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U.S. Northeast carbon market emissions drop in 2013

WASHINGTON, Feb 5 (Reuters) - Greenhouse gas emissions fell 6 percent in 2013 in the nine northeast U.S. states that participate in a trading scheme to cut carbon dioxide from power plants, helped by mild temperatures and some use of cleaner energy sources.

Carbon emissions in the Regional Greenhouse Gas Initiative region were down for a third straight year, to 86 million short tons from 92 million tons. Electricity use declined in four of the nine member states, according to the program's emission allowances tracking system.

Power plants covered by RGGI had until Jan. 31 to report their emissions from 2013.

The nine states - Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont - last month approved a change to the program from 2014 that would cap emissions at 91 million tons, a 45 percent reduction from the original cap, to encourage more trading.

The five-year-old cap-and-trade market had been awash in excess carbon permits due to abundant supplies of low-emissions natural gas, improved energy efficiency and a slower-than-expected economic recovery.

As the federal Environmental Protection Agency prepares to propose carbon dioxide regulations in June, targeting the country's fleet of existing power plants, states involved in the RGGI are expected to lobby the EPA to acknowledge the progress already made in cutting pollution.

They also hope to provide a template for other states which need to prepare strategies to comply with future federal rules on carbon emissions.

States in the RGGI program turned to lower emitting electricity sources in 2013, according to data from the Energy Information Administration, an arm of the U.S. Department of Energy. Nuclear generation rose 7 percent in 2013 from 2012, while hydroelectric and other renewable energy also rose.

The use of natural gas for electricity declined 16 percent from 2012, however, while coal use, which has dropped in recent years, rose by 5 percent.

(Reporting by Valerie Volcovici, editing by Ros Krasny and Tom Brown)