US Northeast Carbon-Offset Sale Raises a Record $124.5 Million

June 9th, 20135:03 am @

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Regional Greenhouse Gas Initiative
Inc., the nonprofit that administers the U.S. Northeast’s
greenhouse-gas emissions program, raised a record $124.5 million
in its quarterly auction of carbon allowances after slashing
next year’s supply by almost half.

RGGI sold all of the 38.8 million allowances that were
offered at a clearing price of $3.21, up from $2.80 in March and
the first time in the program’s history that prices increased in
two consecutive quarters, the New York-based group said today in
a statement on its website.

RGGI said in February that it will reduce the number of
available permits 45 percent next year in an effort to drive up
prices. The June 5 auction marked the first time since 2010 that
every allowance was sold in two consecutive quarters. The
surplus had depressed prices to no more than no more than $1.93
in the 11 quarterly events through December.

“RGGI continues to generate hard data showing that market-based emission-reduction programs are an effective way to
realize environmental goals,” Collin O’Mara, secretary of the
Delaware Department of Natural Resources and Environmental
Control and RGGI’s chairman.

Each permit gives a company the right to emit one ton of
carbon dioxide in a cap-and-trade program that includes the six
New England states, New York, Delaware and Maryland. States use
the proceeds for renewable-energy programs, utility programs,
assisting consumers with bills or to pad their general funds.

About $117 million, the previous high, was raised in RGGI’s
third auction in March 2009. The next sale is scheduled for
Sept. 4.

To contact the reporter on this story:
Justin Doom in New York at
jdoom1@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net

Article source: http://www.businessweek.com/news/2013-06-07/u-dot-s-dot-northeast-carbon-offset-sale-raises-a-record-124-dot-5-million