Economic Recession -> Lower CO2 emissions -> Lower RGGI funds.

New Hampshire will have fewer resources to reduce greenhouse gases.

The state had expected about $18 million per year would replenish the fund, coming from the quarterly auctions on emissions credits, the cost of which will ultimately be borne by electric ratepayers throughout the Northeast.  At current auction prices the state is likely to take in only $4 million per quarter, or about $16 million for this year.  The recession is lowering the demand for electric power, and as a result the demand for carbon emissions credits.

On July 15 the Executive Council approved $5.3 million in projects funded by the Regional Greenhouse Gas Initiative (RGGI), aimed at reducing CO2 emissions in New Hampshire.  The two largest projects were to award funds in the amount of $2,000,000 to the Business Finance Authority of NH, to create a revolving loan fund for NH Businesses, and  $1,372,028 to the NH Retail Merchants Association, to establish an energy efficiency program for commercial buildings.

The chart below shows the RGGI quarterly auction price for carbon allowances (per ton) for the 2009-2011 auction year, and the 2012-2015 auction year.  In the most recent RGGI auction the price of a carbon allowance for the period 2009 to 2011 declined by about 8 percent.

 

Chart data from RGGI.org

A recent analysis by Point Carbon estimated that 2008 CO2 emissions in the RGGI area will be 156.2 million short tons, about 32 million tons (17 percent) below the cap.  High oil prices and the economic recession were cited as the main causes for the net reduction in CO2 emissions in the region.  Recessions are apparently good for the environment.

RGGI has also been auctioning allowances for the 2012-2015 period, which have commanded a much lower price than for the 2009-2011 period.  The lower price is not surprising for two reasons – first the concern that the Waxman-Markey energy bill that recently passed the House will supplant RGGI, and second that allowances bought for 2009-2011 can be banked for use in 2012-2015.

 RGGI is a mandatory cap and trade auction of carbon dioxide emission allowances for a ten state area in the Northeast, including New Hampshire

For the next three years RGGI will cap total CO2 from covered sources at 188 million tons per year.  In March 2012 the power producers covered under RGGI will have to produce carbon allowances for every ton of CO2 they have released from 2009 to 2011, so power producers and other groups have an incentive to buy CO2 allowances.

Additional RGGI auctions are scheduled for September 9, 2009 and December 2, 2009

Comments

[global economic recession]

According to me we should take recession as good event, I know that all will disagree with me but I have some explanation on this, we all know that saving money, spending limited money are very much essential points for our financial security but still we don't follow it. Recession is the way by which we all can learn how to save and spend without any tutor for that. For more details on global economic recession refer http://www.prime-targeting.com/wish-you-a-relaxed-global-economic-recession/