Thursday, May 2, 2013

RGGI Report Released: Annual Report on the Market for RGGI CO2 Allowances: 2012

Recently, the Regional Greenhouse Gas Initiative (RGGI), a "market-based regulatory program . . . [designed] to reduce greenhouse gas emissions . . . among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont," released its annual report titled, Annual Report on the Market for RGGI CO2 Allowances: 2012.  According to the press release for the 40-page report available here,
No evidence of anti-competitive conduct has been found in the market for Regional Greenhouse Gas Initiative (RGGI) CO2 allowances, according to the independent market monitor’s 2012 Annual Report on the Market for RGGI CO2 Allowances, released today. The independent market monitor, Potomac Economics, continues to find no material concerns regarding the auction process, barriers to participation in the auctions, competitiveness of the auction results, or in the competitiveness of the secondary market for RGGI allowances.
The report evaluates activity in the market for RGGI CO2 allowances in 2012, focusing on allowance prices, trading and acquisition of allowances in the auctions and secondary market, participation in the market by individual firms, and market monitoring. 
Compliance entities consistently acquired the majority of CO2 allowances in each auction in 2012, purchasing 98 percent of the allowances sold.
According to the independent market monitor, the average auction clearing price was $1.93 in 2012. CO2 allowances have cleared at the reserve price in each auction since September 2010 through December 2012, reflecting the excess supply of first control period allowances.
The price of CO2 allowance transfers in the secondary market were stable and remained close to the auction reserve price of $1.93 throughout 2012. Monthly average prices ranged from a high of $2.01 in February to a low of $1.93 in October.

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