Recent Developments in Greenhouse Gas Regulation
The first auction of carbon emission allowances by the Regional Greenhouse Gas Initiative (RGGI) in the northeastern U.S. generated four times as many bids as there were credits available. This resulted in an initial allowance price of $3.07 per allowance, well above the floor of $1.86 set by RGGI. One allowance is the right to emit one metric ton of carbon dioxide.
The funds raised were distributed to several RGGI member states to be spent on energy related needs; for example, Massachussets intends to spend its share on energy efficiency programs to help individuals and cities with winter energy costs. The next RGGI auction is scheduled for December 17.
Additionally, the Western Climate Initiative (WCI) recently released its final design proposal for a greenhouse gas (GHG) cap-and-trade program. The proposal recommends that the first emitters of GHGs to become subject to the program starting in 2012, with other emitters phased in over time. Unlike RGGI, which has opted for region-wide auctions, the WCI leaves it largely to individual states and provinces to decide how to distribute allowances within the state. Check back tomorrow to find out why the WCI proposal penalizes states, like Oregon, that have taken the lead on carbon reductions.
Post authored by David J. Petersen, partner practicing in the Sustainability and Real Estate and Land Use Groups.
