The Regional Greenhouse Gas Initiative, a carbon credit market of Northeastern and Mid-Atlantic states, sold 57 percent of its more than 36.4 million allowances offered for sale at its 16th quarterly auction in June. The clearing price of $1.93 matched the previous auction in March and was up slightly from the $1.89 price yielded at the December auction.
Bidders purchased 20.9 million carbon dioxide allowances of the 36.4 million credits up for auction, netting $40.4 million in funds. CO2 credit bids ranged between $1.93 and $6.14 per allowance.
Each carbon dioxide allowance accounts for one short ton of CO2 emissions. A regulated power plant must hold CO2 allowances equal to its emissions to demonstrate compliance at the end of each three-year control period. RGGI’s second control period began Jan. 1, 2012 and extends through Dec. 31, 2014.
The funds generated by the auction will be reinvested by the RGGI states in energy efficiency, clean and renewable energy, direct bill assistance and other consumer benefit programs across the region.
More allowances were sold in the March auction, an indication that the carbon credit market is currently oversupplied. Of the 34.8 million allowances offered, 62 percent, or 21.6 million were sold at auction 15 held March 14, 2012.
The next RGGI auction is scheduled for Sept. 5.
Meanwhile, environmental groups filed a lawsuit last week against New Jersey for Governor Chris Christie’s decision to pull the state out of the RGGI, Reuters reported. Only nine states of the 10-state compact participated in the latest auction.
Last May, Christie called RGGI an ineffective way to reduce carbon emissions and announced the state would withdraw. New Jersey’s Deomcrat-controlled state legislature voted earlier this year to continue participating in RGGI.
The lawsuit, filed by Natural Resources Defense Council and Environment New Jersey argues the decision was illegal because state law requires the Christie administration to notify the public of its intention and to provide a public comment period.