a month after a bruising political battle to extend California’s cap-and-trade program, the state received a big vote of confidence in the policy’s future.
Cap and trade requires oil refineries, food processors and other facilities to buy permits to release greenhouse gas emissions into the atmosphere, and state regulators auction off the permits several times a year.
During August’s auction, every emission permit offered by the state was sold, and prices reached their highest level since the program launched five years ago.
The auction results, announced Tuesday, were the first since Gov. Jerry Brownsigned legislation continuing cap and trade until 2030, erasing some of the political and legal uncertainty that had dogged the program.
“Today’s results affirm the courage of the votes taken to secure the future of cap and trade in California,” Erica Morehouse, a lawyer with the Environmental Defense Fund, wrote on her organization’s website.
During each auction, the state sets a minimum price per permit, which was $13.57 in the latest round. The bidding led to a final price of $14.75, the highest it’s been above the minimum in years.
The results were encouraging after so much turmoil with the program, said Chris Busch, research director at Energy Innovation, a San Francisco think tank.