(Host) An auction designed to harness the free market to reduce greenhouses gases has brought the state $620,000 dollars.
The proceeds of the auction will be used to help make homes and businesses more fuel efficient.
State officials are praising the auction as a groundbreaking way to cut pollution.
VPR’s John Dillon reports:
(Dillon) The auction was held last week under the auspices of the Regional Greenhouse Gas Initiative. This is basically an agreement among 10 northeast states to cut greenhouses gases by 10 percent by 2018.
So in order to eventually comply with those limits, electric utilities in the region will have to buy "allowances" for each ton of carbon dioxide they produce. Last week, the first set of these allowances was auctioned off.
Natural Resources Secretary George Crombie says the auction applies market forces to control pollution.
(Crombie1) There’ll be a financial mechanism and incentive to invest in renewables and to lower their pollution. I think what we’re going to see in the future is the more you pollute the more you pay and the less you pollute the less you pay.
(Dillon) Vermont got $620,000 from the sale. Vermont has another 1 million tons of carbon to sell. If the same price is reached in other auctions, the state could earn almost $4 million a year.
The state will invest the money in weatherization and other programs aimed at reducing the use of heating fuels.
Richard Sedano is a former Public Service Comissioner who now works for the Regulatory Assistance Project in Montpelier.
(Sedano1) We’re all talking and thinking about how expensive fuel oil and propane are this winter and what can we do about it, and what can we do about it? Well, what homeowners can do about it now is that they very soon will be able to access services from the Department of Public Service and Efficiency Vermont in ways that they couldn’t before. And those services will funded by these revenues from RGGI.
(Dillon) The auction system is based on a concept known and cap and trade. That means the amount of pollution that can be produced is capped, and the right to emit that pollutant can be bought and sold.
European countries have used this market mechanism to control greenhouse gases. But this is the first time a mandatory cap and trade approach has been used to cut CO2 emissions in
North America.
For VPR News, I’m John Dillon.