The latest auction in the mandatory East Cost greenhouse gas trading market, which California is tracking, produced rock bottom prices. “It can’t go much lower,” warned Evan Ard, Evolution Markets managing director. The second quarter Regional Greenhouse Gas Initiative auction, which involves 10 states, yielded $80.4 million, or $1.88 per ton of carbon dioxide. That price was for allowances covering 2009-2011. The price for the 2012-14 three-year cycle was slightly lower at $1.86 a ton of CO2 equivalent. The market’s pricing floor is $1.84 per ton of carbon dioxide. Projections for carbon prices under a California cap-and-trade market were initially estimated at around $30 a ton. RGGI caps power plant emissions. The ten participating states were allocated emissions, which have been auctioned as a means of meeting the carbon cap at the lowest cost. The low cost does not auger well for California. But Ard said the East Coast carbon cap-and trade system is narrower than the one California is developing. A state cap-and trade market would not be limited to power plant emissions but cover a much broader sector of the economy. There are lessons for California. Under RGGI, the allowances handed out far exceeded emissions. “It was grossly over supplied,” to the tune of 30-40 million allowances, Ard said. In addition, the East Coast, like the West Coast, has seen power demand fall with the economic downturn. California policy makers must decide where to set the cap and how to allocate emissions, Ard noted Participating states use much of the RGGI auction revenue for energy efficiency and renewable energy investments. “As we work to advance legislation at the federal level, the RGGI programs continue to be a model for strong national policy, developing best practices for the implementation of cap-and-trade programs,” stated David Littell, Regional Greenhouse Gas Initiative board chair. Participating states include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Hampshire, New York, Rhode Island, and Vermont.