This post was authored by Jonathan Camuzeaux and Maureen Lackner California hit its 2020 greenhouse gas (GHG) emissions reduction target four years ahead of schedule, according to 2016 emissions data released yesterday by the state. At this rate, the state is well-positioned to formally meet its 2020 target assuming it keeps up the good work. While […]

  The second California-Quebec-Ontario joint greenhouse gas allowance auction has sold all current allowances, just like the inaugural tripartite auction in February 2018. There was again strong demand for future allowances, all indicating that despite political and regulatory uncertainty from a key partner, Ontario, the market is on solid ground. May auction at-a-glance: All 90,587,738 […]

The results of the first California-Quebec-Ontario joint auction of greenhouse gas allowances were released today, and even with a record-high volume of allowances for sale, the current auction sold out with the price clearing just above the floor. This is an indication of the strength and stability of the expanded market. Even more significantly, this […]

Today the California Air Resources Board (CARB) adopted the 2017 Climate Change Scoping Plan, the strategy for achieving California’s 2030 greenhouse gas emissions target. Developing and updating this Scoping Plan is a process pioneered by California that provides a game plan of how the state intends to meet its climate goals with an increased focus on air quality.

California and Quebec released results today for the November 2017 auction which showed steady prices well above the floor for the second auction in a row. The November auction was also the second in a row to sell out of allowances.

The California Air Resources Board’s November 6 release of 2016 greenhouse gas (GHG) emissions data from the state’s largest electricity generators and importers, fuel suppliers, and industrial facilities shows that emissions have decreased even more than anticipated.

COP 23 has been a banner event for subnational actors, and especially for California. Between events and breaking news, our EDF California team has enjoyed visiting informally with representatives from around the world.

This week, signatories to the United Nations’ Framework Convention on Climate Change (COP 23) meet in Bonn, Germany to discuss implementation of the Paris Agreement.

en español  |  This morning California, Québec, and Ontario signed a linking agreement that officially welcomes Ontario into the Western Climate Initiative (WCI) cap-and-trade market. The announcement came after an inspiring Climate Week in New York where states, businesses, and individuals showed that despite Washington D.C going backwards, the U.S. will continue to make progress on […]

Strong results from the California-Quebec August auction released today reflect that the future of cap and trade is secure in California.

California is stepping up to extend its landmark cap and trade program, address local air pollution, and push California businesses forward toward a cleaner economy.

California politicians are deep into negotiations over how to extend the backbone of the state’s climate policies, the cap-and-trade program. The Governor’s office and legislative leadership are nearing a compromise that can lock in the 2/3 vote that would provide the strongest legal foundation for a future cap-and-trade program and accelerate the state’s progress to […]

The California Legislature is in the midst of a critically important discussion right now: how can the state do more to clean the air for all residents and address climate change?

Auction results from the May California-Quebec carbon auction showed increased demand after a California Court of Appeal upheld the legality of California’s auction design last month. These auction results should send a clear message to legislators that California has a strong carbon market design that can weather legal challenges and the inevitable bumps of the […]

Today Senator Bob Wieckowski, supported by Senate President Pro Tem Kevin de Leon, proposed what amounts to a complete overhaul of California’s cap-and-trade program after 2020 in amendments to SB 775. Pro Tem de Leon in particular has been a tireless champion of effective climate policies that are benefiting California’s communities and making the state […]

Carbon auction results released today say more about the many milestones that are ahead for the cap-and-trade program rather than anything about the cap-and-trade program’s core function of reducing overall emissions.

Co-authored by Erica Morehouse and Jonathan Camuzeaux. While we hope President-elect Trump will listen to the almost unanimous global voice of governments and business leaders who all understand that we must act to avert catastrophic climate change, it’s indisputable that leadership from U.S. states will be of paramount importance. Amidst this chaos and uncertainty California […]

California made history a decade ago this month by being first in the nation to pass legislation (AB 32) putting an absolute limit on carbon pollution through 2020. The California Legislature made history again last week by extending and strengthening those limits to 2030 (SB 32 and AB 197). SB 32 requires California to reduce […]

By Erica Morehouse

The results released today from California and Quebec’s latest cap-and-trade auction show a slight rebound in demand from results seen in May, but still demonstrate the need for a continued commitment on ambitious climate action beyond 2020. The results were released minutes after members of the California Assembly voted on ambitious 2030 targets; the final legislative votes are expected tomorrow.

The August 16 auction offered more than 86 million current vintage allowances (available for 2016 or later compliance) and sold just over 30 million. Approximately 10 million future allowances were offered that will not be available for use until 2019 or later; 769,000 of those allowances were sold.

These auction results represent a slight increase in demand from the May auction, where approximately 10% of the current and future vintage allowances that were offered sold. More allowances were also offered at this auction since allowances consigned by utility participants that were not sold in May were offered again at this auction.  The number of allowances offered for sale by utilities meant that the only state controlled allowances that sold were a small number of future vintage allowances.

