The states participating in the Regional Greenhouse Gas Initiative (RGGI) this week announced that the auctioning of carbon dioxide (CO2) emissions allowances in North America is off to a strong start. All of the 12,565,387 allowances offered for sale on September 25, 2008 were sold at a clearing price of US $3.07 per allowance.

RGGI Inc. reported that 59 participants from the energy, financial and environmental sectors took part in the first-in-the-nation auction. The demand for the allowances was high with a total of quantity of 51,761,000 allowances demanded. This was four times the available supply for this first auction.

The US $38,575,783 in proceeds produced from the auction will be distributed to Connecticut, Maine, Maryland, Massachusetts, Rhode Island and Vermont, the six RGGI states that offered allowances for sale during the auction. The states have said that they plan to invest those funds in energy efficiency and renewable energy technologies, and programs to benefit energy consumers.

“The 10 RGGI states have demonstrated great leadership in coming together to offer this first carbon cap-and-trade system, and the smooth completion of the initial auction is proof that the RGGI is leading the nation in the battle against climate change,” said Pete Grannis, commissioner of the New York State Department of Environmental Conservation and chair of the Region Greenhouse Gas Initiative, Inc. “RGGI’s example shows that an open and competitive carbon market can be implemented.”

The next allowance auction is set for December 17, 2008. RGGI intends to hold quarterly auctions during the first RGGI three-year compliance period, which will be from January 1, 2009 to December 31, 2011.