$38.5 million paid for CO2 permits

The Regional Greenhouse Gas Initiative $38.5 million in its initial auction of pollution permits:

The ten Northeast and Mid-Atlantic states participating in RGGI have designed the first market-based, mandatory cap-and-trade program in the U.S. to reduce greenhouse gas emissions. The states have committed to cap and then reduce the amount of CO2 that power plants in their region are allowed to emit, limiting the region’s total contribution to atmospheric greenhouse gas levels.

Under the RGGI process, the then participating states will stabilize power sector CO2 emissions at the capped level through 2014. The cap will then be reduced by 2.5 percent in each of the four years 2015 through 2018, for a total reduction of 10 percent.

The ten states participating in RGGI are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Hampshire, New York, Rhode Island and Vermont.

Read the entire press release here. The RGGI website is here.

Greg Mankiw argues that a carbon tax is preferred to a cap-and-trade auction.