This post is written and contributed by Emily Manley, marketing specialist with The Nature Conservancy in New York.

A dollar won’t get you very far these days. But if you have $3.38 in your pocket, well, you can buy a whole ton of carbon on the RGGI auction block.

RGGI, pronounced “Reggie,” stands for the Regional Greenhouse Gas Initiative, an effort launched by 10 Northeastern and Mid-Atlantic states to create a “cap and trade” program to limit emissions of carbon dioxide.

It works something like this: The RGGI states have set a cap at 188 million tons of CO2 for 233 fossil fuel-burning power plants throughout the region. Each plant’s carbon output has been measured and an individual cap is set proportionally. If they emit more pollution than their cap, they need to buy up enough allowances at auction to cover the overage. If they emit less, they can sell off their extra allowances.

Drawing on other successful cap and trade programs used to reduce emissions responsible for acid rain and smog, and on lessons provided by the EU Emissions Trading Scheme, RGGI incorporates the latest thinking on emissions trading.

The auctions started in 2008; the last one in December saw more than 31 million allowances go at a price tag of $3.38 a piece. The proceeds already at $145 million — will be invested in clean energy projects and climate change adaptation.

But the big question — the 800 tons of CO2 in the room, if you will — is: Will RGGI actually work? 

It remains to be seen (and depends on what your definition of “work” is), but the debate is nothing if not fierce.  Some say the baseline price for a ton of carbon is too low, others claim the caps are set too high.

If you ask me, though, they’re throwing the baby out with the bathwater. No matter what, RGGI has already “worked” by getting policy and industry leaders to sign on to the program and take part in the auctions.

Of course regulating these 233 power plants won’t put a cork in our national — or global — carbon smokestack.  But RGGI could serve as a model for other states, other countries, and politicians, including President Barack Obama, who hope to regulate emissions of gases blamed for warming the planet.

The launch of America’s first carbon market is proof positive that the United States can and will take bold steps to combat climate change.

(Image: Smokestack at an industrial facility. Source: Mark Godfrey/TNC.)

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