The Regional Greenhouse Gas Initiative, a Kyoto-style agreement among seven northeast US states, has been finalized and signed, and is scheduled to take effect starting in 2009 (we posted about the RGGI discussions last year). The RGGI group includes New York, New Jersey, Vermont, Maine, and most of the rest of the New Englad states. Massachusetts, one of the states working on this agreement, is conspicuously absent; current speculation is that its Governor, Mitt Romney, is going to run for President in 2008, and needed to shore up support among Republican voters.
The RGGI agreement is notable in part because it formalizes a model for carbon trading that many see as a good compromise between climate greens worried about carbon and big businesses worried about a new cost. The carbon allowances plan includes a mix of carbon permits, price levels that automatically trigger additional permits, and the ability to use offsets in lieu of carbon allowances. The Environmental Economics blog has more details, including a link to a lengthy presentation on how the whole thing works.