cap and trade


California Air Board Relents on College Carbon Credits

Universities could be getting some last-minute relief from cap-and-trade

Many state college campuses have "cogeneration" facilities subject to fees under cap & trade.

California universities appear to be in line for some relief from the state’s imminent carbon pollution fees.

Implementation of California’s controversial cap-and-trade program for greenhouse gases is only four months away, meaning it’s crunch time for the state’s Air Resources Board. On Thursday, the board will stage a dry run offering likely participants an opportunity to practice bidding on California carbon allowances — and allowing the ARB a chance to test its platform.

Not like it doesn’t already have its hands full. For months, cap-and-trade-eligible emitters including private businesses, military bases, universities, and waste-to-energy power-plant operators have been crying for exemptions under AB 32, arguing that they would suffer undue financial hardships. Continue reading

The New Cap & Trade Battlefront: How to Spend the Revenues

Lawmakers weigh in on what to do with the carbon-trading windfall

AB 32 requires California's largest emitters to meet carbon reduction targets. If a firm's emissions are below state-mandated targets, it may auction off its remaining "allowances" to firms that exceeded their emissions targets.

Since the enactment of AB 32 in 2006, California’s greenhouse gas emissions reduction law, analysts have speculated about how to spend the money generated from the law’s cap-and-trade carbon allowance auctions, the first of which is set for this November.

On Tuesday, the State Assembly passed new legislation, AB 1532, that narrowed the options. The bill, which the California Chamber of Commerce has described as a “job killer” and an “illegal tax,” passed 47-26 and awaits action in the Senate. If ratified, it would establish a “Greenhouse Gas Reduction Account” within the state Air Pollution Control Fund and authorize spending auction proceeds on clean energy technology, low-carbon transportation, conservation and green energy research and development.

On Friday, the California Air Resources Board held a public hearing to discuss where auction funds might be spent, as a panel of speakers from across the state and country — representing a broad array of industries and interests — sounded off on where this sizable stream of new funding might be best directed. Continue reading

Cap-and-Trade and Your Electric Bill

State rebates could offset electrical sticker shock, finds a new study

Forcing utilities to pay for their carbon emissions, as California plans to do, will mean more costly megawatts. Six months before formal compliance with the state’s new cap & trade system begins, regulators are still sorting out what to do about that.

One of them is to provide rebates to offset hikes in electric bills. A new report from the clean-economy advocates, Next 10 attempts to sort out the options and put some concrete numbers on them. For example, the authors estimate that for PG&E customers, pricing carbon will add somewhere from two-to-seven dollars a month to summer electric bills, and anywhere from $2.50-to-more than $10 for customers served by Southern California Edison. Where you fall in that range depends in part on which of California’s many climate zones you live in. Places like the Inland Empire, which rely more on air conditioning, would fall in the upper end of the range. Continue reading

First Real Partner for California’s Cap & Trade Program

Quebec takes the plunge with California to swap carbon emissions permits

Montreal at sunset: Quebec's economy is about one-sixth that of California.

Quebec has emerged as California’s first full-blown partner in the carbon trading program that ramps up later this year. That means that, pending final approval next month, when the two governments issue their first round of greenhouse gas pollution permits in November, industrial buyers will be able to use them both interchangeably. Continue reading

California Braces for the Complex World of Carbon Markets

In which Air Board chief Mary Nichols performs a dramatic reading of a vintage Jerry Brown speech

As chair of the California Air Resources Board, Mary Nichols is presiding over the nation's first comprehensive cap-and-trade program.

When its nascent cap-and-trade program ramps up later this year, California will be the first state in the nation to reduce greenhouse gases by making a broad spectrum of big polluters buy permits to exceed their allotted emissions.

Other governments, industry and scientists will be watching, but there’s still a lot to sort out. That much has been evident at this week’s carbon market and policy conference in San Francisco, “Navigating the American Carbon World.”

The long and winding road to carbon trading was highlighted by Mary Nichols, chair of the California Air Resources Board, in a little prank she played on the gathering. Obviously reading from a script, she stumbled over words, looked up at the audience, then back down at the page, plodding through her replies to moderator Diane Wittenberg. Continue reading

California Delays First Cap & Trade Permit Auction

State will start with a dry run while questions remain about how to spend the money

Starting next year, industries will have to track their greenhouse gas emissions and some will have to pay for carbon pollution rights.

