Monday, December 22, 2008

Carbon auction nets Maine, other states $106.5 million

Portland Press Herald

The proceeds from selling emissions allowances will be used for clean energy technologies.

The Associated Press
December 20, 2008

ALBANY, N.Y. — The nation's second auction of carbon dioxide emissions allowances will bring $106.5 million to Maine and nine other 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.

All 31.5 million allowances, each representing 1 ton of carbon, were sold in Wednesday's auction for a clearing price of $3.38 per allowance, RGGI reported Friday.

RGGI includes Maine, Connecticut, Delaware, 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.

"Until now, we've essentially been giving power plant owners freedom to pollute," said Dan Sosland, executive director of Environment Northeast, a regional nonprofit research and advocacy group. "Now states can use the funds from these carbon allowances to make our homes, schools and businesses more energy efficient."

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.

"RGGI sets a national precedent for addressing global warming," said John Rogers, an energy analyst for the Union of Concerned Scientists. "To ensure the initiative fulfills its potential, however, participating states must make sure that the region's utilities don't buy additional coal-based electricity from outside the region."

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