California’s industrial firms spent another $1 billion in the most recent auction of carbon emissions credits, state officials said Thursday.
The California Air Resources Board said its latest quarterly auction of carbon credits raised around $1.06 billion, making it one of the largest sales in the program’s 2 1/2-year history.
Prices ranged from $12.10 to $12.29 per ton, which is roughly in line with previous auctions.
The credits give the companies the right to emit greenhouse gases in the air. California’s system is linked to the Canadian province of Quebec, which means owners of credits can use them in either jurisdiction.
The market-based approach, called cap-and-trade, is a centerpiece of California’s 2006 climate-change law. While most of the credits are handed out for free, participants have to buy the rest, either on the open market or through the quarterly state-run auctions. The total amount of available credits declines slightly each year as part of the state’s plan to curb greenhouse gases.
The program has generated revenue far above expectations. In his revised budget, Gov. Jerry Brown said auction revenue in fiscal 2015-16 will more than double, to $2.2 billion, and legislative experts believe the final number will be much higher. Some 60 percent of the proceeds are ticketed for high-speed rail, urban transit and other programs, but the rest is up for debate in the Legislature.
Even as the program has grown, controversy persists. Business lobbying groups sued to block the state-run auctions, saying they are essentially a tax that didn’t get the required two-thirds legislative approval. The lawsuit failed but is being appealed.
The program generated additional controversy in January when it was extended, for the first time, to cover the carbon emitted from motor vehicle tailpipes. The result was a quick 10 cents-a-gallon increase in retail gas prices.