The Regional Greenhouse Gas Initiative held their first CO2 permit auction today. At the WSJ Environmental Capital blog, Keith Johnson said RGGI “is more likely to start with a whimper than a bang,” and asks “Will it work?”
RGGI’s first auction today, of about 12.5 million emissions permits, isn’t attracting a lot of interest. For starters, that’s because the program’s overseers allocated more pollution permits than power companies need to meet their obligations. That means there’s no red-hot demand to get permits. At the same time, utilities have three years to start really tightening their belts, so there isn’t a lot of urgency to get emissions credits in the bank.
I can imagine the the program designers were interested in not beginning with a bang. After all, if you toss industry into a pot of boiling water, it will hop right out.