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February 28, 2007

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Global Climate Change Digest
A Guide to Information on Greenhouse Gases and Ozone Depletion
Published July 1988 through June 1999

EPA Acid Rain Auction (JUNE 1999)

Item #d99jun42

EPA press release R-32 on Mar. 26, 1999, and the Apr. 5 issue of Mining Week announced that the seventh annual acid rain allowance auction had been conducted by the Chicago Board of Trade (CBOT) and resulted in proceeds of more than $53.5 million. The auction gives power plants, brokers, and private citizens the chance to buy and sell SO2 allowances, each of which gives a power plant the right to emit one ton of SO2 in a designated year or any year thereafter. This SO2 trading program is in its fifth year. Two electronic sealed-bid auctions were held March 22 in Chicago: a “spot” auction that sold allowances first useable in 1999 and a “seven-year advance” auction that sold allowances first useable in 2006. There were 152,510 allowances offered in the spot auction and 125,000 allowances in the seven-year advance auction. All allowances available were sold. CBOT received 77 bids for the spot auction, of which 27 were successful, ranging from $200.55 to $230.00. In addition, 10 allowances that were offered by a private party were sold at $200.55. CBOT received 32 bids for the seven-year advance auction, of which 21 were successful, ranging from $167.55 to $220.51. EPA is also helping launch other trading programs that feature a cap on emissions of nitrogen oxides.