BOSTON — Price declines in the latest Regional Greenhouse Gas Initiative (RGGI) auction demonstrate the need to address an oversupply of allowances caused by faster-than-anticipated emissions declines. In the latest auction, all 14,791,315 available allowances were sold at a clearing price of $3.55, generating $52,509,168 in revenue for reinvestment. This brings the program’s total revenue to $2.64 billion-most of which has been used to fund energy efficiency and other consumer benefit programs. The Auction 34 clearing price is 22% lower than the previous auction and 53% lower than the clearing price from one year ago. This marks the lowest auction clearing price since December of 2013 and the least amount of auction revenue raised at a single auction since December of 2012.
“State leadership to combat climate change has never been more important,” said Acadia Center President, Daniel Sosland. “Low prices and declining emissions confirm that now is the time for RGGI states to strengthen the program and continue leading the nation on climate.”
“Declining RGGI prices are occurring alongside declining emissions,” said Jordan Stutt, Policy Analyst with Acadia Center. “Electric sector carbon emissions through the first three quarters of 2016 were 5% below the same period last year — the lowest emissions level in the program’s history, and this is poised to be the eighth consecutive year in which emissions fall below the RGGI cap.”
With the market oversupplied, the ongoing 2016 Program Review offers the states an opportunity to make necessary reforms. “We now have eight years of experience demonstrating that the electric sector can achieve ambitious emissions reductions at low costs; it’s time for that experience to be reflected in ambitious reforms,” said Peter Shattuck, Director of Acadia Center’s Clean Energy Initiative. “The states must use the Program Review to establish more stringent cap levels through 2030 and to implement program design elements that account for the continuing decline in emissions.”
Information on RGGI’s performance to date and necessary reforms through the 2016 Program Review are described in Acadia Center’s recent RGGI Status Report:
Additional information on the benefits of RGGI can be found at https://www.cleanenergyeconomy.us/
The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory, market-based effort in the United States to reduce greenhouse gas emissions. Nine northeastern and mid-Atlantic states reduce CO2 emissions by setting an overall limit on emissions “allowances,” which permit power plants to dispose of CO2 in the atmosphere. States sell allowances through auctions and invest proceeds in consumer benefit programs: energy efficiency, renewable energy, and other programs.
The official RGGI web site is: www.rggi.org