NEW YORK — Greenhouse gases went on sale Thursday as 10 Northeastern states held the nation's first auction of pollution credits aimed at curbing global warming.
"It is time really to turn the tide on global warming," said New York Gov. David Paterson, who opened the auction by ringing the ceremonial bell at the New York Mercantile Exchange. "And we hope that we've done this today."
The program puts a price on carbon dioxide pollution, giving power plants a financial incentive to cut emissions.
Auction proceeds will go toward energy conservation and renewable energy programs in each of the 10 participating states: New York, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Rhode Island and Vermont.
The program aims to hold carbon dioxide emissions steady through 2014 and then gradually reduce them; it is widely viewed as a model for future programs nationally and around the globe.
The Northeast effort, called the Regional Greenhouse Gas Initiative, limits the total amount of carbon that power plants in the 10 states can pump out of their smokestacks at the current level — 188-million tons.
Electric power generators must pay for allowances covering the amount of carbon they emit, and the initiative will provide a market-based auction and trading system in which the generators can buy, sell and trade the emissions allowances.
The initiative covers more than 200 fossil fuel power plants, requiring that the owners of those plants pay for the carbon dioxide they emit.
It will gradually reduce carbon emissions by reducing the emissions limit in a series of steps, until it is 10 percent below the current level a decade from now. The companies that don't reduce emissions can buy allowances from companies that have, thereby creating a financial incentive to reduce pollution because the more environmentally friendly plants won't have to buy as many credits and because they can sell any they don't need.
Carbon dioxide trading already exists in Europe. Some carbon dioxide allowances also are being traded in the United States on a voluntary basis through the Chicago Climate Exchange.