280,000 California carbon allowances trade
280,000 California carbon allowances traded over the week as market participants eyed this Fridays allowance auction.
In a brisk week of trading, the price for California carbon allowances closed at $13.60.
Prices for California carbon allowances have followed a trend of dipping during the lead up to an auction. This has been the case for the past three auctions.
In the most recent auction held this past May, allowances reach a record high settlement price of $14 each.
The May auction saw all 14.5 million California carbon allowances for delivery in 2013 sell, and a substantial number of future allowances were sold as well.
To date, California carbon auctions have resulted in nearly $800 million in revenue.
Carbon offset credits have also been garnering attention as the first eligible credits for use in the California market were approved by the American Carbon Registry, one of two Offset Project Registries that the state’s Air Resources Board (ARB) has approved to manage carbon projects.
Regulated businesses in California will be able to purchase carbon offset credits to cover up to 8% of their annual emissions, creating a potential demand for 28 million credits n the next two years.
Carbon offset credits are developed under one of four ARB protocols that result in the reduction of emissions.
Forest carbon projects are expected to provide the majority of offset credits to the market.
So far 59 projects have applied to supply credits to the California market, but analysts predict a shortfall of up to 67% by 2020.