California cap and trade updates

California officially launched its world class cap-and-trade program for greenhouse gas pollution on January 1, 2013. California Carbon Allowances (CCAs) are auction by the State’s Air Resources Board quarterly through 2020. Compliance (regulated) and non-compliance entities, as well as individuals, can participate in the auctions as long as they register, meet the financial regulatory requirements and post bid guarantees.

Who is selling allowances and what is auctioned?

The auction is run by the state, but some of the allowances auctioned are owned by the state and some are owned by the state’s investor owned utilities. Two types of allowances are auctioned: current year vintage and future year vintage. Current year allowances are eligible for use starting in the current year and future year allowances can be banked for later use but may not be used for compliance until their vintage year. Each auction has a minimum allowable bid, or "floor price," which started at $10 in 2012 and increases every year by 5% plus the rate of inflation.

Auction results to date

Four successful auctions have been held to date. In all four auctions all 2013 vintage allowances were sold above the floor (minimum) price.