The first-ever RGGI auction, which we reported on last week, has concluded, and now begins the long process of seeing how it works.

Critics are skeptical, saying the emissions caps were set too high and therefore led to allowance prices that were too low. GOOD Blog contributor Ben Jervey calls it a “doomed-to-failure program (or, at least, doomed-to-very modest success)” while allowing that it “will prove invaluable, mostly for the lessons learned from what goes wrong.”

But RGGI members, who never claimed they’d fix the world immediately, are taking a brighter view: The six states involved in the first round raised $38.5 million from the auction, money RGGI says they’ll invest in “energy efficiency and renewable energy technologies, and programs to benefit energy consumers.” That’s something by itself, even if it takes time for the cap-and-trade plan to have much impact on emissions.

The going rate for a single allowance, once the gavel fell, came to $3.07 per ton of emissions. All twelve million-plus of the allowances put up for sale were sold, not just to power-plant operators but also to financial and environmental organizations.

Fifty-nine buyers took part in the auction, presenting a demand (close to 52 million allowances) that was four times as much as the available supply. Maryland, putting the most allowances up for sale, took home a hefty $16.4 million. According to Deputy Director of Communications Dawn Stolzfus, the state passed a law this year to determine exactly how that money will be spent (even if the categories are broad) — allocating, for instance, 10.5% to “clean energy & climate change programs, outreach & education.”

The next RGGI auction is December 17, and they’ll be held on a quarterly basis for the next three years.

Copyright © 2008 | Distributed by Noofangle Media

This week, for the first time in the United States, an auction was held allowing power plants to bid against each other for the right to spew carbon dioxide into the air.

The goal, of course, is to reduce atmospheric carbon by finding the best way of putting a price tag on it for polluters. Ten Eastern states — Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont — have formed the Regional Greenhouse Gas Initiative (or RGGI, pronounced “Reggie”) to coordinate their efforts by placing mandatory overall caps on emissions levels, then auctioning off allowances for CO2 emissions that can be traded between companies. As a result, companies will have a financial incentive to clean up their own act as quickly as possible.

Other regions of the country, from the state of Florida to a Western Climate Initiative, are either studying or actively planning similar cap-and-trade programs; this one is the result of five years of research and planning and is partly inspired by earlier efforts to tackle acid rain. According to Thursday’s press release, “Under RGGI, the ten participating states will stabilize power sector carbon emissions at their capped level, and then reduce the cap by 10 percent at a rate of 2.5 percent each year between 2015 and 2018.”

A ten percent reduction over ten years, of course, is a far cry from what most activists would like to see. But it’s a more substantial measure than any being taken on a nation-wide level, and the states promise to invest the funds raised in “energy efficiency programs, renewable energy stimulus efforts and other programs to benefit consumers. As a result, RGGI will deliver economic and environmental benefits and improve energy security through reduced use of fossil fuels.”

Six of the participating states offered allowances yesterday, selling credits for over 12 million tons of carbon emissions. Other states will sell their credits in future auctions, the next of which takes place in December.

Copyright © 2008 | Distributed by Noofangle Media