Regional Greenhouse Gas Initiative Launches Cap and Trade

Carbon now has more than just an environmental price, it has a dollar value.  At the end of September, the Regional Greenhouse Gas Initiative (RGGI) began auctioning off 12.6 million “allowances” for carbon dioxide equivalent in 10 Northeastern and Mid-Atlantic states. Designed to incentivize a change to a low carbon economy, a “cap and trade” system involves setting a limit (or cap) on the total emissions allowed before you are required to either improve operations enough to remain within the cap, or purchase carbon credits from companies who haven’t reached the cap. Basically, the buyer of these credits is paying for the pollution they are causing above the cap, while the seller is being rewarded for having reduced their emissions by more than was allowed. RGGI aims to set the total cap at 188 million tons annually between 2009 and 2014. After that, it would drop 2.5 percent each year through 2018 a total reduction of 10 percent. Initiatives like these will begin to force American business owners to incorporate the cost of carbon into budgets and reconsider processes which generate carbon dioxide if they don’t have a way to capture or mitigate their emissions. >>Read More.