First CO2 Auction
Greens agree that the most politically feasible way to put a price on U.S. carbon pollution is to install a cap-and-trade program. But when American utilities and other major emitters are simply given free permits to emit greenhouse gases, the effect of the carbon cap is dulled. That's why the first carbon auction in the Regional Greenhouse Gas Initiative — a pact by 10 northeastern states to cut carbon emissions jointly — was so important. Utilities in the region bid $38.5 million for the right for emit 12.5 million tons of CO2, generating revenue that the states will be able to put toward climate change action. More important, by forcing utilities to buy emission allowances, the government sends a signal that their carbon caps will have teeth — something to consider when Obama takes his run at national cap-and-trade legislation in 2009.