U.S. Northeast Carbon Permits Sell Out Again in Auction
Regional Greenhouse Gas Initiative Inc., the nonprofit that administers the U.S. Northeast’s carbon-emissions program, raised $102.6 million as it sold every available permit for the third consecutive auction.
RGGI sold 38.4 million allowances for $2.67 each at the Sept. 4 event, according to a statement posted today on the New York-based group’s website. The previous quarterly auction, on June 5, generated a record $124.5 million as 38.8 million permits sold for $3.21 each.
Demand has increased since RGGI said in February it would reduce by 45 percent the number of available permits to emit carbon dioxide, starting next year. That’s driving up prices as companies stock up, said Paul Tesoriero, director of environmental trading at Evolution Markets LLC in White Plains, New York.
“There’s still a bullish tone for next year,” Tesoriero said today in an interview. “For the markets to be able to soak in 40 million tons when it was oversupplied, it’s definitely people looking into next year and beyond.”
RGGI has sold every permit in its three quarterly auctions this year. Before the group announced plans to revise the program in February, the allowances hadn’t sold out since March 2011 and prices hadn’t exceeded $2 since March 2010.
Each permit gives a company the right to emit one ton of carbon dioxide in a cap-and-trade initiative that includes the six New England states, New York, Delaware and Maryland. States use the proceeds for renewable-energy and utility programs, assisting consumers with bills or to pad their general funds.
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