directed to develop a program requiring the reporting and verification of GHG emissions in the state and develop mechanisms for enforcement and compliance. Cal. Health & Safety Code § 38530. Information about CARB’s mandatory greenhouse gas reporting regulation can be found here. In 2016, California extended its GHG emissions reduction targets by enacting SB 32, which required that CARB ensure GHG emissions are reduced to 40% below 1990 levels by 2030. 

Colorado (Reduction Targets and Mandatory Reporting)

• Established: 2019.
• Statutory Targets: 26% by 2025; 50% by 2030; 90% by 2050 (2005 baseline).
• Description: In 2019, Colorado enacted comprehensive climate legislation directing the state Air Quality Control Commission (AQCC) to promulgate implementing regulations aimed at achieving statewide emissions reductions below 2005 levels of at least 26% by 2025, 50% by 2030 and 90% by 2050. Of note, House Bill 1261 requires the AQCC to identify, solicit stakeholder input from, and consider impacts on communities disproportionately impacted by climate change. Colo. Rev. Stat. § 25-7-102. Colorado also enacted a separate piece of legislation (Senate Bill 96) in 2019, which established specific statutory requirements for statewide GHG reporting. Under this provision, the AQCC is required to adopt rules with monitoring and public reporting requirements for GHG emitters. Such reporting requirements are designed to support the state’s GHG inventory efforts. The state Air Pollution Control Division is now also required to update Colorado’s GHG inventory at least every two years and include emissions forecasts tracking progress made toward achieving the state’s GHG reduction targets. Colo. Rev. Stat. § 25-7-140.

Connecticut (Reduction Targets and Mandatory Reporting)

• Established: 2008.
• Statutory Targets: 10% by 2020 (1990 baseline); 45% by 2030 (2001 baseline); 80% by 2050 (2001 baseline).
• Description: Connecticut bolstered its statewide GHG reduction goals initially established in 2004 by enacting a comprehensive 2008 Global Warming Solutions Act (HB 5600), establishing binding GHG reduction requirements and mandating a statewide emissions inventory. Under this provision, the state is required to reduce GHG emissions by 10% below 1990 levels by 2020, 45% below 2001 levels by 2030, and 80% below 2001 levels by 2050. See Conn. Gen. Stat. § 22a-200a. Additionally, the commissioner of Energy and Environmental Protection was required to publish a GHG inventory no later than July 1, 2010, and develop a schedule of regulatory actions no later than July 1, 2012, and every three years thereafter showing progress toward the state’s GHG reduction targets. Conn. Gen. Stat. § 22a-200b.The state’s GHG emissions inventory reporting can be found here. 

Hawaii (Reduction Targets and Mandatory Reporting)

• Established: 2007; 2018.
• Statutory Targets: Carbon neutrality by 2045.
• Description: Hawaii enacted House Bill 2182 (2018), requiring that the state achieve a zero-emissions economy no later than 2045. In particular, state law requires that Hawaii “sequester more atmospheric carbon and greenhouse gases than emitted within the State as quickly as practicable, but no later than 2045.” Hawaii Rev. Stat. §225P-5. More than 10 years earlier, Hawaii enacted a law mandating that the director of health adopt rules “requiring the reporting and verification of statewide greenhouse gas emissions.” Hawaii Rev. Stat. § 342B-72. Additional information about Hawaii’s GHG emissions inventory regulations and reporting can be found here.

Iowa (Mandatory Reporting Only)

• Established: 2007. 
• Statutory Targets: None.
• Description: State law requires the Department of Natural Resources to submit an annual GHG emissions report starting in 2011 and in every year thereafter. Iowa also administers a voluntary GHG reporting registry to track companies that reduce their GHG emissions or increase efficiency. Iowa Code § 455B.104; Iowa Code § 455B.152. Additional information about Iowa’s GHG emissions inventory and reporting process can be found here.

