California’s carbon cap and trade program is back on track, and Quebec is in line for a share of the proceeds, after a successful auction for emission credits earlier this month.
On the strength of an appeals court decision authorizing the state to extend the program through 2030, “the August 15 auction saw increased demand and prices for carbon allowances,” the U.S. Environmental Defense Fund reports. The credits sold for US$14.75—the highest premium over the minimum price (currently $13.57) since Quebec joined the program—and raised a record $640 million for California’s Greenhouse Gas Reduction Fund.
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Quebec and California will share $300 million in revenues, earmarked for energy efficiency programs and price support for low-income energy consumers, Grist reports.
“This is what certainty looks like,” writes EDF senior attorney and carbon market specialist Erica Morehouse. Recent auctions had fallen flat, as potential market participants waited to see whether the state legislature would extend the program beyond 2020—and whether legal challenges to the cap-and-trade program would succeed.
“Today’s results affirm the courage of the votes taken to secure the future of cap and trade in California,” Morehouse writes. “Carbon prices now more directly align with expectations about the true cost of reducing carbon pollution through 2030. That clearer and more accurate price will send a signal throughout California that will drive the action needed to meet the state’s climate targets and show others around the world what is possible.”