The ten states participating in the Regional Greenhouse Gas Initiative (RGGI) conducted their 9th regional auction of carbon dioxide (CO2) allowances last week. The auction marks two years since the debut of the RGGI CO2 allowance auctions–the nation’s first market-based regulatory program to reduce greenhouse gas emissions.
Since September 2008, proceeds from RGGI auctions have totaled $729,281,959, over 80% of which is being invested in strategic energy programs to benefit consumers and build a clean energy economy.
The clearing price for last week’s auction was $1.86 per allowance, the lowest point in the market’s young history. The Wall Street Journal said an oversupply of allowances due to reduced power demand was responsible for the low point. 75% of the allowances offered for sale were sold.
Forty-five entities submitted winning bids, with bids ranging from $1.86 to $3.00. Electric generators and their corporate affiliates purchased 92% of the allowances sold.
States also offered a smaller number of CO2 allowances for a future control period (2012-2014). The offering of future control period CO2 allowances yielded a total of $2,440,320 from the sale of 1,312,000 allowances. Over 61% of future control period allowances offered for sale were sold. The auction clearing price was $1.86 per allowance.
“RGGI auctions continue to set an example for the nation," said David Littell, a Commissioner of the Maine Public Utilities Commission and Chair of the RGGI, Inc. Board of Directors. "Nine successful CO2 auctions have delivered allowances to the power plants that need them for compliance and enabled states to return millions of dollars to consumers through investments in energy savings and clean energy."
The quarterly CO2 allowance auctions are just one component of a program that regulates CO2 emissions from 209 power plants across 10 states. The RGGI participating states have also built an interactive online emissions and allowance tracking system to track, record, and publicly report RGGI program data and market activity, including CO2 emissions from regulated power plants and CO2 allowance transactions among market participants.
RGGI shows how a market-based program to reduce greenhouse gas emissions can help build a clean energy economy. Overall, RGGI participating states are investing 60% of proceeds from RGGI CO2 allowance auctions to improve energy efficiency; 10% to accelerate the deployment of renewable energy technologies; and an additional 10% to provide direct consumer benefits, including energy bill payment assistance to low-income ratepayers.
“RGGI state investments in efficiency and renewable energy sources provide triple benefits–to the environment, consumers and the economy," said Shari Wilson, Secretary of the Maryland Department of the Environment. "By leveraging federal, state, and private investments, the investments made with RGGI proceeds in Maryland this year will save families and businesses more than $125 million, while creating 630 new green collar jobs."
“In the absence of federal legislation, the states will continue to implement market-based programs as a part of a broader climate action agenda," said Justin Johnson, Commissioner of the Vermont Department of Environmental Conservation. "RGGI states look forward to continued collaboration with the Western Climate Initiative, and other jurisdictions, to share best practices for the implementation of CO2 allowance auctions and other program components."
In Related News…
New Jersey made $10 million from selling CO2 allowances in the latest auction. It was the largest sum New Jersey has gotten from the RGGI’s cap-and-trade program in a year and a half.
Read the Star-Ledger story at the link below.
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