RGGI Cap And Trade To Go Online Sept. 10

by | May 6, 2008

rggi6.jpgThe Regional Greenhouse Gas Initiative (RGGI) expects to go online September 10, News.com reports. The blind online auction will allow power generators to compete for the cheapest price for pollution allowances.

RGGI, in which power generators in 10 states in the Northeastern U.S. must participate, is a cap-and-trade system for carbon where power generators can purchase allowances to emit a certain amount of carbon dioxide.

The market-based mechanism, which draws from a successful U.S.-devised system to cut down on power plant emissions that cause acid rain, is meant to be a more efficient and flexible alternative to government-set limits and more politically palatable than a straight carbon tax.

World Energy, which will write the software that utilities will need to use, already has a business operating energy markets where electricity purchasers in deregulated markets buy contracts from suppliers.

The first ever U.S. regional carbon compliance trades earlier this year were in the range of $5 – $10 per ton -much higher than the official price estimate of $2.32 per ton.

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