Prices for CO2 emission allowances in the Regional Greenhouse Gas Initiative (RGGI), the first mandatory cap-and-trade program for greenhouse gas (GHG) emissions, covering the nine states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont (United States), reached a record low in the last auction (March 2017), at US$3 per short ton of CO2. This is their lower level since early 2014.
This low level is linked to a decreasing trend in CO2 emissions from the power sector in the participating states. The RGGI was initially intended to cut CO2 emissions in the participating states by 10% from their 2009 allowances by 2018, but soaring gas-fired and renewable power generation significantly reduced regional CO2 emission levels, which fell below the original RGGI cap; the cap was then reduced by 45% compared to 2009 level in 2014. Relatively low demand for RGGI allowances resulted in a downward trend in clearing prices since early 2016.
A 36th auction for CO2 emission allowances will be held on 7 June 2017. The minimum allowance price (reserve price) will be set at US$2.15/tCO2, up from US$2.10/tCO2 in 2016.
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