Sep

25

FIRST U.S. CARBON MARKET REACHES 1 YEAR MILESTONE

Filed Under RGGI, Regional Greenhouse Gas Initiative, US Carbon Markets 

States Release Results of Fifth Auction Held since September 2008

2009 Vintage Allowances Sold at $2.19
2012 Vintage Allowances Sold at $1.87

(NEW YORK, NY) — The states participating in the nation’s first cap-and-trade system for greenhouse gases conducted their fifth regional auction of carbon dioxide (CO2) allowances Wednesday, September 9th. The auction marks one year since the debut of the Regional Greenhouse Gas Initiative (RGGI) auctions and brings the total amount of proceeds to more than $432.7 million since September of 2008.

Wednesday’s auction yielded a total of $66,278,239.35 from the sale of 28,408,945 allowances for the 2009 vintage and 2,172,540 allowances for the 2012 vintage.

Since last September over 100 bidders, including electric utilities, manufacturers, financial institutions, environmental groups, and individuals have participated in the RGGI auctions for CO2 allowances. Trading volumes on national, regulated exchanges now match volumes in other established carbon markets, such as the Kyoto Clean Development Mechanism. And every major power plant in the 10-state RGGI region now reports quarterly CO2 emissions to the public in an emissions and allowance tracking system.

“Once again the RGGI auction was a success, with demand running much higher than supply and compliance entities getting most of the allowances,” said Pete Grannis, Commissioner of the New York Department of Environmental Conservation and Chair of the Regional Greenhouse Gas Initiative, Inc. Board of Directors. “RGGI has established a price for carbon, demonstrated that auctions are an efficient and effective way to allocate CO2 allowances and enabled the states to return millions of dollars in benefits to consumers through investment in energy savings and clean energy.”

In a 2005 Memorandum of Understanding the states committed to use at least 25 percent of their allowance budgets for consumer benefit programs. In practice, the states have chosen to auction nearly all of the allowances and invest the proceeds in energy efficiency, renewable energy, technology development, and other programs that return the value of the allowances to consumers. Overall the states are investing the vast majority of proceeds in energy efficiency.

“The states participating in RGGI are investing auction proceeds in energy efficiency programs as the most effective way to manage energy demand while making the transition to a clean energy economy,” said Mark Mauriello, Commissioner of the New Jersey Department of Environmental Protection and Director of the Regional Greenhouse Gas Initiative, Inc. Board of Directors.

Energy efficiency also generates significant bill savings for consumers. A report by the New York State Energy Research and Development Authority forecasts that RGGI-funded energy efficiency measures will save New York’s consumers more than $1 billion over the lifetime of the installed measures. Similarly, data filed by Massachusetts utilities and made available by the Massachusetts Department of Energy Resources shows that a 2007 investment of $120 million in energy efficiency will yield an estimated $673 million in cumulative bill savings for participating customers.

“RGGI is a down-payment on our clean energy future and, through energy efficiency investments, it’s already paying dividends,” said Phil Giudice, Commissioner of the Massachusetts Department of Energy Resources and Treasurer of the Regional Greenhouse Gas Initiative, Inc. Board of Directors. “Since last September the states have allocated millions of dollars to programs that make the region’s homes, businesses, and communities more energy efficient, creating new jobs in the process. We look forward to working with the federal government to expand these strategic investments in the years ahead.”

To learn more about how each state is investing RGGI auction proceeds, please visit:

http://www.rggi.org/states/program_investments

Additional details about RGGI Auction 5 may be found in the Market Monitor Report for Auction 5, available at:

http://www.rggi.org/docs/Auction_5_News_Release_MM_Report.pdf