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http://www.rggi.org/docs/Secondary_Market_Report_News_Release_FINAL.pdf
FOR IMMEDIATE RELEASE — September 4, 2009
Contact — Emilee Pierce: 212-417-3179
(New York, NY) — The number of market participants and volume of allowances traded in the secondary market for RGGI carbon dioxide (CO2) allowances increased significantly throughout the second quarter of 2009, according to a report released today by the states participating in the Regional Greenhouse Gas Initiative (RGGI). The report finds that there is “no evidence of anti-competitive conduct” and identifies increasing participation rates as a sign of “competitiveness and efficiency” in the market.
The Report on the Secondary Market for RGGI CO2 Allowances was prepared by Potomac Economics for RGGI, Inc. on behalf of the RGGI participating states. Key findings include the following:
• The number of participants in the market for RGGI allowance derivatives increased over the period. More than 30 firms had significant financial positions in RGGI futures and options contracts by the end of the second quarter of 2009, as compared to 26 at the end of the first quarter.
• Trading volumes continued to grow rapidly, as futures contract trading saw a five-fold increase from the end of the first quarter of 2009.
• Prices for RGGI futures were more stable in the second quarter of 2009 than in previous periods, indicating greater certainty about the value of RGGI allowances in the future.
• The actual transfer of ownership of allowances more than doubled from the end of the first quarter of 2009, showing that market participants are able to obtain allowances through the secondary market. However, the vast majority of allowances held have been acquired through RGGI auctions.
Potomac’s conclusions were based on the analysis of data reported to the Commodity Futures Trading Commission, the Chicago Climate Futures Exchange, the New York Mercantile Exchange and other data. The report is a part of Potomac’s ongoing monitoring of the auction and secondary markets for CO2 allowances.
“This independent report by the RGGI market monitor is an important additional confirmation that the competitive marketplace is working,” said Jonathan E. Schrag, Executive Director of RGGI, Inc. “The market monitor will continue to analyze data from the markets where RGGI allowances trade, and will report any sign of anti-competitive conduct to the states.”
The complete Report on the Secondary Market for RGGI CO2 Allowances is available at www.rggi.org/docs/Secondary_Market_Report_September_2009.pdf
About the Regional Greenhouse Gas Initiative
The 10 Northeast and Mid-Atlantic states participating in RGGI (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Hampshire, New York, Rhode Island and Vermont) have designed the first market-based, mandatory cap-and-trade program in the U.S. to reduce greenhouse gas emissions. Power sector CO2 emissions are capped at current levels through 2014. The cap will then be reduced by 2.5 percent in each of the four years 2015 through 2018, for a total reduction of 10 percent.
A CO2 allowance represents a limited authorization to emit one ton of CO2, as issued by a respective participating state. A regulated power plant must hold CO2 allowances equal to its emissions to demonstrate compliance at the end of each three-year control period. The first control period for fossil fuel-fired electric generators under each state’s CO2 Budget Trading Program took effect on January 1, 2009 and extends through December 31, 2011. Allowances issued by any participating state are usable across all state programs, so that the ten individual state CO2 Budget Trading Programs, in aggregate, form one regional compliance market for CO2 emissions. For more information turn to: www.rggi.org
About Regional Greenhouse Gas Initiative, Inc.
RGGI, Inc. was created in September 2007 to provide technical and administrative services to the states participating in the Regional Greenhouse Gas Initiative. RGGI, Inc. is a 501(c) 3 nonprofit organization. For more information please visit: www.rggi.org/rggi
For full content as PDF Refer:
http://www.rggi.org/docs/Secondary_Market_Report_News_Release_FINAL.pdf
