by Jbs100608 i3 — October 8, 2008—The Regional Greenhouse Gas Initiative (RGGI), a cooperative effort by ten Northeast and Mid-Atlantic states to limit greenhouse gas emissions, has successfully conducted the first-in-the-nation auction of carbon dioxide emission allowances, according to a report from the US Office of Energy Efficiency and Renewable Energy (EERE).
More than $38.5 million was raised from the sale of 12.5 million allowances to bidders from the energy, financial, and environmental sectors. The allowances were sold at a clearing price of $3.07, with demand said to exceed the offerings by more than four times the available amount.
Six of the ten RGGI states offered allowances for sale in the first auction. Connecticut, Maine, Maryland, Massachusetts, Rhode Island, and Vermont will reportedly invest the proceeds from the auction in energy efficiency and renewable energy technologies and other programs that benefit energy consumers.
The allowances can be used for compliance in any of the ten states participating in RGGI, including the four states–Delaware, New Hampshire, New Jersey, and New York–that did not offer allowances in this first auction.
RGGI aims to reduce carbon dioxide emissions through a cap-and-trade program. Under the initiative, the ten participating states will stabilize carbon dioxide emissions from the power sector at capped levels. The states will then reduce the cap 10% by 2018, with 2.5% decreases each year between 2015 and 2018, says RGGI.
Auctioning the allowances allows the states to invest the revenues in programs that reduce energy demand and the use of fossil fuels. The next auction will be held in December 2008, and all ten states are expected to offer allowances for sale in the first 2009 auction and in quarterly auctions thereafter.
Also recently, the Western Climate Initiative (WCI) announced its own plan for a regional market-based cap-and-trade program for the seven US states and four Canadian provinces participating in the initiative.
The governors of Arizona, California, Montana, New Mexico, Oregon, Utah, and Washington; and the premiers of British Columbia, Manitoba, Ontario, and Quebec aim to reduce greenhouse gas emissions by 15% below 2005 levels by 2020. The plan sets a lowest common denominator for the states and provinces, which can each exceed the requirements of the plan.
