Climate 411

Latest Western Climate Initiative auction sells out; still space for more climate ambition from cap and trade

By Katelyn Roedner Sutter / Bio / Published: February 24, 2021

Yosemite National Park

The latest California-Quebec auction was fully subscribed, based on results released today. This is the second quarter in a row where all allowances sold, which is good news for the state’s Greenhouse Gas Reduction Fund. There is still opportunity, however, for more ambition in the program moving forward.

Today’s results, by the numbers

All 54,773,607 current vintage allowances were offered for sale. This is the second consecutive auction where all current allowances sold. It should also be noted that there were just under 2 million more allowances offered in November compared to February, mainly due to the annual decline of the emissions cap.
Current vintage allowances cleared at $17.80, 9 cents above the floor price of $17.71. This is 87 cents above the November 2020 settlement price of $16.93.
All of the 8,306,250 future vintage allowances offered for sale sold, just as 100% sold in the previous auction. These allowances may not be used for compliance until 2024.
Future vintage allowances sold at $18.01, 30 cents above the floor price of $17.71, and 66 cents above the $17.35 settlement price from November 2020.
California raised almost $650 million for the Greenhouse Gas Reduction Fund, some of which the Legislature may allocate during the ongoing budget process for priorities such as the Community Air Protection Program and the Safe and Affordable Drinking Water Program.
Quebec raised just over $150 million (just over $190 million CAD) to invest in their own climate priorities.

Posted in California, Cities and states, Greenhouse Gas Emissions / Comments are closed

Washington state can make good on its climate promises and close the emissions gap

By Katelyn Roedner Sutter / Bio / Published: December 15, 2020

Editor’s note: This post was last updated Jan 12, 2021.

After a harrowing year, which included a record-breaking wildfire season in Washington that burned over 700,000 acres, Washington state lawmakers now have the opportunity to make meaningful climate progress in the new 2021 legislative session. Governor Inslee recently unveiled a comprehensive legislative framework for the upcoming session, which focuses on securing reductions in climate pollution consistent with the state’s science-based reduction targets. The package proposes a Clean Fuel Standard, doubles-down on curbing pollution from buildings and investing in clean energy, and critically, includes a firm, declining limit on greenhouse gas emissions that can guarantee pollution is slashed in line with Washington’s climate goals. The proposal also centers environmental justice by ensuring that frontline communities have a prominent role in designing policy and climate investments. Governor Inslee’s leadership is welcome news following the release of a report by Environmental Defense Fund which shows that states with climate commitments, including Washington, are off course for bringing their emissions down consistent with science-based trajectories for 2030.

Posted in Cities and states, Greenhouse Gas Emissions / Comments are closed

Emissions are down and cap-and-trade revenue is up, but California’s Scoping Plan must accelerate climate ambition

By Katelyn Roedner Sutter / Bio / Published: November 24, 2020

Downtown Los Angles at sunset. Chad Ehlers / Alamy

Recent California climate news is about the past, present, and future of climate policy. Last month the state released their 2018 emissions inventory, showing a decline in transportation emissions. Today, results of the most recent Western Climate Initiative cap-and-trade auction were released and show a rebound in demand for allowances despite the ongoing COVID-19 crisis, and an increase in revenue for the Greenhouse Gas Reduction Fund. But as the California Air Resources Board previews priorities for the Climate Change Scoping Plan updated, set to begin in early 2021, it is clear that the state needs to ramp up its emission reductions.

Let’s start with today’s auction news.

Posted in California, Carbon Markets, Cars and Pollution / Comments are closed

Western Climate Initiative auction strengthens as state has opportunity to increase its climate ambition

By Katelyn Roedner Sutter / Bio / Published: August 25, 2020

Solar farm in the Mojave Desert, California

The results of the latest Western Climate Initiative cap-and-trade auction were announced today and showed stronger demand for allowances than in the May auction. This meant significantly higher revenue for California’s Greenhouse Gas Reduction Fund.

While the auction was still undersubscribed for the second quarter in a row, this is not a surprising outcome due to the ongoing COVID-19 crisis, the renewed closures in parts of California’s economy, and the overall economic uncertainty.

Posted in California, Carbon Markets / Comments are closed

Western Climate Initiative auction results show resilience of cap and trade and benefit of long-term climate investment strategy

By Katelyn Roedner Sutter / Bio / Published: May 28, 2020

Yosemite National Park, California. iStock.

The results of the latest joint California-Quebec cap-and-trade auction were released today. As expected, the auction was significantly undersubscribed, something not seen since February 2017. The low revenue from this auction points to a need for California to develop a diversified, long-term strategy to fund critical climate programs, even as the state works to balance many important fiscal priorities. At the same time, the resilience of the cap and trade program even during periods of instability provides a critical backstop, ensuring California’s targets for reductions in climate pollution are achieved.

Here’s a quick recap of the results:

Posted in California, Carbon Markets / Comments are closed

California’s experience with buyer liability shows how aviation can help ensure environmental integrity

By Katelyn Roedner Sutter / Bio / Published: May 1, 2020

https://www.flickr.com/photos/140970794@N06/30345941512

Airplane flying at sunset. Adam Clark, Flickr

The International Civil Aviation Organization is preparing to stand up its market-based emissions reduction program, the Carbon Offsetting and Reduction Scheme for International Aviation, or CORSIA. As it does so, ICAO must maintain CORSIA’s environmental integrity.

To that end, airlines should not be allowed to count, for CORSIA compliance, carbon credits that have been found to be invalid, e.g., fraudulently issued or otherwise not meeting CORSIA’s standards for credit quality. To ensure that all credits represent actual emission reductions, such substandard credits should be invalidated – even if the fraud isn’t exposed until after airlines have canceled the credits in CORSIA. The emissions for which the credits had been tendered have occurred, and still need to be covered by valid reductions in order to meet CORSIA’s promise of “carbon neutral growth.”

California offers one approach to how CORSIA can do this. In its market-based climate program, California has developed a way to cover the emissions from invalidated credits to uphold the integrity of its program and encourage emitters to invest only in high-integrity offsets. It’s known as “buyer liability,” which means that if the California Air Resources Board (CARB), the regulatory body, invalidates offset credits, then those who purchased the credits for compliance with California’s emissions limit must replace the invalidated credits. This ensures that emitters meet their full compliance obligations and that they are more diligent in selecting offsets.

Early on, California’s buyer liability approach caused some uncertainty among offset project developers. But seven years of experience demonstrates that buyer liability has worked in California’s carbon market. Here’s how we know:

Posted in Aviation, California, Carbon Markets / Comments are closed