WASHINGTON: The price for power plants to emit 1 ton of carbon dioxide in nine northeastern US states cleared at $4.88 per short ton at the Regional Greenhouse Gas Initiative's (RGGI) 25rd permit auction, the market's administrator said on Friday.
The electronic auction, held on Wednesday, raised a total of $87.8 million that can be used by the participating states to invest in clean energy and other consumer benefit programs.
One carbon trader said he had expected a higher clearing price given the relatively strong interest in the allowances in recent months.
At the previous auction in June, permits cleared at a record high $4.02 per short ton. The benchmark RGGI contract was down 10 cents at $4.90 in light secondary trading following the release of the results, the trader said.
All of the 18 million emissions allowances offered at the auction by the nine member states were sold, and there were 43 bidders. Electricity generators and their corporate affiliates bought 80 percent of the allowances.
The auction was the second since the US Environmental Protection Agency unveiled new carbon limits on power plants and endorsed such cap-and-trade systems as a way to comply.
A number of other states have approached RGGI officials in recent months to discuss joining what the initiative has called a "plug-and-play" solution for other states to cut carbon emissions and achieve targets set by the EPA.
"The RGGI states provide a national model on how to effectively reduce carbon pollution and transition to cleaner energy sources, which leads to lower energy bills and creates jobs," said Joe Martens, commissioner of the New York State Department of Environmental Conservation and vice-chair of RGGI's board.
Since its launch in 2008, the RGGI's carbon allowance auctions have raised $1.8 billion. Participating states are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.
"Not only are these programs alive and well, but they are ripe for expansion," Ken Kimmell, president of the science advocacy group the Union of Concerned Scientists, said of RGGI and a separate carbon trading program in California.
"These auctions bring in revenue at a time when other funding mechanisms, such as gasoline taxes, are declining," Kimmell, a former chair of RGGI, said in a blog post.
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