Last week ten states, joining together as the Regional Greenhouse Gas Initiative, or RGGI, hosted the first US auction of carbon credits that netted the states $39 million between them to invest in renewable energy, in a cap and trade auction that will now be held quarterly. An example where we can see that this has already happened is in California. Zero emissions vehicles requirements in CARB legislation in the 9o's spawned a talent pool of engineers and an entire new startup electric car industry in California (with names such as Tesla, Phoenix, ZAP, Miles and AC Propulsion)and provided the initial boost that propelled Ford, Toyota and GM into the electric car industry, by requiring auto companies make at least some zero emissions vehicles, in order to sell in the state.
Maryland walked away with $16 million and Massachusetts $13 million, to invest in greening their states. The full group participating includes Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont.
This regional auction of allowances will enable the participating states to reduce emissions from carbon sources in the state, and have funds to invest in renewable energy instead, by selling emission allowances through auctions and investing the proceeds in consumer benefits: energy efficiency, renewable energy, and other clean energy technologies, spurring innovation in the clean energy economy and creating green jobs in each state.
This first time, each credit sold for a mere $3 a ton. Most experts consider $40 -$100 a ton is needed to really switch us over to the post-carbon economy. The cost of the carbon capture at the Vattenfall plant in Germany that recently installed the first CCS was estimated at approximately €20 per tonne.
The states participating in RGGI agreed on an initial regional cap on carbon emissions, 188 million tons per year, that will be enforced through 2014. Starting in 2015, the cap will be reduced 2.5 percent each year.
The two hundred and thirty three power plants in the ten states are required to pay for each ton of carbon dioxide they emit. The requirement is part of pollution reduction legislation already passed among the 10 states that caps the amount of carbon dioxide power plants are allowed to emit.
Alternatively, the power plant can find a way to reduce their pollution. One such option would be utilizing combined cycle heat and power technology, creating twice the energy on a per ton of carbon basis. CS technology is among the efficiency measures funded under the renewable energy incentives in the Federal legislation finally signed into law last week attached to the bailout.
State-based legislative innovation like the Regional Greenhouse Gas Initiative has historically led the nation in jump-starting the green industrial revolution.
While the big auto companies fought that legislation, ultimately succeeding in defeating it, yet in different ways it has led to the zero emissions vehicles from these three that could revitalize the US auto industry here, if it can only make it through current problems created by lack of foresight.
Ford's THI!NK, developed in response to the legislation, is about to return to these shores, albeit now under Norwegian ownership.
Regional clean energy legislation can thus have very far reaching effects.
So it will be interesting to see how the big winners invest in renewable energy. Boston's MIT, home of a great wealth of innovative ideas in need of startup funding is in Massachusetts and Maryland's ideas include helping low-income families weatherize their houses and providing upfront funding for home solar panels.
"This is the moment we've been waiting for," said Brad Heavner of Environment Maryland, who pushed lawmakers to join RGGI. "Everyone wants more clean energy, and there's a widespread acceptance that it's a good thing to do to put public resources into it. But we've never been able to come up with the money."
Two Teslas captured in Silicon valley by venture capitalist Steve Jurvetson
An example where we can see that this has already happened is in California. Zero emissions vehicles requirements in CARB legislation in the 9o's spawned a talent pool of engineers and an entire new startup electric car industry in California (with names such as Tesla, Phoenix, ZAP, Miles and AC Propulsion)and provided the initial boost that propelled Ford, Toyota and GM into the electric car industry, by requiring auto companies make at least some zero emissions vehicles, in order to sell in the state.