US auctions first CO2 pollution credits

Ten north-eastern states held the United States’ first auction of carbon pollution credits, aimed at reducing global warming, the Associated Press reported. Proceeds from the auction will go toward funding renewable energy and conservation programmes.

Held in New York City, the auction was part of the Regional Greenhouse Gas Initiative. The programme aims to hold emissions by fossil-fuel power plants at their current level until 2014 and then gradually reduce them to 10% below the current level by 2018.

Under the initiative, power plants are required to purchase sufficient credits to cover the amount of carbon they emit. Plants are then able to buy, sell and trade credits on a free-market basis. By putting a price on pollution, the programme provides an economic incentive to reduce pollution.

“It’s historic,” said Lance Pierce, climate programme director of the Union of Concerned Scientists. “The carbon markets have arrived in the United States. And carbon markets, if designed correctly, hold the promise for development of cleaner energy … and reductions in global-warming pollution that benefit consumers, businesses and the environment, as well.”

See full story