IN THE STATES
California’s cap-and-trade program is “well-constructed and strong,” according to a new analysis from the Environmental Defense Fund of the carbon market’s first year. The report’s conclusions include that “the successful state-run auctions are evidence of a well-constructed, strong and adaptive policy;” “the secondary market for California carbon allowances is robust and healthy;” “wise investment of the auction proceeds will be an integral part of achieving the state’s AB 2 pollution reduction goals;” “the average price for allowances suggests that achieving the cap may be less costly than some expected;” and that “market experts interviewed for this report expressed overwhelming positive views regarding the first-year performance of California’s cap-and-trade program.” But the report also notes that upcoming program milestones and other factors, such as the end of the first compliance period in November 2014, linkage of California’s cap-and-trade program with Quebec beginning Jan. 1, and proposed regulation amendments that are scheduled to be considered in Spring 2014, may impact the market.
