Cap-and-trade auction a success: California regulators
SACRAMENTO (KABC) -- California state regulators announced Monday the success of an auction of greenhouse gas emissions.
All of the pollution permits available for 2013 were sold at last week's auction.
Permits were sold, each one allowing for one ton of carbon. There were 23.1 million permits sold, according to the California Air Resources Board. The permits sold for $10.09 at the auction, which began on Wednesday.
The permit sales last week opened the largest carbon marketplace in the nation and the second-biggest in the world after the European Union. The California air board will hold four such auctions a year.
The auction of permits was part of the state's cap-and-trade program, designed to reduce carbon emissions. The program is a part of California's 2006 global warming regulations, AB 32 The goal is to have the same levels of greenhouse gasses in 2020 as in 1990.
Companies are forced either to buy more credits if they pollute over their limit, or use more green technology so they pollute less. Either way, it costs money.
Various industries, including petroleum and manufacturing, have opposed the program. The California Chamber of Commerce has filed a lawsuit seeking to invalidate the program, arguing the board does not have the legal authority to collect money for the state.
About 97 percent of the allowances were bought by companies regulated under the program, and another 3 percent were bought by financial traders for later sale.
Nearly 40 million permits for 2015 - a year when cap-and-trade widens to include more entities - were also sold in the first auction. About 5.5 million of those allowances were auctioned for $10 each.
Some of the money collected by the state will be returned to residential utility ratepayers to help offset an expected rise in their bills due to cap and trade. Other portions of the funds will go to energy efficiency and other projects in low-income neighborhoods.
The Associated Press contributed to this report.
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