Maine (Reduction Targets and Mandatory Reporting)

• Established: 2003; 2019.
• Statutory Targets: 45% by 2030; 80% by 2050 (1990 levels).
• Description: Maine became the first state to enact binding statutory GHG emissions reduction requirements in 2003, mandating a return to 1990 emissions levels by 2010 with additional reductions in future years. Under this law, Maine was required to reduce statewide GHG emissions to 10% below 1990 levels by 2020. Of note, Maine’s long-term targets required reductions “sufficient to eliminate any dangerous threat to the climate,” including a potential 75-80% reduction below 2003 levels. This same legislation also mandated that the Department of Environmental Protection create an annual statewide GHG emissions inventory. Me. Stat. Ann. tit. 38 § 575. Information about Maine’s GHG emissions inventory program can be found here. In 2019, Maine enacted legislation repealing and replacing its existing GHG reduction targets with enforceable long-term reduction targets of 45% below 1990 emissions levels by 2030 and 80% below 1990 emissions levels by 2050. Me. Rev. Stat. Ann. tit. 38  §  576-A.

Maryland (Reduction Targets and Mandatory Reporting)

• Established: 2009; 2016.
• Statutory Targets: 25% by 2020; 40% by 2030 (2006 baseline).
• Description: In 2016, Maryland reauthorized and extended its statewide GHG targets to require a 40% reduction below 2006 levels by 2030. Previously, Maryland had enacted the Greenhouse Gas Reduction Act of 2009, setting reduction targets of 25% below 2006 levels by 2020 and establishing a long-term goal of reducing statewide emissions by up to 90% below 2006 levels by 2050. The 2016 reauthorization reaffirmed these existing targets, set a new target for 2030 and also required the state Department of Environment to submit a final plan to achieve the 2030 emissions reduction goals no later than Dec. 31, 2019. Md. Ann. Code art. Environment, § 2-1201; Md. Ann. Code art. Environment, § 2-1204; Md. Ann. Code art. Environment, § 2-1204.1.The initial 2009 legislation also required that the Maryland Department of Environment publish a statewide GHG emissions inventory every three years starting in 2011. Md. Environment Code Ann. § 2–1203.

Massachusetts (Reduction Targets and Mandatory Reporting)

• Established: 2008.
• Statutory Targets: 10-25% by 2020; 80% by 2050 (1990 baseline).
• Description: Massachusetts enacted its comprehensive Global Warming Solutions Act in 2008, requiring the Department of Environmental Protection to establish targets for GHG emissions reductions below 1990 levels of between 10-25% by 2020 and 80% by 2050. The department is also required to implement interim reduction targets for 2030 and 2040 aimed at achieving the required 80% emissions reductions by 2050. The 2008 Act further required the Department of Environmental Protection to adopt regulations mandating reporting and verification of GHG emissions in the state. Such regulations must establish a regional reporting registry, require annual reporting for Title V permit facilities, and require annual reporting for stationary source facilities emitting more than 5,000 tons of carbon dioxide equivalent per year. In addition, the regulations must facilitate voluntary GHG emissions reporting, as well as require reporting from electric generation sources including all retail sellers of electricity, such as electric utilities and municipal electric departments. The Department of Environmental Protection was also required to implement compliance monitoring and enforcement to ensure a rigorous accounting of emissions and that regulated entities maintain records of reported emissions. Mass. Gen. Laws Ann. ch. 21N et seq.

Minnesota (Reduction Targets and Mandatory Reporting)

• Established: 2007; 2009.
• Statutory Targets: 30% by 2025; 80% by 2050 (2005 baseline).
• Description: In 2007, Minnesota enacted the Next Generation Energy Act, comprehensive climate legislation requiring state emissions reductions below 2005 levels of at least 15% by 2015, 30% by 2025, and 80% by 2050. The act also required the commissioner of commerce to submit a climate action plan meeting certain requirements to the Minnesota Legislature no later than Feb. 1, 2008. Minn. Stat. § 216H.01 et seq. In 2009, the state enacted legislation requiring the commissioner of the state Pollution Control Agency to establish a GHG inventory. The inventory must include emissions from facilities required to obtain a Title V permit under federal Clean Air Act requirements and facilities emitting more than a certain threshold amount between 10,000 and 25,000 tons of carbon dioxide equivalent per year. Minn. Stat. § 216H.021. The state currently requires facilities with certain emissions permits to report GHG emissions. Additional information about the state’s GHG emissions reporting requirements can be found here.

