California Carbon Price Hits Record High
All 14.5 million available allowances for use this year sold, the California Air Resources Board says.
The $280 million includes the state’s sale of 7,515,000 carbon allowances for 2016 at the minimum price of $10.71 a metric ton, according to the state.
California’s inaugural auction in November raised nearly $300 million, with emitting businesses paying $10.09 per metric ton for the right to release carbon in 2013. All 23.1 million permits on offer were purchased.
In its second auction, held in February, California raised about $176 million with businesses paying $13.62 per metric ton of carbon, exceeding analysts’ expectations and selling at $2.91 above the reserve price. The Feb. 19 auction sold a little over half as many allowances with a reserve price set 71 cents higher. The price increase is in line with California cap-and-trade regulations, which state that the auction reserve should increase annually by 5 percent plus the rate of inflation.
The three auctions have raised $256 million for the state and $556 million for its largest utility companies, which are required to use the funds to protect ratepayers from higher energy costs, Reuters reports.
Backers of California’s cap-and-trade system say it will reduce emissions and possibly be a blueprint for the rest of the nation. Opponents, however, argue it could drive refiners, cement makers and other large emitters to leave the state, causing economic strain.
California’s cap-and-trade scheme has raised the ire of the state’s largest polluters. The Chamber of Commerce and the Pacific Legal Foundation, a conservative legal group, have filed separate lawsuits against the auction, both arguing essentially the same point: the California Air Resources Board exceeded the authority granted to it under AB 32, the global warming bill signed into law by former Gov. Arnold Schwarzenegger in 2006.
Energy Manager News
- SWL&P Looks to Increase Electric Revenues by Over $2 Million
- Behind the Meter Podcast: A New Metric for Data Center Cooling
- Schneider Electric’s NEO Network: Helping Make Efficiency Projects Real
- Efficiency Project Complete in Meriden, CT
- BuildingIQ Makes 2 Moves
- Constellation Acquiring Retail Electricity, Natural Gas Businesses from ConEdison Solutions
- Peninsula Clean Energy Authority Chooses Direct Energy as Supplier
- Energy Efficiency is Growing on Farms