California’s first quarterly auction of greenhouse gas allowances took place on November 14th. For the first time in history, California set a price on carbon - $10.09 per ton. This opening price is a modest number and it signals to businesses that the transition to a lower carbon future may be less expensive than anticipated.
This first auction collected $289 million, of which about $233 million will be used by the Public Utilities Commission for the utility sector, including rebates to consumers. The remaining $56 million will be spent according to an investment plan passed with next year’s State budget according to rules established by the Governor and the Legislature.
In the first auction, only ten percent of greenhouse gas allowances were up for purchase – the remaining amounts were given away for free to the participating companies and organizations. In the future, however, the total amount auctioned will increase while the cap on total emissions will decrease.
This should increase the price per allowance and the total amount collected by the State, and also signal to the marketplace that doing business with lower emissions is cheaper. Other polluting industries will come under the cap in the future, including transportation fuels in 2015.
TransForm is working with our allies to propose spending revenues collected from the State’s greenhouse gas auctions in ways that increase our transportation choices and reduce our greenhouse gas emissions plus other pollutants.
Our State has set a strong goal – 80% reduction in greenhouse gas emissions by 2050 – and we can only achieve it with projects that give us real choices for reducing our emissions.
Sign our petition to tell the Governor and the Legislature that California needs projects and programs funded by cap & trade auction revenues to transform the ways we use energy.