Results released today for the California-Quebec cap-and-invest auction demonstrate that, while California’s reauthorization of the program through 2045 has helped keep prices off the floor, there’s clear appetite for greater ambition as California Air Resources Board (CARB) resumes its rulemaking process on program updates. The auction delivered largely stable results, with current vintages settling at a slightly lower price compared to the August auction while future vintages settled slightly higher. All current and future vintage allowances sold.
While these results demonstrate continued but modest improvement in market confidence (for context, uncertainty in the market cost California some $3 billion over the past year), they also show that there’s room for greater program ambition. The market can afford for CARB to do more to maximize the benefits of this landmark program for the state’s economy, cost of living and climate through the rulemaking process.
November auction results
- All of the 51,253,305 current vintage allowances (emission allowances valid for compliance this year) offered for sale were purchased, resulting in the third sold-out auction of 2025.
- The current auction settled at $28.32, $2.45 above the price floor of $25.87 and $0.44 below the August settlement price of $28.76.
- All 6,847,750 of the future vintage allowances offered for sale were purchased. These allowances can be used for compliance beginning in 2028.
- Future vintage allowances settled at $29.61, $3.74 above the $25.87 price floor and $1.11 above the August settlement price of $28.50.
- This auction is expected to generate roughly $840 million for the Greenhouse Gas Reduction Fund (GGRF) — roughly $150 million less than last year’s November auction, which settled at $31.91. This means less revenue flowing into the GGRF for community investments, consumer benefits, and climate resilience programs.
California can cut emissions faster while saving working families money
Right now, CARB is preparing to launch the formal rulemaking process to implement changes to the cap-and-invest program, including tightening allowance budgets to ensure the program’s emissions cap aligns with the state’s statutory emission reduction targets. So far, CARB has presented a pathway that would make only the bare minimum reductions necessary to meet our statutory 2030 targets, falling far short of the more ambitious scenario CARB previously said was necessary to put California on track to achieve our 2045 climate target. Today’s auction results with steady but modest allowance demand demonstrates that the market can bear a tighter allowance budget and more ambition.
New modeling from Greenline Insights and EDF shows California can adopt deeper emissions reductions to cut significantly more pollution while saving money for working families. This presents a major opportunity for CARB to take more ambitious climate action and ensure the program’s cap effectively drives down pollution at the pace required. Stronger program ambition would also help to maintain a modest but steadily increasing price signal for compliance entities, incentivizing them to make emissions reductions earlier rather than later and providing meaningful revenue to the GGRF, which is urgently needed.
A bigger emissions market = more pollution reduction
As federal leadership abandons climate action, linking the California-Quebec market with Washington’s cap-and-invest program offers one of the most powerful opportunities to strengthen the market while raising climate ambition. A linked market would be larger and more liquid, reducing price volatility and giving businesses greater long-term certainty to invest in decarbonization. A linked market is also projected to deliver greater regional emissions reductions than could be achieved in an un-linked program, accelerating cuts to climate-warming pollution. And at a time when federal climate progress is under threat, a unified West Coast carbon market would demonstrate durable leadership and help insulate both states from political and economic disruption. Together, linkage and a more ambitious emissions cap can deliver deeper, more cost-effective pollution reductions across the region.
Today’s results demonstrate that certainty is key for market confidence, but also that there is an opportunity to increase ambition. With the Legislature’s action to reauthorize the program and CARB returning its focus on the regulatory process, allowance demand and GGRF revenue are rebounding. This is good news — but now CARB needs to take the next steps to drive more pollution reductions and ensure long-term market ambition and stability.