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California Carbon Prices ‘Will Remain Low’

California carbon prices will remain low through 2020 due to excess permits, which will limit the revenue the state will raise through its carbon auctions, Reuters reports.

California carbon market partner Quebec saw 12 percent lower than anticipated carbon prices, according to analysts at Thomson Reuters Point Carbon. This means prices for the linked market will be just above the action floor price of $11.34 a metric ton this year.

As a result, California’s quarterly permit auctions will only raise $21 billion for the through 2020 — well below the forecasted $60 billion in revenue, analysts say.

Analysis by Environmental Defense Fund published earlier this month said the first year of California’s cap-and-trade program shows the state’s carbon market is well-constructed and strong while the state’s economy continues to improve, according to analysis by EDF.


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4 thoughts on “California Carbon Prices ‘Will Remain Low’

  1. The carbon price of $11.34 / metric ton is lower than anticipated, but it is still $11.34 too high. Consumers are paying for this, and any company that locates in California and pays that price is at a competitive disadvantage to the same company in a state that does not impose this tax.

  2. The argument that any non-zero price for carbon is too much; is out and out wrong.
    Society (read: consumers) pays for many ‘internalized’ costs; ranging from higher medical care prices to cover the uninsured, to highway taxes that support our infrastructure, to all other taxes that support the huge variety of services that government provides (the common defense, police and fire protection, etc.), and even to the simple price of all goods and services on the market (whose prices are set in part by how much it cost to produce). And so on, and so on.
    Forcing a carbon price is just one additional example out of thousands that already exist and are accepted parts of our capitalistic society. In this case, carbon prices impose an incentive for societal well-being: the reduction of AGW-causing GHGs, the improvement of energy self-reliance and security, the reduction in other forms of pollution, the reduction of mountaintop removal coal mining, etc., etc.

    I say, let’s increase the price of carbon.

  3. It isn’t even a “tax”. Companies need not pay a dime if their CO2 emissions fall below the amount that they are freely allowed to emit. And if their emissions are higher that that, there are several alternative compliance paths that they can choose to pursue as they see fit, including investments in equipment updgrades that reduce emissions and therefore will serve to reduce or eliminate their carbon cost expenses in future years. This range of options demonstrates that the cap&trade mechanism under consideration here is not a carbon tax.

  4. In addition, consider the costs to companies when they pay for trash pickup. Do you think of that price, which is passed on to consumers; as being wrong or unfair? No? Then what’s so wrong about charging companies for the CO2 pollution that they are dumping? How is that fundamentally different than the trash that they produce? If they pay for one type of pollution, why not pay for another?
    Or consider the example of a company that is fined for illegal pollution of a river, such as what just happened in West Virginia. Isn’t it acceptable and justified to fine a company for such pollution? And if so, then what about the carbon pollution that they emit into our common air?
    In these and other comparisons, it can be seen that the imposition of a carbon price is both justified and amply backed up by historical examples of payment for other types of pollution. Payments that are nearly always ‘passed along to consumers’ in the end.

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