Nation's first mandatory carbon cap-and-trade ramps up in Massachusetts

By Beth Daley, Globe Staff

By now, you've probably run across RGGI, or the Regional Greenhouse Gas Initiative, in the news. For those who have forgotten, officials from ten states have spent more than three years designing the nation's first market-based, mandatory cap-and-trade program in the U.S. to reduce greenhouse gases.

And today, it went live. Sort of.

Bidders who plan on buying carbon dioxide allowances - essentially the right to emit the heat-trapping gas from power plants - began a 60-day formal bid preparation before the September 25 auction.

RGGI is designed to cap power plant emissions in 2009 and then gradually reduce them by 10 percent over the next decade. Power plants will have to buy emission allowances from states for every ton of carbon dioxide they emit, with plants that emit larger amounts having to buy more allowances than cleaner ones.

The number of available allowances will decrease as the overall cap is lowered, raising their price and, with hope, encouraging plants to invest in clean technologies to avoid the higher cost of polluting.

For more information go to http://www.rggi.org/docs/press_release_7_24_08_final.pdf