Yesterday the first carbon auction in the U.S. took place. But we don’t yet know what happened: that news will be released Monday.
The auction was organized by a coalition of 10 northeastern states. The Regional Greenhouse Gas Initiative was scheduled to begin online sales carbon credits, sales which would then continue on a quarterly basis. The plan is structured similarly to the one targeting acid rain (causedby sulfur dioxide) in 1984. That plan was implemented in New York, thenexpanded nationally with Clean Air Act amendments in 1990.
The REGGI site states that the clearing price and number of allowances sold will be posted on Sept. 29, and additional results reported to the public Oct. 8th.
Ironically, the auction took place just after new research was published showing that current American carbon-reduction goals are too high to protect coral. Which makes us wonder: can we modify our behavior fast enough? REGGI was years in the implementation. We just don’t have time to kill.
According to the International Herald Tribune:
"RGGI caps the total amount of carbon that power plants in the 10-state region can pump out of their smokestacks at the current level — 188 million tons (171 million metric tons). Electric power generators must pay for allowances covering the amount of carbon they emit and RGGI will provide a market-based auction and trading system where the generators can buy, sell and trade the emissions allowances. . . . The overall goal is to give utilities an economic incentive, rather than a regulatory mandate, to burn less coal, fuel oil and natural gas, while at the same time making carbon-free energy alternatives such as wind and solar power more economically attractive."
Caps will be reduced over time to encourage reducing carbon.
Climate Action Network offers more details about the U.S. approach to carbon markets.