A first-in-the-nation cap-and-trade program aimed at reducing carbon emissions may be changing, after participating states identified  an oversupply of pollution allowances.

The Regional Greenhouse Gas Initiative, or RGGI, is a collaborative effort by 10 states to cap their carbon dioxide emissions. Electric power generators buy allowances to offset their plant's emissions – and can trade them with each other. But now energy experts say the cap – of 188 million tons of carbon per year – was set too high. Ken Kimmell is the Commissioner of the Massachusetts Department of Environmental Protection.

"It was based on the knowledge that the decision makers had in 2005 about demand for power, the relative prices of natural gas versus coal and other factors and no one has a crystal ball."

The sour economy depressed demand for electricity, while prices fell for relatively clean-burning natural gas. And many generators took steps to improve energy efficiency. Those combined to significantly lower demand for the pollution allowances. But, Kimmell says, RGGI deserves credit for improving efficiency.

"The region as a whole, according to a report that was done, will enjoy a $1.6 billion net economic benefit to RGG. In addition we have created jobs and we have kept money local rather than going to coal or to gas or overseas."

Last month, Massachusetts, Connecticut, Vermont, New York, Delaware and Rhode Island announced they were permanently eliminating 72 percent of the unsold carbon allowances. That's an effort to prevent energy suppliers from stockpiling allowances for future years, which could eliminate the incentive to reduce emissions.

And now states are considering a lower CO2 cap for the next 3 year period. An official with the New England Power Generators Association says the group has yet to survey member views on potential changes to RGGI.