Nation's first greenhouse gas auction
Sep 29, 2008 - excitenews.com
ALBANY, N.Y. (AP) - Power companies
were the biggest spenders in the nation's first cap-and-trade
greenhouse gas auction, raising nearly $40 million
that will be spent by Northeast states on renewable
and energy efficient technologies.
All fossil fuel-burning power plants
in a 10-state region were required to buy credits
to cover the carbon they emit. The results of the
auction were released Monday.
The Regional Greenhouse Gas Initiative
is viewed as a possible model for a national program
to reduce emissions of carbon dioxide.
Energy, financial and environmental
interests paid $3.07 per allotted ton of emissions,
about 65 percent more than the minimum set price of
The 10-state RGGI consortium includes
Connecticut, Delaware, Maine, Maryland, Massachusetts,
New Hampshire, New Jersey, New York, Rhode Island
Six of the states participated in the
first of a series of planned quarterly auctions. The
next is scheduled for Dec. 17.
The $38.5 million raised in Thursday's
auction will be distributed to Connecticut, Maine,
Maryland, Massachusetts, Rhode Island and Vermont.
The states plan to invest the funds in renewable and
energy efficient technologies, as well as programs
to benefit utility rate payers.
All 12.5 million allowances were sold
to 59 bidders representing a myriad of industries.
Most of the allowances were purchased
by electric power producers, according to RGGI.
Carbon credits have traded in commodities
markets, but this was the first government-mandated
auction in the U.S.
Bidders were required to register in
advance and verify funds were dedicated to purchasing
credits. Those credits could be resold later to power
producers that anticipate exceeding their limit.
At least one environmental group, the
Adirondack Council, said it planned to purchase some
credits to reduce the overall amount of carbon emissions
permitted in the region.
"The first RGGI auction has successfully
used market forces to set a price on carbon, and this
will send a clear market signal to support the investment
in clean energy technologies," said Pete Grannis,
commissioner of the New York state Department of Environmental
Conservation and RGGI chairman.
RGGI caps the total amount of carbon
that power plants in the 10 states can pump out of
their smokestacks at 188 million tons, which is slightly
higher than the current level. The cap will be lowered
by 10 percent over the next 10 years
.Other regional greenhouse gas coalitions,
such as the Western Climate Initiative and the Midwestern
Greenhouse Gas Accord, are in the early stages of