For Release: Friday, September 11, 2009
Groundbreaking Carbon Market Reaches One-Year Milestone
Latest Auction Nets $27.4 Million for New York as State Advances Governor's Clean Energy Agenda
State Environmental Conservation Commissioner Pete Grannis today hailed the success of New York's participation in the most recent sale of carbon dioxide (CO2) pollution allowances - noting that the pioneering cap-and-trade system for greenhouse gases has now reached its one-year milestone. Wednesday's auction, the fifth held by the 10 states participating in the Regional Greenhouse Gas Initiative (RGGI), generated more than $66.3 million to invest in the clean energy economy. New York's share of the proceeds is approximately $27.4 million.
All 28.4 million allowances for the 2009 vintage sold at a clearing price of $2.19 per allowance in Wednesday's auction. In a parallel offering, the RGGI states also auctioned allowances for a three-year compliance period that begins in 2012. The 2.2 million "2012 vintage" allowances sold for $1.87 per allowance. New York sold 11,861,849 of the 2009 vintage allowances and 776,385 of the 2012 vintage.
Since September 2008, more than 100 bidders -- including electric utilities, manufacturers, financial institutions, environmental groups, and individuals -- have participated in the RGGI auctions for CO2 allowances. Trading volumes on national, regulated exchanges now match volumes in other established carbon markets, such as the Kyoto Clean Development Mechanism. And every major power plant in the 10-state RGGI region now reports its CO2 emissions to the public on quarterly basis.
Overall, the 10 RGGI states have now auctioned more than 140 million allowances and raised a total of $432.8 million since the first RGGI auction in September 2008. New York's share is approximately $155.3 million; the proceeds will go to energy efficiency, clean and renewable energy technologies and strategies to reduce greenhouse gases and create green jobs.
"Once again the RGGI auction was a success, with demand running much higher than supply and compliance entities getting most of the allowances," said Pete Grannis, Commissioner of the New York Department of Environmental Conservation and Chairman of the Regional Greenhouse Gas Initiative, Inc. Board of Directors. "In its successful first year, RGGI has established a market for carbon, demonstrated that auctions are an efficient and effective way to allocate CO2 allowances and enabled the states to return millions of dollars in benefits to consumers through investment in energy savings and clean energy."
Francis J. Murray, Jr., President and CEO of NYSERDA, said: "RGGI is a prime example of the state's commitment to address global warming. We will continue to work with our partners to develop and implement programs that will reduce greenhouse gas emissions in New York, while creating thousands of clean energy jobs. Doing so will complement the efforts of Governor Paterson's aggressive clean energy agenda, which includes support of renewable power, energy efficiency, workforce development, and advancing high-tech industries in New York State."
Garry Brown, Chairman of the New York State Public Service Commission, said: "The money raised as a result of this important auction will help in the important task of making New York more energy efficient. In addition, the money will help support a cleaner environment and develop more renewable resources. I congratulate Governor Paterson for making clean energy an important part of his economic development strategy. As a result of the Governor's policies, we are on our way to help create thousands of clean energy jobs and strengthen the state's economy."
New York's participation in RGGI is part of Governor David A. Paterson's aggressive clean energy agenda. New York has developed an operating plan to use RGGI proceeds to fund energy efficiency and renewable energy programs to help families, businesses and local governments reduce their energy bills while investing in the clean energy technologies that will create jobs and lower the state's carbon footprint. Other components include the "45 x 15" energy policy and the Renewable Portfolio Standard, which give incentives to develop large-scale renewable generating sources (such as wind, hydro-electric and biomass) and to improve energy efficiency in residential, commercial and industrial sectors.
About the Regional Greenhouse Gas Initiative
The 10 Northeast and Mid-Atlantic states participating in RGGI (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Hampshire, New York, Rhode Island and Vermont) have designed the first market-based, mandatory cap-and-trade program in the U.S. to reduce greenhouse gas emissions. Power sector CO2 emissions are capped at current levels through 2014. The cap will then be reduced by 2.5 percent in each of the four years 2015 through 2018, for a total reduction of 10 percent.
A CO2 allowance represents a limited authorization to emit one ton of CO2, as issued by a respective participating state. A regulated power plant must hold CO2 allowances equal to its emissions to demonstrate compliance at the end of each three-year compliance period. The first compliance period for fossil fuel-fired electric generators under the 10-state CO2 Budget Trading Programs took effect on Jan. 1, 2009, and extends through Dec. 31, 2011. For more information about RGGI turn to: www.rggi.org
About Regional Greenhouse Gas Initiative, Inc.
RGGI, Inc. was created in September 2007 to provide technical and administrative services to the states participating in the Regional Greenhouse Gas Initiative. RGGI, Inc. is a 501(c) 3 nonprofit organization. For more information about RGGI, Inc. please visit: www.rggi.org/rggi
