The 29th auction of the Regional Greenhouse Gas Initiative (RGGI) sold about 25.4 million CO2 allowances at a clearing price of $6.02, up 12 cents from a clearing price of $5.50 for RGGI’s last auction in June.
RGGI, a market-based regulatory greenhouse gas reduction program with nine Northeastern and Mid-Atlantic participating states, said the allowances included an initial offering of about 15.4 million CO2 allowances and 10 million additional cost containment reserve (CCR) allowances.
The auction was held on Sept. 9. Proceeds from the auction totaled about $152.8 million.
Katie Dykes, deputy commissioner for energy of the Connecticut Department of Energy and Environmental Protection, and chair of the RGGI Board of Directors, said in a statement that, with a seven-year track record, “the RGGI states have demonstrated that reducing pollution is fully compatible with economic growth and providing reliable power.”
According to RGGI, proceeds from all of the program’s CO2 allowance auctions exceed $2.2 billion. The money is reinvested in energy efficiency, renewable energy, direct bill assistance, and greenhouse gas abatement programs.
RGGI and the Clean Power Plan
“The RGGI states‘ success in reducing climate pollution from the power sector has paved the way for other states to adopt effective market-based climate programs,” Acadia Center President Daniel Sosland said in a statement. “RGGI states have created the blueprint for an effective and economically beneficial pathway to a clean energy future.”
According to the Acadia Center, a nonprofit research and advocacy group, the U.S. Environmental Protection Agency will allow RGGI states to comply with the Clean Power Plan, with a few minor changes to the RGGI model.
One of those changes would be a revision to the CCR – a fixed supply of 10 million allowances that are only available for sale if CO2 allowance prices exceed certain price levels.
“The purchase of ten million [CCR] allowances in Auction 29 demonstrates the need for reform of this price control mechanism,” Jordan Stutt, policy analyst, Acadia Center, said. “As currently structured, additional allowances from the [CCR] become available for purchase when price thresholds are met. These additional allowances have now been made available in both years of the [CCR’s] existence.”
Stutt added that allowances purchased from the CCR inflate the RGGI cap and undermine the program’s environmental performance and complicate the process of demonstrating compliance with the Clean Power Plan and state greenhouse gas reduction requirements.
Lead image: Wooden gavel for an auction. Credit: Shutterstock.