2009.12.18, Carbon auction nets $106.5 million for 10 states, The Associated Press

Carbon auction nets $106.5 million for 10 states

December 19, 2008 10:34 AM
Seacoastonline.com

ALBANY, N.Y. (AP) — The nation's second auction of carbon dioxide emissions allowances will bring $106.5 million to the 10 northeastern states in the Regional Greenhouse Gas Initiative.
Pete Grannis, the organization's chairman, said the results prove that distributing allowances through auctions in a carbon dioxide cap-and-trade program can be successful. RGGI is seen as a blueprint for a national program to curb global warming by reducing carbon emissions.

RGGI reported Friday that all 31.5 million allowances, each representing a ton of carbon, were sold in the Dec. 17 auction for a clearing price of $3.38 per allowance.

RGGI includes Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.

RGGI reported that 69 bidders from the energy, financial and environmental sectors participated in the auction run by World Energy Solutions, which operates online exchanges for energy and green commodities.

The money, which is to be used for energy efficiency and clean energy technologies, will be distributed to the states in January.

"Until now, we've essentially been giving power plant owners freedom to pollute," said Dan Sosland, executive director of Environment Northeast, a regional nonprofit research and advocacy group. "Now states can use the funds from these carbon allowances to make our homes, schools and businesses more energy efficient."

The first auction, on Sept. 25, sold 12.5 million allowances at a clearing price of $3.07 each, raising nearly $38.6 million for the six RGGI states participating. All 10 states were in the second auction.

RGGI is the first mandatory, market-based cap-and-trade program in the United States to reduce greenhouse gas emissions. Energy producers are required to buy enough allowances to cover every ton of carbon dioxide they emit.

The total number of allowances is capped and will be gradually reduced in future years. The idea is that power plants will have to invest in cleaner technology or switch to cleaner fuel as emissions limits tighten.

Other interests may also buy allowances and later sell them to energy producers. At least one environmental group, the Adirondack Council, bought allowances to "retire" them, thus reducing the total amount of carbon power plants will be able to emit.

"RGGI sets a national precedent for addressing global warming," said John Rogers, an energy analyst for the Union of Concerned Scientists. "To ensure the initiative fulfills its potential, however, participating states must make sure that the region's utilities don't buy additional coal-based electricity from outside the region."

Rogers co-authored a report released Friday that said RGGI's success in reducing global carbon emissions would be diminished if coal-fired plants in nearby, non-RGGI states increased capacity to sell power in the region.

One RGGI state, New Jersey, has taken steps to address that issue by requiring the state's public utilities board to make a plan to reduce the risk of increased coal-fired electricity imports.

Proceeds to states:
ALBANY, N.Y. (AP) — Here's a breakdown of how much each of the 10 states in the Regional Greenhouse Gas Initiative will receive from the Sept. 25 and Dec. 17 carbon auctions, the first two in a quarterly series. The list includes the state's total allocation, the number put up for sale, and the revenue generated.
Connecticut: 10.7 million tons allocated; 2.7 million sold; $8.8 million.
Delaware: 7.5 million tons; 755,979 sold; $2.5 million.
Maine: 6 million tons; 1.7 million sold; $5.6 million.
Maryland: 37.5 million tons; 10.6 million sold; $34.4 million.
Massachusetts: 26.6 million tons; 8.7 million sold; $28.2 million.
New Hampshire: 8.6 milion tons; 1.2 million sold; $4 million.
New Jersey: 22.9 million tons; 4.5 million sold; $15.3 million.
New York: 64.3 million tons; 12.4 million sold; $41.9 million.
Rhode Island: 2.6 million tons; 877,548 sold; $2.8 million.
Vermont: 1.2 million tons; 404,524 sold; $1.3 million.