Cost of carbon: $3.07 a ton, say Reggie bidders

The nation’s first cap-and-trade greenhouse gas auction sold the right to pump carbon dioxide into the atmosphere at $3.07 a ton, the Associated Press is reporting.

Before the auction there was some concern, as the Fueling Station previously reported, that the auction by the organization nicknamed "Reggie" would run into trouble because the price of carbon futures had tumbled in the past three months. It turns out that demand remained strong.

"The results of Thursday’s sealed bid, online auction by the Regional Greenhouse Gas Initiative were released today," the AP says. "All 12.5-million allowances were sold, and 59 bidders representing energy, financial and environmental interests participated."

Demand was so heavy, in fact, that an RGGI press release says that bidders wanted four times as many credits as were available. However, the auction price wound up "lower than the $4.50 to $4 per ton that contracts on the permits had been fetching in recent weeks on futures markets," Reuters is reporting.

Still, the AP notes,"Thursday’s sale brought in $38.5-million, which will be distributed to Connecticut, Maine, Maryland, Massachusetts, Rhode Island and Vermont. The states plan to invest the funds in energy efficient and renewable technologies as well as programs to benefit utility rate payers."

Four states in the Reggie consortium -- one of them New York -- failed to complete their cap-and-trade rules in time to participate in last week's auction. They are expected to join in the next auction, slated for Dec. 17.

--Craig Pittman, Times Staff Writer

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