Nevada (Reduction Targets and Mandatory Reporting)

• Established: 2007; 2019.
• Statutory Targets: 28% by 2025; 45% by 2030 (2005 levels); near-zero by 2050. 
• Description: In 2019, Nevada enacted legislation establishing statutory reduction targets for the first time and updating its GHG emissions inventory mandate, initially established in 2007, to include specific reporting requirements. The new law establishes GHG reduction targets below 2005 emissions levels of 28% by 2025 and 45% by 2030. The law further establishes a long-term target of zero or near-zero GHG emissions by 2050. Additionally, the state Department of Conservation and Natural Resources must issue a statewide inventory no later than Dec. 31, 2019, and annually thereafter that provides a 20-year forecast of GHG emissions in the state. The annual inventory report must include GHG emissions projections for certain sectors, including electricity production and transportation. The state must also project emissions for certain sectors in its GHG inventory, reporting every four years, including from industry, commercial and residential, agriculture, and land use and forestry. The reporting must also include a statement of policies aimed at reducing emissions from the identified sectors and, in certain years, a quantification of emissions reductions necessary to meet 2025 and 2030 GHG reduction targets. Nev. Rev. Stat. § 445B.380; Senate Bill 254 (2019). 

New Jersey (Reduction Targets and Mandatory Reporting)

• Established: 2007.
• Statutory Targets: 1990 emissions by 2020; 80% by 2050 (2006 baseline).
• Description: In 2007, New Jersey enacted the Global Warming Response Act of 2007, comprehensive climate legislation requiring state emissions reductions to 1990 levels by 2020 and to 80% below 2006 levels by 2050. The state was also required to conduct an inventory of current, 2006 and 1990 statewide GHG emissions no later than 2008. The 2007 Act further requires that the state issue an annual report measuring statewide emissions and monitoring progress toward 2020 and 2050 emissions targets. The following entities are required to report their GHG emissions: Fossil fuel manufacturers and distributers including, but not limited to, oil refineries and storage facilities, natural gas pipelines, fuel wholesalers and retail distributors; electricity generators located in-state; electricity generators that deliver for sale and end-use in-state; gas utilities; and other major emitters, as determined by the department. N.J. Rev. Stat. § 26:2C-37 et seq. 

New York (Reduction Targets and Mandatory Reporting)

• Established: 2019.
• Statutory Targets: 40% by 2030; 85% by 2050 (1990 baseline); net-zero GHG emissions by 2050.
• Description: In 2019, New York enacted the Climate Leadership and Community Protection Act, comprehensive climate legislation committing the state to net-zero greenhouse gas emissions by 2050. It also caps GHG emissions at 60% of 1990 levels (40% reduction) and at 15% (85% reduction) by 2050. The remaining 15% under the state’s net-zero goal will be achieved through greenhouse gas emissions offset projects. The 2019 Act further requires the Department of Environmental Conservation to issue a report on state GHG emissions requirements no later than two years after the Act’s effective date and every year thereafter. Senate Bill 6599 (2019). 

Oregon (Reduction Targets and Mandatory Reporting)

• Established: 2007.
• Statutory Targets: 10% by 2020; 75% by 2050 (1990 baseline).
• Description: In 2007, Oregon enacted HB 3543 requiring the state to reduce GHG emissions starting in 2010 and establishing future targets for reductions below 1990 levels of 10% by 2020 and 75% by 2050. It also established the Oregon Global Warming Commission to coordinate state and local efforts to achieve the 2020 and 2050 reduction targets. The Commission is required to submit a biennial report describing the state’s progress toward meeting its GHG reduction mandates, including trends in state GHG emissions. Or. Rev. Stat. § 468A.260. The state Environmental Quality Commission adopted GHG reporting rules in 2008. The state’s GHG regulatory reporting requirements can be found here. Or. Rev. Stat. § 468A.200 et seq.

Pennsylvania (Mandatory Reporting Only)

• Established: 2008.
• Statutory Targets: None.
• Description: Pennsylvania's Department of Environmental Protection is statutorily required to compile an annual GHG emissions inventory establishing emissions trends and major sector contributions, including GHG emissions from “transportation, electricity generation, industrial, commercial, mineral and natural resources, production of alternative fuel, agriculture and domestic sectors.” Pa. Stat. Ann.  tit. 71, § 1361.4. Additional information about the state’s climate programs and the 2018 GHG inventory can be found here.   

