Prices for emissions allowances under the Regional Greenhouse Gas Initiative (RGGI) slid once again in the most recent auction. At $2.05 per ton of CO2 equivalent emissions, the most recent price is about 6 percent lower than the September auction, which netted $2.19 per ton, reports Greenwire.
In the June auction, the average price was $3.23 per allowance.
In total, the auction yielded $61,587,120, according to a press release (PDF). Ten Northeast and Mid-Atlantic states mandate that utilities participate in the RGGI.
For the first time some permits went unsold, reports Bloomberg. All 28.6 million 2009 permits were sold, but only 1.6 million of the 2.2 million 2012 permits sold.
Still, the short-term price fell more than the futures auction, suggesting that companies foresee a day when they will be required to own emissions allowances. The 2012 allowances sold for $1.86 a ton, down just a penny from the $1.87 they fetched in September.
While the market for RGGI permits is oversupplied, power plants and speculators remained interested enough to place orders, Emilie Mazzacurati, a research manager for Point Carbon, told Bloomberg.
RGGI auctions are running “like clockwork,” said David Littell, Commissioner of the Maine Department of Environmental Protection and Chair of the Regional Greenhouse Gas Initiative Inc. Board of Directors. “Six successful auctions, more than 100 bidders and $494 million for green energy and green jobs – RGGI is showing that cap-and-trade works,” he said in the release.
Some funds gained from the auctions are going towards weatherization and energy efficiency retrofits. To see how various states are using their funds, click here.
California recently put into motion its own cap-and-trade plan. The program would cap emissions of large emitters including power plants, refineries, cement plants and other big factories at 15 percent below today’s levels by 2020, and allow companies to buy and sell emissions allowances to meet their goal.
California is working with six other western states and four Canadian provinces through the Western Climate Initiative (WCI) to establish a regional cap-and-trade program that may deliver GHG emission reductions at costs lower than a California-only program.