(LATE ADDITIONS: This report says carbon emissions from power plants in Northeast have fallen 10 percent compared to last year, due to some mix of extra efficiency  and the recession. This very good Christian Science Monitor story compares RGGI and the proposed national system. A big difference: RGGI auctions all its allowances; the national system would, like Europe’s cap-and-trade system, give many of them away as a political sop to lobbyists.)

What will happen to the 10-state Regional Greenhouse Gas Initiative if the U.S. Senate also approves a national cap-and-trade system? (Here’s a Washington Post article about the legislation, which was narrowly OK’d by the U.S. House.) I asked that question a few months ago in preparation for the March RGGI auction, and the official response was that it would take so long for a national system to get set up  that it wouldn’t immediately affect RGGI, which under its current iteration runs through 2012 and then restarts.

The other uncertainty, however, is what a national system would do to RGGI’s price - although I suppose that would depend on whether RGGI allowances can be swapped over to a national system. (If they can’t, there will be a lot of pissed-off utilities!)

The prices in the June auction (seen here) were adequate, at best. The allowances for the 2009 market was OK ($3.23 per ton, down about five percent from March but still above the earliest auction last fall) but the long-term advance allowances, usable after 2012, were dirt cheap, at $2.06, which is barely above the floor price. That doesn’t seem to indicate any confidence that the current system will last past 2012.

Tags: cap-and-trade, RGGI