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N.Y. power plants pay record-high price for greenhouse gas credits
Source: By Brian Nearing, Albany Times Union • Posted: Thursday, March 13, 2014
RGGI — which began in 2009 under former Republican Gov. George Pataki — is the country’s first state-level greenhouse gas cap-and-trade program, requiring power plants to purchase state-issued permits to emit carbon dioxide.A credit auction last week was the first since the states decreased the amount of available credits by 45 percent, beginning this year. The price for a credit — which allows the release of 1 ton of greenhouse gas — increased to $4.After the credit reduction was announced, prices ranged from $2.80 to $3.21 in four of last year’s auctions. From 2010 to 2012, credits could be purchased for the minimum-allowed price of $1.89, and millions of tons of credits were not sold. The reason, according to critics, was that the number of credits was initially too high for what plant owners would need to cover decreasing emissions.
But the program supporters said the new price shows that last year’s measures by New York and other states to reduce an overabundance of pollution credits are working.
“This increase in credit prices shows that RGGI is working after reforms were put in place,” said Conor Bambrick, air and energy director at Environmental Advocates of New York, an Albany-based environmental lobbying group.
One such measure set aside credits to be made available once prices reached a certain level. And because the auction hit the $4 mark, 5 million credits were released — all of which were then purchased by investors, depleting this year’s supply.
“I think this price is going to be the new normal for RGGI,” Bambrick said (Brian Nearing, Albany Times Union, March 10).