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Carbon Market

R.G.G.I. auction bids out 57 percent of carbon allowances offered

The latest quarterly auction of carbon dioxide allowances under the Regional Greenhouse Gas Initiative fetched $40.4 million recently for the United States' first mandatory carbon dioxide emissions reduction program.

In the recent auction, the 16th quarterly sale so far, about 20.9 million carbon dioxide allowances were sold, representing 57 percent of the 36.4 million allowances offered. Each carbon dioxide allowance can account for 1 short ton of carbon dioxide emissions.

Bids for the carbon dioxide allowances ranged between $1.93 and $6.14 per allowance, with a clearing and reserve price of $1.93.

About 87 percent of the carbon dioxide allowances sold was purchased by electric generators and their corporate affiliates.

The initiative is a cap-and-trade market made up of the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to regulate their greenhouse gas emissions.

The auction was done so that companies could comply with the second control period of the cap-and-trade system, which runs from January 2012 to December 2014. The next auction will be on September 5, 2012.

Money generated by the auction will be used by the member states to reinvest in renewable energy projects and other consumer benefit programs in their region.

According to the report, carbon dioxide emissions in the region were 33 percent lower than the annual pollution cap of 188 million short tons during the first control period. – EcoSeed Staff

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