Officials with the Northeast’s regional carbon-trading program run by 10 mostly blue states said Friday they may change the program as it threatens to increase energy costs.
The Friday announcement from the Regional Greenhouse Gas Initiative comes after POLITICO reported on rising prices in the secondary market for emissions allowances and potential impacts to electricity costs in the region. Virginia is gearing up to enter the program later this year, which drove some of the increase.
“RGGI has a long history of stability,” the statement attributed to participating RGGI states says. “Regular program reviews have made adjustments to align the program with policy objectives of a reliable, affordable, and clean electricity supply. A sustained period of elevated auction prices would not meet these objectives and may require renewed consideration of improvements.”
In response to RGGI’s statement, the price for allowances on the secondary market dropped dramatically. Prices, which had been as high as $58 per ton of carbon dioxide in recent days, fell from $45 to $37 on Friday morning.
