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Carbon-dioxide emissions allowances in the U.S. Northeast were auctioned for $1.89, the minimum allowable bid, as New Jersey prepared to exit the 10-state regional program, Bloomberg News reported last week.
The quarterly auction sold 27.3 million, or 63 percent, of the available 43 million allowances, the fifth-lowest total since the program began in 2008, the Regional Greenhouse Gas Initiative said on its website.
The results bolster New Jersey’s decision to exit RGGI at the end of the year, said Larry Hajna, a spokesman for the N.J. Department of Environmental Protection. Gov. Chris Christie in May called RGGI “a failure” because permits that were initially projected to cost $20 to $30 never sold for more than $3.51.
“Climate change is real, but RGGI is not working,” Hajna said in an e-mail. “Today’s auction results affirm the fact that supply of allowances continues to outweigh demand.”
The auction, held Dec. 7, generated $51.5 million for the states from power producers. Each allowance gives a company the right to emit one ton of carbon dioxide in a cap-and-trade program that includes the six New England states, New Jersey, New York, Delaware and Maryland.
The program was designed to encourage producers to cut emissions and Christie said the low prices won’t motivate them to change their business practices. Requiring companies to purchase allowances drives up costs for the companies, and ultimately customers, he said.
States use the auction proceeds for renewable energy programs, utility programs, assisting consumers with bills or to pad their general funds. Analysis Group said the 10 states had received $912 million from power companies through September, in a November report. •