RGGI: The Hot New Investment Tip?

In last week's auction held by the Regional Greenhouse Gas Initiative (RGGI), not only did the allowances sell at $3 — the highest clearing price in four years, other than the June auction's $3.21 — but a majority of the allowances sold to investors, rather than the large generators of electricity whose carbon dioxide emissions are regulated under RGGI.  Fifty-seven percent of the allowances were bought by commodities firms, traders, and other third parties, marking the first time in RGGI history that an auction garnered such interest and participation from these outside entities. By comparison, 81% of the allowances sold in the first 22 RGGI auctions went to compliance entities (power generators regulated under RGGI and their affiliates).