Sacramento, CA – After two disappointing quarters, the latest state carbon auction saw a jump in the market for California pollution permits.
State officials report that 88 percent of the available credits were snatched up in the quarterly auction held last week.
Since 2012 Cap-and-Trade plan was enacted, California has required companies emitting climate-changing gases to purchase pollution permits, which are auctioned quarterly. The permits can also be sold in secondary markets.
Demand plummeted earlier this year for the program that routinely generated hundreds of millions of dollars for state environmental initiatives. State officials maintain this was partly due to uncertainty about the program’s future as it was set to expire. Recently, state lawmakers extending the law that underlies the program for another 10 years prompting the surge in permit buys and the ultimate success of last week’s auction.
However, there remains a possible future snag as a state appeals court is considering a lawsuit filed by the California Chamber of Commerce contending that the program is an unconstitutional tax because it was not approved by a two-thirds supermajority of state legislature.