California carbon hits $19.25

Prices for California carbon allowances surged to $19.25 a piece this week, bolstered by continued confidence that the California carbon market will launch as scheduled in January 2013.

90,000 CCAs traded over the Intercontinental Exchange.

Prices have consistently risen since this spring as regulated entities in California have begun positioning themselves for compliance under the state’s new carbon market system.

Furthermore, the closure of a nuclear power plant that supplied 8% of total state electricity will likely require fossil fuel generators to make up the difference, increasing the output of dirtier carbon dioxide emissions.

Due to the seriousness of the damage to the nuclear plant, there is no timetable for when it will be back online.

Confidence in a timely start to the California carbon market paired with the closure of the low emitting nuclear plant has lead one broker to estimate that the new threshold for CCAs will remain in the $19-$20 range.

The first allowance auction will take place in November.