First Regional Auction For Carbon Allowances Held

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Albany, NY (AHN) - Ten states participated in an auction for carbon dioxide emissions credits offered and bought by electricity companies.

The Regional Greenhouse Gas Initiative’s auction was designed to be the first mandatory market-based cap-and-trade program in the United States. Its purpose is to reduce greenhouse gas emissions many scientists blame for global warming.

Participating states use the proceeds from the auctions to invest in energy efficiency and renewable energy programs.

According to the Albany Business Review, the buying and selling of emissions credits works like this: Power plants producing more than 25 megawatts of electricity that emit carbon dioxide must buy allowances to do so. These allowances give power companies permission to keep emitting carbon dioxide.

Cumulative carbon dioxide emissions permitted by the allowances are capped, and which will be lowered beginning 2014.

States participating in the regional program are New York, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Rhode Island and Vermont.

By David Goodhue - AHN Reporter