The only regional cap-and-trade program in the US, the Regional Greenhouse Gas Initiative (RGGI), just held its most successful carbon auction yet.
It raised a record $124.5 million for the quarter, selling all of the 38.8 million allowances at a $3.21 each, up from $2.80 in the previous quarter. Each allowance gives utilities the right to emit one ton of carbon.
Last quarter, the auction raised $117 million.
In February, because the program has been so successful at cutting emissions, RGGI cut the "cap" of allowable emissions by 45%, allowing power plants to emit 90 million tons a year, down from 165 million tons a year. The cap will decline 2.5% each year from 2015-2020.
After successfully cutting emissions during the first three years, the states agreed to cut the cap significantly because the 165 million allowances greatly exceeded the demand of 91 million. That’s because carbon emissions are 30% lower since RGGI began in 2008.
That will bring in $2.2 billion in revenue to the region by 2020, raising funds to increase each state’s energy efficiency and renewable energy levels, as well as funds for direct bill assistance and climate change adaptation programs.
"With 20 auctions completed, RGGI continues to generate hard data showing that market-based emission reduction programs are an effective way to realize environmental goals, save consumers money, and create jobs," says Collin O’Mara, Chair of RGGI and Secretary of Delaware’s Department of Natural Resources and Environmental Control.
"Delaware’s reinvestment of auction proceeds in energy efficiency programs has not only avoided carbon pollution, but helped businesses and families reduce their electricity bills, and workers find jobs weatherizing homes, retrofitting outdated industrial equipment, and constructing more energy-efficient buildings."
All six New England states, New York, Delaware and Maryland participate in the program. Governor Christie pulled New Jersey out of the program. Since 2008, $1.6 billion has been generated in economic value 16,000 jobs have been created.
Corporate front group Americans for Prosperity, bankrolled by the Koch Bros and other leading polluters, have been trying to roll RGGI back. They have tried unsuccessfully to get various states to leave the program but so far have only found success in New Jersey. ALEC provides the legislative template, State Withdrawal from Regional Climate Initiatives, which did eliminate the other regional cap-and-trade programs that were about to take off.
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