Second RGGI Auction Nets $106.5M

Second RGGI Auction Nets $106.5M

More than 31.5 million carbon permits were sold in the second auction of the Regional Greenhouse Gas Initiative (RGGI) Wednesday, raising some $106.5 million for energy efficiency programs in the 10 state region.

The shares sold for $3.38 per ton of carbon dioxide, 31 cents higher than the clearing price of $3.07 per allowance in the first auction.

Sixty-nine bidders from the energy, financial and environmental sectors participated in the second auction, generating demand for allowances that was 3.5 times the available supply. The third auction is set for March.

RGGI, the country's first mandatory greenhouse gas cap-and-trade system, will begin Jan. 1.  The system's goal is to reduce emissions 10 percent between 2015 and 2018, but emissions in 2008 are expected to be about 16 percent below the RGGI cap, according to a report issued this week by Environment Northeast.

The 10 RGGI states are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.

Nearly all allowances will be auctioned, rather than given away.

"Once again the results prove that distributing allowances via auctions in a carbon dioxide cap-and-trade program can be successful," Pete Grannis, RGGI board chair, said in a statement. "We look forward to developing a partnership with the Obama Administration to create a strong federal climate action plan."