California state controlled allowances that were not sold in August will not be offered again until two auctions clear above the floor price, representing a temporary tightening of the cap and a way for the program to self-adjust to temporary decreases in demand.

What changed and what is the same since the May auction

After May’s auction we pointed to several major factors that contributed to low demand: secondary market allowances were available for purchase below the floor price; regulated emissions have been below the cap allowing businesses to take a wait-and-see approach to purchasing allowances in advance of a pending appeal challenging the cap-and-trade auctions in the court of appeal; and need for increased certainty about the post-2020 cap-and-trade program.

Here’s what affected the August auction results:

1. Secondary market prices have increased to right around the price of the current auction floor. This is likely the main factor contributing to the August auction’s slightly higher sales.
2. There have been no further developments on the litigation as parties wait for the court to announce an oral argument schedule.
3. There has been some movement on California’s effort to provide post-2020 certainty but not definitive action. In July, California's Air Resources Board released proposed amendments to set rules and a cap-and-trade carbon budget in-line with achieving a 40 percent reduction below 1990 levels by 2030. Final agency action is not expected until spring of 2017. The California Legislature is also considering a package of bills that would cement the 2030 target, currently in executive order, into statute. Assembly members voted today on climate targets and we will see whether legislative members will fulfill the will of over two-thirds of the California electorate by passing these targets.

California’s package of climate programs, including cap and trade, must first be evaluated based on whether emissions are going down – and the latest data from ARB in June showed that emissions do continue to decline. Selling out an auction and raising a set amount of revenue does not equate to overall success for the cap and trade program.

That said, once climate proceeds are in the Greenhouse Gas Reduction Fund (GGRF), spending them wisely to reduce emissions and benefit communities, especially disadvantaged communities, is a metric of program success. To date, about 1.4 billion dollars have been languishing in the GGRF, not creating benefits, and resulting in consequences for real Californians.

In addition to passing climate targets, Legislators should continue to act on proposals like the one Pro Tem Kevin de Leon has put forward to spend existing climate dollars this session.

By Tim O'Connor

Cropped image via Flickr/ mikeslife

California drivers, communities, and businesses have endured degraded roads, unending traffic, choking pollution, and limited transit options for years.  As the population continues to grow, so too will the problems of the transportation sector (and many other sectors) unless major investments are made.

Given the profound need to clean-up California’s infrastructure, Tuesday’s $390 million expenditure award by the California State Transportation Agency (CalSTA) and yesterday’s proposal by the State Senate to spend $1.2 billion of available dollars generated by California’s cap-and-trade auctions are important steps in reaching communities that need these upgrades most. What these critical spending plans also clearly demonstrate is that cementing 2030 pollution reduction targets into statute ensures continued investment in reducing emissions and benefiting communities.

The value of long term climate policy

It’s been no secret that a political debate is underway in Sacramento over setting long-term climate pollution targets for California. Why? Setting long- term policy will support the state’s low-carbon, prosperous economy. This process is important not just for climate change, but to ensure growth and stability in the business and investment climate that will enable our economy to flourish.

Long-term climate policy – including cap and trade and a suite of other measures – aimed at cutting pollution has been a boon to the state over the past decade, allowing the economy to flourish, resulting in massive venture capital investment, innovative products, and reduced pollution.

Within the cap-and-trade program, auctioning emissions credits has become an integral way to make the program work, though the purpose has never been to raise and maximize revenue. As a result, within the existing landscape, the auctioning of permits has allowed for additional environmental improvements through investments such as the 14 different transit projects just announced. Similarly, and as outlined by the State Senate’s proposal, the cap-and-trade program can drive myriad other investments that cut climate pollution, such as traffic flow improvements, low- carbon vehicles, energy efficiency, urban greening, and sustainable community development.

When completed, the 14 projects funded by the CalSTA will benefit nearly every major urban area in the state, transcending political boundaries, bridging economic divides, cutting air pollution, growing jobs, and reducing congestion. And, with 30 million cars on the road consuming gas at some of the highest prices in the nation, improved transit and transportation systems simply give drivers more options – saving money and creating better mobility in the long run.

The massive need to invest in California and cut carbon

Unfortunately, California has a far greater need than what this $390 million can meet (the California Transit Association projects a total need of nearly $175 billion), or what the $1.2 billion State Senate proposal would deliver. Fortunately, policies like cap-and-trade work to cut pollution through a declining cap on carbon and a price on carbon, resulting in innovation and investments in regulated businesses. As permits are auctioned, targeted investments of proceeds generated through those auctions can also produce air quality benefits while leveraging private capital and inspiring innovation.

Over the next couple weeks, Sacramento lawmakers can positively impact the long-term certainty of California climate policy and its ability to drive pollution reductions and ensure vital investments in areas like transit and improved transportation systems. The current expenditure plans and proposals — along with several billion dollars that have already been allocated — illustrate how programs such as cap and trade create real investment options that benefit people, communities, and the environment across the state.