This post was co-authored by Jonathan Camuzeaux and Derek Walker.
As we pointed out in August, no news is good news when it comes to California’s cap-and-trade quarterly allowance auctions, which have been running effectively and without hiccups since November 2012. That’s right, last Tuesday’s auction marks the three-year anniversary of the program’s first auction, and the fifth time that California and the Canadian province of Quebec have conducted a joint auction. Time flies by when you settle into a routine, and another set of consistent, stable results indicates once again that California has a strong, well-functioning cap-and-trade program.
Steady results equal a healthy carbon market
Over 75 million current vintage allowances – which covered entities can use for compliance as early as this year – were offered at last Tuesday’s auction, and 100% of these allowances were purchased at a price of $12.73. This price, known as the settlement price, is 63 cents above the floor price set by the California Air Resources Board (CARB) for this auction, and is in line with previous auctions where allowances have cleared at prices slightly above the floor. In the advanced auction for 2018 vintage allowances – which can only be used starting in 2018 – over 10 million allowances were offered and 100% of these were purchased at a price of $12.65. Read More
By: Jonathan Camuzeaux and Tim O’Connor
Many people have been following the AB 32 cap-and-trade program since it kicked off on January 1, 2013. After all, it’s the most comprehensive carbon market in the world; it has created billions in investments for pollution reduction in California communities and garnered intense international attention. Now, based on data showing the program has cut climate pollution during its first compliance period, the chair of the California Air Resources Board (CARB) has dubbed it “officially a success.”
Under California’s Mandatory Greenhouse Gas Reporting program, the largest polluters in the state across all sectors must report their emissions every year. This data is then collected and counted by CARB. Yesterday, the agency released the final tally of the 2014 greenhouse gas (GHG) emissions covered by cap-and-trade, and with data, we get the final word on what happened during the program’s first compliance period (for years 2013 and 2014). Read More
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
Sometimes we need to look back in order to see the road forward. Whenever I reflect on the success of California’s climate policies, I like to hop in my time machine and dial it all the way back to ancient history – circa 2010 – when I was a young staffer in Washington D.C. fresh out of grad school with big policy dreams and an even bigger student debt.
For climate advocates, they were the best of times, which quickly became the worst of times. In 2010 the Senate was considering a federal climate bill to finally reign in the carbon pollution driving climate change, while jump-starting a clean energy economy to help pull us out of the worst economic downturn since the Great Depression. Visions of hope and change ran high.
But as history goes, the bill failed. Despite different accounts of how the story went down, all agree those were some dark days for the climate movement.
I was there to see it firsthand, and as dreams of big climate policy started to crumble, many advocates held on to one thought to keep us going: “At least we have California…” Read More
It’s always inspiring to see people stand up and fight for issues that matter to them. In our world, when politics can at times seem petty or backwards, it’s especially uplifting to see politicians do this. And that’s exactly what’s happening inside California’s state capitol.
The three most powerful political leaders in the state – Governor Brown, Senate President Pro Tem Kevin de León, and Assembly Speaker Toni Atkins – are moving in lockstep to enact an ambitious long-term climate and clean energy agenda. Yesterday, we witnessed a major demonstration of that political leadership when the pro tem and speaker marshalled support to move fundamental pieces of legislation through a key part of the lawmaking process – passing bills through their respective houses of origin.
The bills currently under consideration put in place a climate pollution reduction target of 80 percent below 1990 levels by 2050 and reaffirm the ongoing role of market-mechanisms like cap-and-trade in California. They accomplish this while also codifying the governor’s goals to meet half of our energy demand with renewable energy, double energy efficiency in existing buildings, cut our harmful petroleum addiction in half, and reduce climate pollution 40 percent below 1990 levels all by 2030. Read More