Mary Nichols, chairwoman of the California Air Resources Board (ARB) announced at a state senate hearing that the first carbon permit auction will be pushed back to November 14th.

The surprise announcement came at a hearing called to discuss what to do with proceeds from the sale of permits to emit greenhouse gases, the first of which is expected to flow into state coffers late this year.

Nichols’ announcement stole the headlines, though she said that the new auction date will not affect the overall timeline for implementation and that August will now be a “practice auction.”

“We’ll give everybody a free round in August where the auction won’t really count,” Nichol told me. “So that gives all the stakeholders, including of course, all the companies that are going to have to be purchasing allowances at the beginning an opportunity to see how the system will actually work.” Continue reading

California Expects $1 Billion From Carbon Trading

And that’s just for starters — but how that money will be spent is still up in the air

California's cap and trade program will kick into gear when the state holds its first emissions allowance auction, in August.

There might be more money in the first year of California’s cap-and-trade program than expected. Governor Brown’s 2012-2013 budget includes $1 billion in revenue from the state’s cap-and-trade program, ramping up this year as part of California’s 2006 climate legislation, known as AB 32.

That might seem surprising since 90% of initial permits to emit greenhouse gases will be given away to industry. But number-crunchers at the Legislative Analyst’s Office (LAO) say that selling just ten percent of allowances at auction could generate that much cash. The price for an emission allowance has not been set, but projections range from $10-$40 per credit, which means that the state might garner even more than $1 billion in the bargain. Continue reading

California Adopts Nation’s Most Sweeping Cap & Trade Plan

But it’s just another milestone in a long journey that’s far from finished

It’s official (no, really, this time). California has cap & trade — or will once the program starts ramping up next year. Today’s approval by the state’s Air Resources Board was described by chair Mary Nichols as like “moving a large army a few feet in one direction.”

Ready to roll: A license plate in Sacramento bears the legislative shorthand for California's landmark climate policy.

The objective that “army” is marching — or shuffling — toward is, of course, the fulfillment of California’s goal to roll back greenhouse gas emissions to 1990 levels by the end of this decade. With at least a semi-intentional pun, Nichols calls cap & trade the “capstone” of that effort, although the program is expected to produce at most, 20% of the hoped-for reductions in carbon emissions. The rest will come from other measures either lumped under or related to the state’s Global Warming Solutions Act, more widely known as AB 32.

Those other measures include stricter standards for tailpipe emissions, a “low-carbon fuels standard” (still being worked on), and the ambitious-but-attainable goal to get a third of the state’s electricity from renewable energy sources, also by 2020. Continue reading

Activists to Air Board: Keep the Cap, Lose the Trade

Regulators vote to keep cap-and-trade plan on track

A parade of environmental justice proponents pleaded with officials to abandon cap-and-trade. A woman in the background holds a sign that says: "Keep the cap. Drop the Trade."

Members of the “environmental justice” movement lost a major round to air officials on Wednesday, when the latter voted to keep California’s nascent cap-and-trade plan on track.

The program is a key component of the state’s landmark strategy to cut greenhouse gas emissions to 1990 levels by 2020.

Activists sued to stop the program, claiming it does little to curb toxic emissions from industrial facilities and farming operations.

Environmental justice advocates packed the Sacramento hearing room of the Air Resources Board to fight the state’s plan to allow corporate trading of carbon pollution rights. Marie Harrison of San Francisco’s Bayview district put it succinctly:

“We are relying on you to do what you were put here for and that is to protect us.” Continue reading

Analysts Cut Carbon Price Forecast for California

Carbon may come cheaper than first predicted when California’s cap-and-trade program finally gets rolling.

Analysts at Thomson Reuters have dropped their projections of what polluters would pay for emissions permits from $40 to $36 per metric ton of CO2-equivalent gases.

Emilie Mazzacurati, who heads the firm’s North America Carbon Team, says pushing back the compliance date to 2013 and fears of a double-dip recession are behind the 10% trimming from its prior forecast.

Analysts say they expect greenhouse gas emissions to decrease in a sluggish economy. In 2009 and 2010, California’s emissions from power plants dipped by 12% due to a combination of milder temperatures, leading to less air conditioning demand, and a lull in manufacturing.

The trading price assumes that California goes it alone in cap & trade, although two Canadian provinces are expected to join the market eventually. Rules for the State’s cap & trade program have to be finalized by the end of October.