Since 2009, when the Regional Greenhouse Gas Initiative (RGGI) was officially launched, it has become clear that the cap-and-trade mechanism for carbon will continue to evolve. In the third of a series of presentations given at the Renewable Energy Training Week in Abu Dhabi, RAP senior associate David Farnsworth offers a closer look at the RGGI model and a key aspect of its success—more than half of revenue from carbon allowance auctions goes toward energy efficiency programs, a “cap-and-invest” approach.Mr. Farnsworth encouraged regulators to consider whether a price on carbon will, alone, be sufficient to achieve the goals of a cap-and-trade initiative. One of RGGI’s most important design decisions was to auction allowances, rather than give them away, and to invest the proceeds in clean energy. The RGGI model and resulting investment demonstrates that energy efficiency is a least-cost resource—the cheapest way to “scrub” a ton of CO2 today is to avoid emitting it in the first place.