While I was filling out my NCAA brackets Environmental Capital was discussing carbon prices

From Environmental Capital:

[The Regional Greenhouse Gas Initiative], the first mandatory scheme to limit carbon emissions in the U.S. to become operational, announced today it will sell the first batch of emissions permits on Sept.10, formally launching the much-awaited program that many see as a possible template for future federal action. California has a law capping emissions, but it hasn’t yet ramped up the trading part.

Unlike the emissions-trading scheme used in Europe, RGGI will sell most of the emissions rights rather than giving them away for free to big industry. For its first auction, RGGI has set a floor price of $1.86 a ton, though it clearly expects power companies and financial middlemen will bid more to secure emissions rights.

A ton of carbon dioxide emissions goes for about $5.25 on the Chicago Climate Exchange. A ton on the European exchanges goes for around $30. Is a ton emitted in the U.S. northeast somehow different from a ton emitted somewhere else?

Actually, yes, says Phil Giudice, treasurer of RGGI, Inc. and chairman of the Massachusets division of energy resources. ICF International, the big consultancy, put a price tag of $2.32 on each ton of carbon in the 10 RGGI states. It based its estimate on weather, what kind of fuel power companies burn, what kind of industry is in the area, and more. That, in turn, set the floor price for the auction.