Rhode Island (Reduction Targets Only)

• Established: 2014.
• Statutory Targets: 10% by 2020; 45% by 2035; 80% by 2050 (1990 baseline).
• Description: Rhode Island enacted the Resilient Rhode Island Act of 2014, establishing targets for GHG reductions below 1990 levels of 10% by 2020, 45% by 2035, and 80% by 2050. It also created the Climate Change Coordinating Council to oversee, assess, integrate and coordinate efforts to address climate change. R.I. Gen. Laws § 42-6.2-2.

Vermont (Reduction Targets and Mandatory Reporting)

• Established: 2005; 2008.
• Statutory Targets: 50% by 2028; 75% by 2050 (1990 baseline) (goals).
• Description: In 2005, Vermont enacted the goal of reducing greenhouse gas emissions below 1990 levels by 25% by 2012, 50% by 2028, and if practicable by 75% by 2050. Additionally, starting in 2010, Vermont's secretary of natural resources is statutorily required to publish an annual GHG inventory until 2028, or until the state engages in alternative regional or federally-mandated GHG emissions reporting. Vt. Stat. Ann. tit. 10, § 578; Vt. Stat. Ann. tit. 10, § 582.

Washington (Reduction Targets and Mandatory Reporting)

• Established: 2008.
• Statutory Targets: 1990 levels by 2020; 25% by 2035 (1990 baseline); 50% by 2050 (1990 baseline) or 70% below expected emissions by 2050.
• Description: Washington enacted HB 2815 in 2008, requiring the state to reduce emissions to 1990 levels by 2020 with additional future reduction targets for 2035 of 25% below 1990 levels, and 2050 of 50% below 1990 levels or 70% below the state’s expected emissions. The law further requires that the Department of Ecology complete a GHG inventory every two years starting in 2010. Wash. Rev. Code § 70.235.020. Additionally, in 2010 the state enacted legislation with specific GHG reporting requirements, including that the Department of Ecology adopt rules making reporting of GHG emissions mandatory for single facilities that emit more than 10,000 metric tons of carbon dioxide equivalent per year.  Wash. Rev. Code § 70.94.151.

Puerto Rico (Reduction Targets and Mandatory Reporting)

• Established: 2019.
• Statutory Targets: 50% in five years (2025) with a 100% renewable energy target by 2041.
• Description: In 2019, Puerto Rico enacted comprehensive climate and clean energy legislation aimed at reducing the state’s dependence on fossil fuels. In particular, the bill requires a 50% reduction in statewide GHG emissions over the next five years and sets ambitious renewable energy targets of 100% by 2041. The law further requires Puerto Rico's Department of Natural and Environmental Resources or other jurisdictional entity to annually compile and publish a GHG emissions inventory. Six GHGs must be measured as part of the inventory. Puerto Rico Senate Bill 773 (2019). 

Several states have also implemented market-based policies aimed at limiting GHG emissions from major sectors. Such policies are implemented at the state level and through regional agreements. For the purposes of this section, we highlight those carbon pricing policies implemented through regulation.

Two primary carbon pricing regional agreements focus on limiting GHG emissions from major sectors. The first, the Regional Greenhouse Gas Initiative (RGGI), is focused on reducing GHG emissions from the power sector. The second, the Transportation Climate Initiative (TCI), is aimed at reducing emissions from the transportation sector.

At least one state, Massachusetts, is a participant in RGGI and TCI and also implements a state program, parallel to RGGI, limiting GHG emissions from certain power plants that rely on fossil fuels. California is the only state currently implementing an in-state multi-sector cap-and-trade program.

In-State Policies 

California

In implementing the Global Warming Solutions Act of 2006 (AB 32), the California Air Resources Board (CARB) adopted by regulation a multi-sector cap-and-trade program rule in 2011. The initial rule established an annual emissions allowance budget from 2013 to 2020 and phased-in requirements for regulated entities during three compliance periods. Electricity generators and industrial facilities emitting 25,000 metric tons of carbon dioxide equivalent (CO2e) or more were required to comply with the cap during the first compliance period starting in 2013. The cap took effect for natural gas and fuel suppliers meeting or exceeding the 25,000 CO2e metric ton threshold during the second compliance period starting in 2015. The program was designed to regulate the sources responsible for 85% of the state’s GHG emissions.

