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First California Auction Takes Place Today; Business Group Files Last Minute Lawsuit
Despite 11th hour lawsuit, California conducts today the first auction of allowances under the cap-and-trade program. Results will be released Monday.
Today the California Air Resources Board (ARB) will conduct its first auction of carbon allowances under the AB 32 cap-and-trade program. ARB is mandated to sell a portion of carbon allowances at quarterly auctions. In addition, entities that have been allocated allowances may consign their supply to be sold at the ARB-held auctions.
ARB will auction 23.1 million vintage 2013 carbon allowances, which can be used in the first compliance phase of the program. In addition, ARB is auctioning approximately 39.5 million vintage 2015 allowances for the second phase of the program starting in 2015.
The auction will run from 10:00 am to 1:00 pm Pacific Time. Results of the auction, however, will not be publicly released on the ARB website until 12:00 pm PT, Monday, November 19 .
Yesterday afternoon, the California Chamber of Commerce filed a last minute lawsuit seeking to invalidate the auction and enjoin ARB from conducting it today. The CalChamber lawsuit alleges ARB has exceeded its authority by creating a program which withholds a portion of allowances for sales at auction. The business group maintains the auction program is in effect a means for the state to generate revenue that was not specifically authorized by AB 32.
The lawsuit was filed in Sacramento Superior Court. ARB has indicated they will look into the the lawsuit, but they will continue with the auction today as planned.
If you have any questions regarding the auction or the California carbon market – or you wish to transact in the market, please contact Evolution Markets’ US Carbon Markets team at: +1 415.963.9137 or +1 914.323.0265.