NEW YORK - Governor David Paterson Thursday opened the nation’s first-ever auction of carbon dioxide allowances when he rang the ceremonial bell at the New York Mercantile Exchange in Manhattan, and by doing so launched the nation’s most serious initiative yet to reduce emissions of greenhouse gases. New York and nine other Northeast and Mid-Atlantic states have come together to launch the Regional Greenhouse Gas Initiative, a mandatory program that covers more than 200 fossil fuel power plants, requiring the owners of those plants pay for the carbon dioxide they emit into the air.

By putting a price on carbon dioxide pollution through the RGGI auction, power plants will now have a financial incentive to reduce pollution. Proceeds from the auction will go toward energy conservation and renewable energy programs in each of the ten participating states, including: New York, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Rhode Island and Vermont.

“Global warming is the most pressing environmental issue of our time, and unfortunately the federal government has failed to take comprehensive action to address it. But by coming together with nine other states, New York is showing that we can take our own bold action in reducing greenhouse gas emissions,” said Governor Paterson. “With the Regional Greenhouse Gas Initiative, we are attacking global warming in three ways: reducing emissions, fostering energy conservation and stimulating development of a clean energy economy and green jobs.”

Under RGGI, ten states have established a cap or limit on the total amount of carbon dioxide pollution that power plants can emit into the air. Power plants over 25 megawatts that emit carbon dioxide must obtain pollution allowances to do so. These allowances, which are available by auction, give the power plants permission to emit carbon dioxide. The cumulative emissions of all carbon allowances may not exceed the amount set by the cap. Over time, the carbon cap is lowered incrementally, thus bringing down carbon emission levels.