Oct. 1, 2008 - The ten-state Regional Greenhouse Gas Initiative (RGGI), which last week launched the first mandatory cap-and-trade program in the U.S., has sold more than $38 million worth of carbon allowances in its first auction.

Demand for the allowances was high, with 59 participants from the energy, financial, and environmental sectors snapping up all 12,565,387 of the available allowances at $3.07 a pop.

“The first RGGI auction has successfully used market forces to set a price on carbon, and this will send a clear market signal to support the investment in clean energy technologies,” says Pete Grannis, chair of RGGI, Inc.

Proceeds from the auction will be distributed to Connecticut, Maine, Maryland, Massachusetts, Rhode Island, and Vermont - the six RGGI states that offered allowances for sale during the first auction. The states say they plan to invest those funds in energy efficiency and renewable energy technologies, as well as programs to benefit energy consumers.

Any CO2 allowances purchased at the first auction can be used by a regulated facility for compliance in any of the RGGI states, even if that state did not offer allowances in the first auction.

The next allowance auction is set for December 17. RGGI intends to hold quarterly auctions during the first RGGI three-year compliance period, which will be from January 1, 2009 to December 31, 2011.