The Regional Greenhouse Gas Initiative (RGGI) held the first auction for carbon permits in North America and as previously reported, many deem it a success.
RGGI (pronounced ‘reggie’) is a regional agreement between ten northeastern states to manage and regulate greenhouse gas emissions with a system that requires fossil-burning utilities to buy permits for the carbon they release into the atmosphere.
Although demand for the allowances was relatively high at the online auction, with four times as many bids as the available supply allowed, the permits sold for less than what some expected. One study predicted a higher price would be set for the carbon permits at the RGGI auction, but most estimates did not anticipate the severity of the current financial crisis.
The RGGI auction brought out 59 bidders, surpassing expectations of around 20 interested parties. The permits sold for $3.07 a ton, raising nearly $39 million for the state coffers of the six participating states.
Under the RGGI process, the carbon caps will be reduced incrementally for a total reduction of 10 percent by 2018. Emissions requirements will take effect Jan. 1, 2009.
Image credit: SnapsterMax via flickr under a Creative Commons License
Nice article. You wrote “RGGI (pronounced ‘reggie’) is a regional agreement between ten northeastern states to manage and regulate greenhouse gas emissions with a system that requires fossil-burning utilities to buy permits for the carbon they release into the atmosphere.”
I thought RGGI only covers power plant emissions… power plant emissions being roughly only a third of global warming emissions generally.
If so, seems like an important point to note about the nation’s first regional carbon auction.
Erin-
Right, RGGI only covers power plant emissions. RGGI does nothing to tackle other sources of greenhouse gas causing emissions (i.e tailpipe emissions).
I think that was implied by what I wrote but thanks for adding that power plants only make up about 1/3 of total global emissions – a very important point indeed.