The cost to emit carbon dioxide in the U.S. Northeast rose by one-third this month after the region’s cap-and-trade program revised its rules to cut the supply of permits, Bloomberg News reported.
Regional Greenhouse Gas Initiative Inc. auctioned 23.4 million allowances for $4 each at its March event, up from $3 in December, according to a statement posted last week on the New York-based nonprofit group’s website. This was the first event under new rules that were announced in February 2013 and took effect this year.
The $4 clearing price is the highest since the group began auctioning allowances in September 2008, and many of the quarterly events failed to exceed the minimum bid. Critics said that indicated that the market wasn’t working, including New Jersey Gov. Chris Christie, who called it a failure when he pulled the state out in 2011. RGGI cut the supply of permits 45 percent this year in an effort to drive up prices.
The sale generated proceeds of about $94 million, compared with $115 million in December when about 63 percent more allowances were sold.
RGGI comprises the six New England states, New York, Delaware and Maryland. •