Carbon: Getting Cheaper

Friday, June 19, 2009

Since last year, the ten states in the Northeast Regional Greenhouse Gas Initiative have made power plants bid for the right to pollute. This initiative is considered a model for a national cap-and-trade system to reduce greenhouse gases, currently under consideration in Congress.

Unfortunately, the results of this week's auction for allowances suggest demand is weakening, not growing. The dollar figures below represent the cost to emit one ton of carbon dioxide:

Auction 4, 6/17/2009 - $3.23

Auction 3, 3/18/2008 - $3.51

Auction 2, 12/17/2008 - $3.38

Auction 1, 9/25/2008 - $3.07

Columbia University's Geoff Heal says CO2 would have to hit at least $10 to really force power plants to make changes in how they generate electricity. Click here for more on the debate among economists over cap-and-trade.


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