On 11 March 2020 New Jersey participated in the first 2020 auction of the Regional Greenhouse Gas Initiative (RGGI) after rejoining as of January 2020. New Jersey is the 10th US east coast state to become a member of RGGI.

The reentry follows the adoption of the final legislation for establishing a power sector ETS and rejoining RGGI on 17 June 2019. The legislation is consistent with the RGGI Model Rule and sets a 2020 emissions cap of 18 million short tons of CO2 for the state, increasing RGGI’s overall cap to 96.4 million short tons of CO2 from 80.2 million short tons in 2019.

On 17 April 2020 New Jersey released a Strategic Funding Plan governing how the state will use its RGGI auction proceeds. According to this document, New Jersey will use the revenue for programs that reduce greenhouse gas emissions, drive forward projects that boost clean energy and create jobs, protect the health of residents in environmental justice communities and increase the resiliency of coastal communities. This includes catalyzing clean and equitable modes of transportation in the state, promoting carbon stored by the soils and plants in marine systems (blue carbon), enhancing forests and urban forests as well as establishing a Green Bank to stimulate clean energy innovation in New Jersey.

New Jersey was a founding member of RGGI but in 2011 left the program and scrapped its ETS under former Governor Chris Christie. Current Governor Phil Murphy issued an executive order after taking office in January 2018, which began the process of rejoining RGGI.