California carbon up to $19

In a light week of trading, California carbon allowances (CCAs) for use in the state’s carbon market fetched a price as high as $19 each.

For the past several weeks the price for CCAs has shot up, based on encouragement that the market is on schedule to launch in January 2013.

Prices have also risen in response to the closure of a nuclear plant that supplied nearly 8% of California’s electricity, which will likely force energy utilities to make up the difference through dirtier fossil fuel combustion that will push them closer towards the market cap.

The California carbon market saw a modest 31,000 CCAs trade this week, likely in due to the Fourth of July holiday.

For regulated California emitters, the rising price for allowances may encourage them to buy carbon offset credits as a cost saving measure.

Utilities can purchase carbon offset credits to meet up to 8% of their emission requirements.

This totals a demand for over 25 million carbon offset credits during the first two years of the California carbon market.