Every year at your annual checkup, the doctor measures your blood pressure, listens to your heart, and asks you to take deep breathes while moving around her stethoscope. Through these tests, your doctor is gaining insight into your overall physical health and monitoring for anything unusual. Typically, no news is good news when it comes to this annual physical. The same goes for California’s cap-and-trade carbon market, which has been up and running smoothly for the past two and a half years.
Instead of annual check-ups, California’s cap-and-trade program has quarterly auctions – the results of which tell us a lot about the health of the overall program and the progress the state has made towards its greenhouse gas reduction targets. Consistent and stable results from one auction to the next are a positive indication that the state has a functioning, well-oiled program. In other words, no news is good news.
Last Tuesday, the California Air Resources Board (CARB), in partnership with the environmental ministry of the Canadian Province of Quebec (MDDELCC), held one such quarterly auction for cap-and-trade carbon allowances, during which individuals and companies had the opportunity to bid for a total of approximately 83.9 million allowances. Today, CARB and MDDELCC released the results and they reveal yet another successful sale of allowances to the market. Read More
When the preliminary plans for California’s cap-and-trade program were first introduced in 2010, it was quickly regarded as a groundbreaking policy due to its stringency, size, and scope. California was the ninth largest economy in the world – it has now jumped to eighth – and the Golden State’s program would soon implement the first economy-wide cap on greenhouse gas pollution in the country. But, it was not the first cap-and-trade program in the United States. In fact, ten states in the northeast had implemented the Regional Greenhouse Gas Initiative (RGGI) in 2008. Like California’s program, the RGGI system places a mandatory cap on greenhouse gas emissions and sets a corresponding price on carbon, but covering only the electricity sector. Despite the difference in scope and location of these two programs, they are both demonstrating that carbon pricing through cap-and-trade is an effective way to decrease harmful greenhouse gas pollution while allowing the economy to grow.
A new report released this past Wednesday by the Acadia Center digs into the most recent data out of the RGGI system. According to the Acadia analysis, the RGGI states have decreased their emissions by 35 percent since the start of the program, while emissions from the 40 states unregulated by a cap only decreased by 12 percent over the same period. At the same time as emissions dropped, the RGGI state economies grew by 21 percent as compared to the non-capped states, which only saw an 18 percent growth in their economies. California has similarly been able to grow its economy impressively while implementing an aggressive cap on emissions. During the first year of the program, the Golden State moved from ninth to eight largest economy in the world, grew its GDP faster than the national average, and decreased capped emissions by four percent. Read More
It may be hard to believe that just 15 years ago the term “clean tech” was largely unheard of. Today, the term has gained widespread usage, and is often applied to a diverse array of businesses, practices, and tools. Clean tech not only includes renewable energy technologies like wind and solar, but also electric motors, green chemistry, sustainable water management, and waste disposal technologies, to name just a few.
One research institution that has followed this sector through its short, but burgeoning history, is Clean Edge, a firm devoted exclusively to the study of the clean tech sector. Last week, the firm released their annual U.S. Clean Tech Leadership Index, which ranks each state based on several indicators across three categories: technology, policy, and capital. For the sixth year in a row, California came out on top as the leading state for clean technology. In fact, over the past year, California has widened its lead over the rest of the pack, with a score that is 15 percentage points higher than Massachusetts, the state in second place. According to the report, “with 55,000 people employed in its booming solar industry alone, a carbon market in place with its AB 32 trading scheme, and a 50 percent renewables goal by 2030 set by Governor Jerry Brown, California sets the pace for what a clean-energy economy looks like.” Read More
If you live or have ever lived in a city, you are probably familiar with the feeling of waking up in the wee hours of the morning to the sounds of a garbage truck as it makes its way down your street. Not the most pleasant sound to wake up to, sometimes made even worse by the sinking feeling when you realize you’ve forgotten to put the trash out on the curb the night before.
Now, what if you learned that noisy, polluting garbage trucks might soon be a thing of the past? And, what if phasing out these trucks saved your local garbage company money in the process?
A garbage truck revolution might sound too good to be true for some, but for Wrightspeed, a San Jose-based company founded by Tesla cofounder Ian Wright, it might be right around the corner. The company is developing a technology that will allow medium and heavy-duty truck owners to retrofit their existing fleet and turn their trucks into range-extended electric vehicles. This means companies can keep their old trucks while making them cleaner, more gas efficient, and virtually silent. Since old heavy duty trucks also happen to be some of the dirtiest vehicles on the road, the Wrightspeed model can be good for public health, cutting costly greenhouse gas pollution and harmful particulate matter emissions. Read More
Growing up can be tough. But we all remember how good it felt to pass an important exam or achieve one of our major goals – whether it be getting a driver’s license or graduating from middle school. California’s landmark cap-and-trade program was just recently put to the test after undergoing a substantial growth spurt, more than doubling in size to include transportation fuels, California’s biggest source of greenhouse gas pollution. To account for this increase in the number of businesses and emissions capped by the program, more than three times the amount of allowances were offered in the cap-and-trade auction held last week as compared to the one before it. This was also the second auction since California began holding joint auctions with Quebec, the Canadian province that has a similar cap-and-trade program in place.
Auction results released earlier today indicate that the strong foundation built over the first two years of the program allowed the market to easily pass this important growth test, remaining stable and strong even in the face of a considerable change in allowance supply and shifting market dynamics.
So what happened in this auction?
Of the 73.6 million current vintage allowances offered in this auction, 100% were purchased at a price of $12.21. This is 11 cents above the floor price and the settlement price at the previous auction, and is consistent with historical trends of prices slightly above the floor. In the advanced auction for 2018 vintage allowances, over 10.4 million allowances were offered and 100% of these were purchased at the floor price of $12.10. These allowances can only be used starting in 2018 and the fact that there was a high level of demand for them once again reflects confidence in the future strength of the market. These companies are making financial investments that are consistent with the belief that the market will be in existence well into the future, as was strongly signaled through the Governor’s and the Legislature’s prioritization of long-term emission reductions. Read More
These days, everyone seems to have an opinion about everything. The ubiquity of social media channels has saturated public discourse with so many viewpoints that it can be nearly impossible to distinguish facts from fiction. But facts still matter. Even though an argument about the quality of a neighborhood restaurant or the accomplishments of your local elected official might be inherently subjective, there’s no question that strong, empirical evidence gives you the best shot at coming out on top. What’s more, the greater the consequences of the issue being debated, the higher the stakes are when it comes to analyzing and acting on real-world evidence.
On one particularly timely and potentially far-reaching issue—solutions to climate change—evidence is mounting and becoming impossible to ignore: cap and trade is not just an idea you learn in an economics lecture, it is a policy solution being deployed successfully in California, the world’s eighth largest economy. According to EDF’s comprehensive analysis released today, California’s cap-and-trade program is working after two full years of implementation. Not only is the program incentivizing energy efficiency improvements, it is paving the way for the state to pass even stronger climate policies, and is helping other states and nations move forward with similar steps. Here are some of the top conclusions EDF puts forward in the report, based on our analysis of the evidence: