An oil refinery in Bakersfield, California.
All 23.1 million carbon allowances were sold at last week as part of California’s cap and trade program, but their sale price did not rise much beyond their minimum value of $10 per ton. Their estimated value, according to Bloomberg New Energy Finance, was between $12 and $15. The California Air Resources Board announced the results of the auction today.
At last week’s auction, the Air Resources Board also auctioned off credits for the second phase of its cap and trade program, which will start in 2015. They sold 5.58 million allowances at the $10 minimum price.
Despite the low prices, the Air Resources Board deemed the auction a success. This declaration may well be warranted considering two previous delays and a last minute lawsuit by the California Chamber of Commerce calling the cap and trade program unconstitutional.
The revenue generated by the sale of emissions allowances will go to help California reduce its carbon footprint and help utility customers cover the costs of electricity prices driven-up by the new program.
Meribeth Deen is a freelance writer, researcher, broadcaster and film-maker. Her writing has appeared in Canadian Geographic, the Vancouver Sun, Alberta Ventures Magazine, Green Living Online, THIS Magazine and Alternatives Journal.
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