California Carbon Auction Clears at Record High Prices

The twenty-second quarterly carbon auction held by California and Quebec sold all of the nearly 57.1 million carbon permits offered for current emissions at a price of $17.87 per allowance, above the floor price of $16.68, according to the results released on Feb. 26 by the California Air Resources Board. The current allowance price is higher than the previous record of $17.45 set in the May 2019 auction.

The auction sold 100 percent of the nearly 8.7 million future allowances offered for 2023 emissions at a price of $18, which is also above the floor price. The allowances raised about $600 million.

The auctions are held under the cap-and-trade program, which places an economy-wide cap on major emitting sources. The annually declining emissions cap decreased by nearly 3.5 percent from 2019 to 2020. The program is a central part of California’s plan to reduce greenhouse gas emissions 40 percent below 1990 levels by 2030.