Not that it really matters anymore, but there’s a new independent evaluation of RGGI (the carbon cap-and-trade system in the northeast US) by the program’s designated market monitor, Potomac Economics:
…we find no material concerns regarding the auction process, barriers to participation in the auctions, or the competitiveness of the results. Participation in the 2009 vintage offerings has been robust…
…we find no evidence of anti-competitive conduct or barriers that would impede wider participation. Further, we found that the auctions were administered in accordance with the noticed rules and bids received.
We find no evidence of anti-competitive conduct in the secondary market for allowances. Furthermore, it is encouraging that many firms have been active in trading allowances and allowance futures, and that firms have generally purchased quantities of allowances that are consistent with their expected needs.
In other words, cap and trade works. RGGI continues to deliver effective, low-cost carbon reductions with absolutely zero evidence of market manipulation. Same story as always.
It strikes me as something close to a tragedy that hysteria about “gaming the carbon markets” became a shibboleth among a tribe of lefty critics over the last couple of years. In fact, the evidence pretty strongly suggests that well-regulated carbon markets make for a superb climate strategy.