A first crack at pricing carbon in the U.S.

Posted by CITIZEN POWER ALLIANCE at 7:59 AM

The first regulated carbon market in the U.S. will take its cue from eBay.

The Regional Greenhouse Gas Initiative (RGGI, pronounced "Reggie") is scheduled to go online September 10. It's a cap-and-trade system for carbon that electric power generators in 10 Northeast states need to participate in.

An online auction company called World Energy won the bid to write the software that utilities will need to use.

I spoke with World Energy Solutions to get a feel for the mechanics behind carbon trading at RGGI. In a nutshell, it's a blind online auction where power generators are competing for the cheapest price, in this case, a permit to pollute.

World Energy Solutions already has a business operating energy markets where electricity purchasers in deregulated markets buy contracts from suppliers. For example, a handful of representatives from power producers could compete during a half-hour-long online auction for a municipality's planned power purchases.

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