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September 21, 2017

After slide, prices tick up in latest RGGI auction

By Matt Pilon

After participating states in the Regional Greenhouse Gas Initiative proposed changes to beef up the program over the coming decade, the prices of carbon allowances rose in the latest RGGI auction.

More than 14 million allowances sold at a clearing price of $4.35 in RGGI’s 37th quarterly auction, generating $62.5 million for participating states. The clearing price was up sequentially by 72 percent, but down slightly from a year ago.

Prices have been on a downward slide since early last year.

The Acadia Center said this month that the auction results are a good sign that recently proposed changes have sent a signal to power plant RGGI participants.

“This is an initial indication that the market expects the program to be stronger in the future,” Acadia said.

Among the proposed changes to RGGI rules over the 2020-2030 decade is a 30 percent reduction of the program’s emissions cap, which means power plants will have to pollute less or pay more to pollute.

While the latest auction may indicate positive momentum for RGGI advocates, a budget passed last week by both of Connecticut's legislative chambers would divert $20 million in RGGI proceeds to the general fund. Gov. Dannel Malloy has said he will veto the budget.

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