California cap and trade scheme yields just 14% of expected revenues

In late November, the California Air Resources Board held its first of these auctions, in which businesses such as oil refineries and utilities bid for credits that allow them to emit greenhouse gases. They must cut back their production or buy enough credits to cover all their emissions. Statewide emission caps will drop each year as California pushes businesses to produce fewer greenhouse gases or pay more to buy the declining number of credits for auction in this newly created government “marketplace.”

That is the plan anyway. “First cap-and-trade auction a bust for California budget,” read the headline in the Sacramento Bee. Budget planners expected that the state would receive $1 billion from the sale of credits, but the 2013 credits went for a low price and there was little demand for 2015 credits. As the Bee story explained, “The nonpartisan Legislative Analyst’s Office estimates that if trends hold in the February and May auctions, the state may only raise about $140 million in the first year.”

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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