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California carbon allowances beat expectations at 2nd auction

Source: Thomson Reuters Foundation - Fri, 22 Feb 2013 20:41 GMT
Author: Reuters
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SAN FRANCISCO, Feb 22 (Reuters) - California's largest greenhouse gas-emitting businesses paid ${esc.dollar}13.62 per metric tonne (1.1 tons) for the right to release carbon, narrowly beating market expectations in the state's second carbon permit auction.

At the state-run auction, California managed to sell all of the nearly 13 million carbon permits it offered to cover emissions for this year and less than half of the roughly 9.6 million permits it offered to cover 2016 emissions, the California Air Resources Board (ARB) said on Friday.

Allowances to cover 2016 emissions cleared the auction at the lowest allowable price under the program's rules, ${esc.dollar}10.71 per tonne, the ARB said. The quarterly allowance auctions are a critical component of the state's first-in-the-nation economy-wide, cap-and-trade program, which serves as the backbone for California's effort to cut its emissions back to 1990 levels by 2020.

California hopes its climate change program will serve as a model for other states as well as the federal government.

Environmentalists hailed the auction results as a success.

"Today's results represent another successful chapter in California's story of cutting pollution and moving towards a clean energy economy," said Derek Walker of the Environmental Defense Fund.

"The results also demonstrate that this is a strong, viable carbon market," he said. (Reporting by Rory Carroll; editing by Gary Hill, G Crosse)

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