Maryland earned nearly $16.4 million last week in the nation's first mandatory auction of rights for power plants to release climate-changing pollution, state officials reported yesterday. Most of the proceeds will go toward promoting energy efficiency among the state's electricity consumers and for providing some relief from soaring power bills.
"It couldn't have gone any better," Shari T. Wilson, state secretary of the environment, said of Thursday's auction of allowances permitting power plants to emit carbon dioxide. The auction results were "basically on the money with the estimates we had been relying on," she said.
In all, more than $38.5 million was raised by the auction of 12.5 million tons' worth of carbon dioxide allowances from Maryland and other states participating in the Regional Greenhouse Gas Initiative. The other states were Connecticut, Maine, Massachusetts, Rhode Island and Vermont. Maryland had put up the largest share of allowances for auction. Each allowance permits the holder to release 1 ton of carbon dioxide into the air.
A buildup of carbon dioxide, largely from burning fossil fuels, is the leading cause of warming global temperatures, climate scientists have said. Maryland and nine other states in the Northeast and Mid-Atlantic have banded together to use market pressures to cap and then reduce previously unregulated emissions of the gas from power plants. States in the West and Midwest are considering similar regional efforts, while Congress weighs national legislation.
Under the "cap and trade" system, states limit the amount of the gas that can be emitted by power plants within their borders. Each utility must acquire enough allowances to cover its plants' emissions, either through the auction or by purchasing them from other winning bidders afterward. The cost of paying to pollute is expected to drive utilities to reduce their emissions, or take other steps to reduce carbon dioxide, such as planting trees. The regional initiative involving Maryland aims for a 10 percent reduction in emissions by 2020.
Officials coordinating the regional effort have predicted that the new system could increase electric bills by $1 or so per month, but Maryland officials have suggested consumers' bills could decrease as a result of efficiency efforts.
