Date Set for First Climate Emissions Allowances Auction
ALBANY, New York, March 24, 2008 (ENS) – Ten Northeastern and Mid-Atlantic states working together to reduce greenhouse gases from power plants will hold the first auction of carbon dioxide emissions allowances in the nation for a mandatory emissions reduction program on September 10, 2008.
The 10 states are participating in the Regional Greenhouse Gas Initiative, RGGI, a cap-and-trade program coupled with a market-based emissions trading system aimed at limiting climate warming.
“Climate change is the most significant environmental problem of our generation,” said Pete Grannis, the chair of RGGI, Inc. and commissioner of the New York State Department of Environmental Conservation.
“Absent federal leadership, the Northeast and Mid-Atlantic states of RGGI are taking action to cut greenhouse gas emissions and reduce their impact on the environment,” Grannis said. “Our CO2 auction will be the first in the nation and it is one that should be replicated at the federal level.”
The RGGI will set a limit or cap on the amount of carbon dioxide that can be emitted. Companies that need to increase their emissions must buy credits from those who pollute less. The transfer of allowances is referred to as a trade.
In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions by more than was needed. Thus, in theory, those that can easily reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest possible cost to society.
New Hampshire’s Merrimack coal-burning
power plant (Photo courtesy Public
Service New Hampshire)
The first compliance period for the RGGI cap-and-trade program will begin January 1, 2009. The program will require electric power generators in participating states to reduce their carbon dioxide emissions.
At first, the program will work to reduce carbon dioxide emissions from power plants in the participating states, while maintaining energy affordability and reliability. After the cap-and-trade program for power plants is implemented, the states may consider expanding the program to other kinds of sources.
The 10 states participating in the RGGI, or Reggie, are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont.
The RGGI states have agreed to participate in quarterly uniform regional auctions for the allowances that each state will be offering for sale.
In conducting regional auctions, the RGGI states have come to agreement on a number of design elements.
Through a competitive process, RGGI, Inc. has selected several companies that will each deliver important services.
World Energy Solutions, Inc. was selected to provide services related to the design and implementation of a regional allowance auction.
Perrin Quarles Associates, Inc. was selected to provide services related to the development and implementation of an emissions and allowance tracking system.
ICF International was selected to provide services to support the implementation of the emissions offset component of the Regional Greenhouse Gas Initiative, including the development of model application and submittal documents and model guidance documents.
The Greenhouse Gas Management Institute was selected to provide services related to the development of an accreditation process for independent verifiers of offset projects.
These selections are tentative pending the outcome of a contract negotiation process and final agreement of contract terms and conditions.
“We look forward to working with all of these vendors in support of the implementation of the Regional Greenhouse Gas Initiative’s CO2 cap-and-trade system,” said Grannis.
In New Hampshire, while Governor John Lynch signed onto the RGGI agreement in 2005, and the state Department of Environmental Services played an integral role in developing the initiative, a bill to allow the state to officially join the initiative is just now working its way through the state Legislature.
“We are dedicating ourselves here in New Hampshire to reducing the pollution that causes global warming and climate change, and joining the Regional Greenhouse Gas Initiative is a major part of that effort,” Governor Lynch said. “Cutting our greenhouse gas pollution is the right thing to do for the long-term health of our citizens, the health of our environment and our economy.”