WASHINGTON (Reuters) - Ten eastern states in a greenhouse gas reduction program have invested more than half of their carbon permit auction proceeds, or about $404 million, in energy efficiency, the group said on Monday.
New York, Massachusetts, Maryland and seven other states on the East Coast belong to the Regional Greenhouse Gas Initiative, or RGGI, which aims to trim carbon dioxide output from the area’s power plants 10 percent by the end of 2018.
To meet that goal, RGGI holds quarterly auctions of permits that let the plants emit carbon dioxide. Some investors also buy the credits in the cap-and-trade program, believing their value will rise as RGGI gradually lowers the emissions cap.
Recent auction prices have sunk to less than $2 a short ton, however, as prospects for a national climate market have faded, the tough economy has pushed emissions down, and as plants switched from coal to cleaner-burning natural gas.
Still, since 2008, RGGI auctions have raised nearly $780 million.
“RGGI is helping to improve air quality in Delaware, while also helping make our economy more competitive,” said Collin O’Mara, secretary of Delaware’s Department of Natural Resources and Environmental Control.
About 80 percent of the proceeds have gone to programs that aim to cut energy demand, foster the growth of alternative energy, and to help the poor pay energy bills.
RGGI said in a draft report on Monday (which can be seen at www.rggi.org) that 52 percent of the proceeds have gone to programs to improve energy efficiency, such as replacing boilers and caulking windows at homes and businesses.
It called those programs the most cost-effective tool for reducing emissions of gases blamed for global warming.
About 14 percent of the proceeds went to help poor families with heating bills, and 11 percent went to help speed the deployment of renewable-energy programs.
Not all of the proceeds are going to energy programs. New York and fellow RGGI member New Jersey have recently targeted tens of millions of dollars of their proceeds to help ease huge budget deficits.
Last week, New Hampshire’s House of Representatives voted to pull out of RGGI. The bill will soon be considered by the state’s Senate.
Reporting by Timothy Gardner; Editing by Dale Hudson