Wednesday, August 26, 2015

California/Quebec Cap and Trade Auctions Becoming Routine

Cap and Trade auctions for greenhouse gas allowances have become quite routine.  The most recent joint auction, conducted by the California Air Resources Board and the Quebec Ministry of Sustainable Development, Environment and the Fight against Climate Change, was held on August 18.  The next one is scheduled for November 17.  (Information here)

At the August auction, over 73 million 2015 allowances were sold at a price of $12.52.  Qualified bidders were primarily affected utilities and energy companies, ranging from BP and Chevron to PG&E, SMUD and the Modesto Irrigation District.  Morgan Stanley Capital Group was the one financial company I recognized among the bidders.  It is not publicly known which bidders succeeded in receiving allowances or how many allowances they received.  (More detail, including list of qualified bidders here)

Auction proceeds are resulting in substantial resources for Quebec climate-friendly investments, as they are in California.

"The carbon market is the centerpiece of Québec’s strategy for fighting climate change," said Quebec Minister of Sustainable Development, Environment and the Fight against Climate Change David Heurtel.  "In addition to ensuring GHG emission reductions, it is a green fiscal tool that bolsters the re-launching and sustainable development of our economy. By 2020, more than 3.3 billion dollars will have been invested to support Québec’s businesses, municipalities and private citizens in their transition to a low-carbon world."

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