The Regional Greenhouse Gas Initiative’s (RGGI) most recent quarterly carbon allowance auction set a record high price at $5.02 per allowance, up from $4.00 per allowance in the last auction, according to a New Hampshire Public Radio article.
RGGI is an interstate “cap and trade” program that regulates and reduces CO2 emissions from electric power generators. The nine participating northeast states, which include Connecticut, impose a regional cap on CO2 emissions and then sell emission allowances, each equal to one ton of CO2 emissions, to regulated power plants at RGGI auctions. Plants purchase allowances to demonstrate compliance with each state’s CO2 budget trading program.
According to the article, the price increase may be due to speculation that other states will join RGGI in the wake of proposed new U.S. Environmental Protection Agency rules that would regulate greenhouse gas emissions from future and existing power plants. States may see participation in a cap and trade program like RGGI as a way to comply with those rules. The National Conference of State Legislatures has more on the rules.
The next RGGI auction is September 3, 2014. For more information on Connecticut’s participation in RGGI, see OLR Report 2013-R-0307 on climate change issues and OLR Report 2013-R-0346 on proposed amendments to RGGI regulations.
