Industrial companies and other businesses paid a combined $331.8 million for carbon credits in California’s latest cap-and-trade auction, state officials said Thursday.
Environmentalists said the results of the latest quarterly auction were positive in light of recent controversy surrounding the market.
Oil refiners, some legislators and others want the state to postpone the scheduled Jan. 1 expansion of the program to include emissions from motor vehicles for the first time, which is expected to inflate gasoline pump prices.
In the auction, which was held Monday, companies paid $11.50 a ton for carbon credits that can be used this year, according to the California Air Resources Board. All 22.5 million available credits sold out. Bidders paid $11.34 a ton for carbon credits to be used in 2017; about two-thirds of the 9.3 million available credits were purchased.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
“This is especially encouraging given the recent push from oil companies to delay the inclusion of transportation fuels in the program,” said Katie Hsia-Kiung of the Environmental Defense Fund in a blog post. The “auction results demonstrate that the program is strong and intact.”
The market is the centerpiece of AB 32, the state’s global-warming law. Under the law, the state has placed a ceiling on the total amount of carbon that can be emitted each year by more than 400 big manufacturers, food processors and others. The cap declines slightly each year. Companies get most of the credits they need for free; they can comply with the law by reducing emissions or buying additional credits.
State officials say the market-based approach gives companies flexibility. Business groups say the state-run auctions represent an unconstitutional tax.
In any event, the inclusion of motor vehicles will drive home the impact of the law to every California motorist beginning Jan. 1. The Legislative Analyst’s Office said the expansion could raise the retail price of gasoline by 13 to 20 cents a gallon.