The states participating in the Regional Greenhouse Gas Initiative (RGGI) recently announced that the auctioning of carbon dioxide (CO2) emissions allowances in North America is off to a strong start. All of the 12,565,387 allowances offered for sale on September 25, 2008 were sold at a clearing price of $ 3.07 per allowance.

RGGI, Inc. reported that 59 participants from the energy, financial and environmental sectors took part in the first-in-the-nation auction, starting the first of many CO2 allowance auctions. It is reported that demands for the allowances appeared to have been strong with a total of quantity of 51,761,000 allowances demanded which was four times available supply for this first auction.

The $38,575,783 in proceeds produced from the auction will be distributed to Connecticut, Maine, Maryland, Massachusetts, Rhode Island and Vermont, the six RGGI states that offered allowances for sale during the first auction. The states are investing those funds in energy efficiency and renewable energy technologies, and programs to benefit energy consumers.

Any CO2 allowances purchased at the first auction can be used by a regulated facility for compliance in any of the RGGI states, even if that state did not offer allowances in the first auction.

The next allowance auction is set for December 17, 2008. These early auctions, combined with the others being held in the first compliance period, will ensure an ample opportunity for bidders to obtain the allowances they will need for compliance across the entire 10-state region. RGGI intends to hold quarterly auctions during the first RGGI three-year compliance period, which will be from January 1, 2009 to December 31, 2011.