Carbon auction nets $106.5 million for 10 states

If you're new here, you may want to subscribe to our or .

| Sourced From |

ALBANY, N.Y. - The nation’s second auction of carbon dioxide emissions allowances is bringing $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.

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.

By MARY ESCH