California is the first state to implement a cap-and-trade program.The initiative’s goal: to reduce the state’s carbon emissions by 30 percent.
The cap-and-trade effort reached its first milestone this week: an auction setting the price companies must pay for each metric ton of carbon dioxide they emit, over a certain limit.
As the New York Times reports, the initial price of $10.09-per-ton was lower than regulators had anticipated.
The results of the first auction, announced on Monday, came as both a relief and a bit of a disappointment, although state officials put the best face of it. In a statement, Mary D. Nichols, chairwoman of the California Air Resources Board, said, the auction was “a success and an important milestone for California as a leader in the global clean-tech market.” She added, “By putting a price on carbon, we can break our unhealthy dependence on fossil fuels.”
Among traders and regulators, there was relief that all of the 23.1 million allowances covering 2013 emissions that were up for auction were sold. The number of bids exceeded the total allowances by about 3 to 1. Polluters do not have to submit the allowances to cover their emissions until November 2014.