California carbon market taking shape

The California carbon market has been making significant headway in recent weeks as it moves toward its launch in January 2013.

Two major carbon registries have begun accepting projects conducted under the California Air Resources Board (ARB) approved protocols. So far only Forestry, Urban Forestry, Livestock Methane and Ozone Depleting Substance projects have been approved for the California carbon market.

ARB will be holding training sessions for both carbon registries and carbon offset project verifiers on June 18-22 and then again June 25-29.

At least two registries are expected to assist the ARB with the administrative tasks associated with registering and tracking carbon offset credits, following their training certification.

Additionally, over 30 carbon offset verification organizations have applied to undergo ARB accreditation. These verifiers will provide third-party oversight on all carbon offset projects to ensure validity and additionality for offsets in the California carbon market.

Seeking to engage a broad range of stakeholders, the ARB has also held a series of public workshops including a recent ‘Market Simulation’, where regulated emitters such as energy utilities including Pacific Gas & Electric and Southern California Edison were able to voice potential concerns.

A practice allowance auction will be held in August ahead of the California carbon market’s first carbon allowance auction which will take place November 14.

To date, California carbon allowances (CCAs) have been trading between $15-$16, well above the $10 reserve price outlined in the ARB’s comprehensive market Regulation.

Revenues from allowance auctions are expected to total over $1 billion in 2013 alone.