This Time It Counts: An Update on the Northeast Regional Greenhouse Gas Initiative (RGGI)
The first RGGI auction in the "compliance obligation period"-all mandated utilities MUST comply from now on or face penalties and fines-went off quite smoothly with a healthy level of bidders, large and small (see chart below), and no sign of foul play by any of the bidding entities. The press release and auction summary can be found here.
The quarterly auction raised over $117 for energy efficiency, renewable energy and other consumer benefit programs [Note to readers that we do wish to make a few minor tweaks in the allocation policy now under development in New York, directed by NYSERDA, that I will follow up on in my blog] in the ten RGGI states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont). Pollution credits that were auctioned included 2009 first quarter compliance and a small portion of 2012 future credits (RGGI allows for up to 5% of 3-year-ahead pollution allowances-2012 in this case-in the primary market as an hedging option for bidding parties). The table below lists the final clearing prices accordingly:
The message from Pete Grannis, Chair of the RGGI Board of Directors, at the conclusion of the auction was particularly timely given the recent announcements by the Obama Administration-backing a global warming cap and trade-via-100% auction-and from the opposition camp with recent statements that it's too costly or too cumbersome:
Our continued success provides further support for President Obama's position that a national cap and trade program with allowance auctions is the right policy for the country and the right approach for addressing the most pressing environmental and economic issue of our time: climate change.
As Joe Romm most recently blogged, and President Obama spoke upon yesterday, we need a strong national cap and trade policy to regain our competitive edge in the 21st Century. RGGI works well, and it's time we promoted it to a higher level.