The results of California and Quebec’s carbon market auction released today show that the market can operate as designed and continue sailing along.
Participants in the Feb. 17th auction, California and Quebec’s 6th joint auction, had an opportunity to bid on over 81 million carbon allowances. Of those:
- 71.5 million of those allowances were current vintage allowances (2016 and earlier), which regulated businesses can use this year or in any future year for compliance. 95% of current vintage allowances sold at the minimum floor price of $12.73. In the November 2015 auction, prices anticipated the 2016 floor price and sold at $12.73 although the floor price was about 60 cents less.
- Just over 10 million of those allowances are only available for use in 2019 and after. 93% of the 2019 vintage allowances sold at the floor price of $12.73.
These results show steady prices and average participation by regulated businesses. It is somewhat unusual that some current allowances did not sell at this auction. However, these auction results demonstrate an important feature of the California-Quebec market that safeguards against large price swings like those seen in other commodity markets: a minimum price floor in every auction that increases steadily each year. Read More