The Week Ahead: California to Hold Carbon Auction as It Consider Giving More Allowances Away for Free


Greenhouse gas emission allowances will be up for sale in California as the Air Resources Board holds its fourth quarterly auction Aug. 16 as part of its economywide cap-and trade program.

As detailed in an Energy and Climate Reportarticle, during the last auction of vintage 2013 allowances that was held May 16, 14.5 million were sold at a settlement price of $14 a ton. The price was up slightly from the Feb. 19 auction's clearing price of $13.62 a ton and the $10.09 settlement price in the initial sale last Nov. 19.

Advance auction of vintage 2016 allowances also increased in May over the last two sales, with bidders purchasing more than 7.5 million of the 9.56 million offered. Those allowances, however, sold for the reserve, or floor, price of $10.71 a ton.

During the Aug. 16 auction, 13.8 million 2013 and 9.56 million 2016 vintage allowances will be up for sale.

California's trading program covers approximately 350 businesses with 590 facilities. Electric utilities and large industrial facilities are the first to be required to meet the declining annual emissions caps, beginning this year. The list of bidders includes companies such as Chevron U.S.A. Inc., municipal utilities, investor-owned utilities, food processors, and carbon trading businesses.

To ease the economic impact of the program, 90 percent of the allowances in the first phase of the program have been provided free to covered entities.

As detailed in a July 19 article, the percentage of free allowances given to companies may increase through 2017 for industries, such as petroleum refineries, that CARB has determined may face increased risk of competition from out-of-state companies not subject to the trading program.

CARB plans to hold a workshop Aug. 13 to discuss proposed amendments to the cap-and-trade program, including an increase in free allowances, for the refining sector and related industries.

Connecticut to Hold Hearing on RGGI

On Aug. 14, the Connecticut Department of Energy and Environmental Protection will hold a hearing on proposed regulations to adopt a model rule developed by the Regional Greenhouse Gas Initiative.

In addition to Connecticut, other states that belong to RGGI's cap-and-trade program and that regulate carbon dioxide emissions from power plants are Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont.

As covered in a July 19 article, based on a RGGI program review, Connecticut's proposed regulations would implement an agreement to reduce future regional carbon dioxide allowance budgets and emission allocations to more closely align with current emissions in the region and drive continued reductions from power plants.

National Energy Summit on Agenda

Senate Majority Leader Harry Reid (D-Nev.) will co-host a National Clean Energy Summitin Las Vegas Aug. 13. Other hosts of the summit include the Center for American Progress, the Clean Energy Project, MGM Resorts International, and the University of Nevada. Panel topics will cover "Clean Energy Solution in States," "Resilience to Extreme Weather," "Breaking Though Gridlock on Energy Policy," "21st Century Energy Markets" and "Innovation to Deployment."

World Bank to Release Book

The World Bank will release a book Aug. 12, Weather and Climate Resilience: Effective Preparedness Through National Meteorological and Hydrological Services. According to its authors, national meteorological and hydrological services need to be modernized on a global scale, especially in Africa, to save lives and reduce disaster costs related to extreme weather events.

CARB to Host Event

On Aug. 13, in Sacramento, Calif., CARB will host Matthew E. Kahn, professor at the University of California at Los Angeles, to discuss his book, Climatopolis: How Our Cities Will Thrive in The Hotter Future. The book addresses, among other things, how capitalism may help cities such as Los Angeles cope with and develop business opportunities to address adverse effects that climate change is expected to have on urban areas.