U.S. Northeast has raised a record $124.5 million in its quarterly carbon-offset auction after it cut down the supply for next year by nearly 50 percent. The sale was managed by Regional Greenhouse Gas Initiative Inc. (RGGI), which administers the company’s greenhouse gas emissions program.
RGGI sold off the entire lot of 38.8 million carbon allowances that were offered at a clearing rate of $3.21. The price was up from $2.80 in March; it was the first time that prices were increased in two consecutive quarters in the entire history of the program.
RGGI had said earlier that it would cut down the number of available permits by 45 percent next year in a bid to push up the prices. The auction of June 5 marked the first time since 2010 that every carbon allowance was sold in two consecutive quarters. Prices had been depressed due to a surplus and remained at no higher than $1.93 in the 11 quarterly events through December.
A company receives the right to emit one ton of carbon dioxide with each permit. This is a part of the cap-and-trade program that includes six New England states, Delaware, Maryland and New York. The proceeds are employed by the states to fund utility programs, renewable energy programs, supporting consumers with bills and to pad their general funds. The previous high of about $117 million was raised in March 2009 at RGGI’s third sale.