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List of State Officials - Martin O'Malley, Governor; Anthony Brown, Lt. Governor; Shari T. Wilson, MDE Secretary 

Volume III, Number 7

 October 2008

eMDE is a monthly publication of the Maryland Department of the Environment. It covers articles on current environmental issues and events in the state. 

Maryland Benefits from Nation’s First Auction of Carbon Dioxide Emission Allowances

By Kathleen Perry, Air and Radiation Management Administration

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On September 25, 2008, state leaders from Maryland, Massachusetts, New Jersey and New York gathered in New York for the nation’s first ever auction of carbon dioxide allowances. These States are members of the Regional Greenhouse Gas Initiative (RGGI), a cooperative effort by ten northeastern and Mid-Atlantic states to reduce carbon dioxide (CO2) emissions from electricity generating plants. In the United States, RGGI is the first program of its kind, a multi-state emissions cap and trade program with a market-based emissions trading system.

RGGI is designed to reduce global warming emissions from electricity generation in two ways. First, a cap is placed on the largest sources of greenhouse gas emissions: electricity generators. Emissions from power producers will be capped at 2009 levels beginning in 2009 through 2014. The cap will then be reduced by 10 percent between 2015 and 2018. Second, by requiring electricity generators to pay for each ton of carbon dioxide they produce, the RGGI program will generate an unprecedented level of investment in energy efficiency measures to help us lower energy consumption.

What do RGGI Auctions Mean for Consumers?

Generators included in the RGGI program need to purchase enough allowances through auctions to cover the tons of CO2 that they emit. Since electric generators factor the cost of allowances into power prices whether the allowances are distributed free or for a charge, the ratepayer benefits when allowances are auctioned because the revenue can then be invested on their behalf to reduce energy demand. Thus, the program allows participating states to decrease their carbon footprints while ensuring reasonable energy bills for consumers.

During the first auction, Connecticut, Maine, Maryland, Massachusetts, Rhode Island and Vermont sold allowances at a closing price of $3.07 per ton, raising a combined $38 million in revenues that can now be invested in energy efficiency programs, renewable energy stimulus efforts and other programs to benefit consumers.

As a result of Maryland’s auction proceeds, the State of Maryland will invest $16.4 million in programs to promote cleaner energy sources, energy efficiency and conservation, and provide rate relief for low and moderate income households—all of which will go a long way to fight climate change and lower our electricity.

Click here for more information. The next auction is scheduled for December 17, 2008.

Read more about RGGI in MDE's EnviroMatters


©2008 Copyright MDE

Editorial Board
Maryland Department of the Environment
1800 Washington Boulevard, Baltimore, MD 21230