California’s cap-and-trade regulation has been updated several times over the course of the program. Of note, in 2012 CARB adopted regulations authorizing “linkage” with other GHG emissions trading programs, which provided for the use of allowances and offsets earned in external cap-and-trade programs for compliance with California’s program. California’s program linked with Québec’s cap-and-trade program in 2014. In 2017, California enacted AB 398, which extended the program’s cap to 2031.

California’s current regulations provide for an annual emissions allowance budget (in millions) of 346.3 in 2019, decreasing annually down to 193.8 in 2031.

Massachusetts

In addition to participating in the RGGI program described below, Massachusetts also implements a separate cap-and-trade program limiting GHG emissions from 21 fossil fuel-fired power plants in the state. The emissions limit decreases annually to approximately 8.51 million metric tons in 2020, down to approximately 1.79 million metric tons in 2050. The program is designed to operate in parallel to the RGGI requirements. 310 Code Mass. Regs. 7.74.

Washington

Washington’s Clean Air Rule establishes a market-based program limiting emissions from major in-state stationary sources and petroleum and natural gas distributors. The rule, as adopted in 2016, was suspended pending a decision by the Washington state Supreme Court. On January 16th, 2020, the court struck down portions of the rule as they relate to petroleum and natural gas distributors, but upheld the portion of the rule that applies to stationary sources and remanded the case to a lower court to assess how best to separate out the invalidated parts of the rule.

Regional Agreements 

Regional Greenhouse Gas Initiative

The Regional Greenhouse Gas Initiative (RGGI), formed in 2009, is the nation’s first binding cap-and-trade program aimed at reducing GHG emissions from the power sector. Ten states—Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont—currently participate in the program, with New Jersey being the latest state to rejoin RGGI. The program is enforced through independent regulations adopted by participating states and is designed around a regional emissions allowance cap—one allowance provides for regulated entities to emit one short ton of CO2. In 2014, RGGI states adjusted down the regional cap to account for banked allowances. The adjusted allowance cap is 58.3 million in 2019 decreasing to 56.3 million in 2020. In 2017, the RGGI states extended the emissions cap out to 2030. Additional revisions to the cap are expected to be made in 2021 through 2025.

Note that Pennsylvania Governor Tom Wolf (D), issued an executive order on Oct. 3, 2019, directing the state Department of Environmental Protection to initiate a rulemaking no later than July 31, 2020, to establish a carbon budget consistent with and to facilitate participation in the RGGI program.

Transportation and Climate Initiative

The Transportation and Climate Initiative (TCI) was formed in 2010 by a coalition of Northeast and Middle Atlantic states and Washington, D.C., with the intent of reducing carbon emissions from the transportation sector. Thirteen jurisdictions, including 12 states—Connecticut, Delaware, Maine, Maryland, Massachusetts, *New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Virginia—and Washington, D.C., currently participate in the TCI.

In 2018, TCI members committed to designing a regional cap-and-invest policy to reduce carbon emissions from the transportation sector. The policy would provide for each TCI jurisdiction to invest program proceeds “into low-carbon and more resilient transportation infrastructure.”

On Oct. 1, 2019, the TCI released a framework for its draft regional policy proposal, addressing which entities would be regulated under the program, emissions reporting and monitoring requirements and equity concerns. This framework was followed by a draft Memorandum of Understanding (MOU) released in mid-December that would, in addition to committing participating jurisdictions to implementing the cap-and-invest program, require participants to jointly develop a model rule that achieves the following: establishes and implements a regional cap on CO2 emissions from motor vehicles fueled by gasoline and on-road diesel; develops an emissions allowance auction process; requires regulated fuel suppliers to report emissions and hold allowances; and provides for regualtory flexibilities. In particular, the draft MOU proposes a three-year compliance period, mechanisms for cost-containment and emissions-containment, allowance banking, and alternative compliance as potential flexibilities that may be built into the program. The release of the draft MOU was accompanied by modeling showing the potential emissions reduction benefits under the program. 

*Note that on Dec. 18, Governor Chris Sununu (R) announced via twitter that New Hampshire would no longer be participating in TCI. 

Additional Resources

• Center for Climate and Energy Solutions (C2ES), state climate policy maps
• C2ES, U.S. State Greenhouse Gas Emissions Targets