California’s Twenty-Fifth Carbon Auction Generates $590 Million

The twenty-fifth quarterly carbon auction held by California and Quebec sold all of the nearly 56.4 million carbon permits offered for current emissions at a price of $16.93 per allowance, above the floor price of $ 16.68, according to the results released on Nov. 24 by the California Air Resources Board.

The auction also sold 100 percent of the nearly 8.7 million future allowances offered for 2023 emissions at a price of $17.35, which is also above the floor price. The auction included a current auction of 2015, 2017, 2018, and 2020 allowances and an advance auction of 2023 allowances. By comparison the previous auction sold 89 percent of the carbon permits offered for current emissions while the May auction sold only 37 percent.

The allowances raised about $590 million for California’s Greenhouse Gas Reduction Fund. Proceeds deposited into the fund since the launch of the auctions in 2012 now exceed $14 billion.

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.