The first mandatory US inter-state carbon trading system will open on Thursday with the auction of carbon permits to power ­stations. It will be widely watched across the country for lessons in how a nationwide cap-and-trade system could function.

The long-awaited Regional Greenhouse Gas Initiative, or RGGI (pronounced Reggie), places limits on the amount of carbon dioxide that 233 power stations and factories in 10 north-eastern states can emit. Companies will buy, at auction or from each other, permits to cover the amount of carbon dioxide they produce over three years from 2009 to 2011.