By William Opalka

Carbon dioxide allowance prices dropped 22% at the 34th Regional Greenhouse Gas Initiative auction on Wednesday, renewing calls from environmentalists to tighten emission limits in the nine-state compact.

Nearly 14.8 million allowances were sold at a clearing price of $3.55, down from the $4.54 they netted in September in the last quarterly auction. (See Md. Balks at Proposed Emission Cuts as RGGI States Ponder Future.)

Carbon prices have flattened out as the program’s success in limiting emissions has led to an oversupply of emission credits, advocates say. Prices are 53% lower than they were a year ago. Last week’s clearing price is the lowest since December 2013, when 38.3 million allowances cleared at $3.

RGGI is now undergoing its quadrennial Program Review, which will map out 2020 and beyond.

“We now have eight years of experience demonstrating that the electric sector can achieve ambitious emissions reductions at low costs; it’s time for that experience to be reflected in ambitious reforms,” Peter Shattuck, director of the Acadia Center’s Clean Energy Initiative, said in a statement. “The states must use the Program Review to establish more stringent cap levels through 2030 and to implement program design elements that account for the continuing decline in emissions.”

Currently, RGGI states have agreed to reduce the cap on emissions by 2.5% annually, with many stakeholders advocating those reductions should be accelerated to 5% annually.

“The elements that made RGGI such a successful program at its inception are just as relevant today,” Katie Dykes, chair of the Connecticut Public Utilities Regulatory Authority and chair of the RGGI Board of Directors, said in a statement. “The use of a market-based system to cap emissions allows for the most cost-effective reductions. And the auctioning of allowances and the reinvestment of auction proceeds provides benefits for consumers while locking in emissions reductions. The program’s flexibility allows it to adapt to changing circumstances and support the goals of nine states across a diverse region.”

The sale netted about $52.5 million for the nine member states’ clean energy and energy efficiency programs. RGGI auctions have raised about $2.6 billion since their inception in 2008.