Newsletter: What Does 2014 Hold for Cap-and-Trade?

 

Read our outlook for cap-and-trade in 2014
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‘Tis the Season… 
‘Tis the season to be jolly, but also to plan the year ahead! What does 2014 hold in store for California cap-and-trade?  

After a year of incremental regulatory action, 2014 promises to be a year ripe in political developments for California’s cap-and-trade program and climate policy in general. In our post: Outlook for 2014 California Cap-and-Trade: Politics Take the Center Stage, we examine key expected developments for the New Year and their potential impact on the California carbon market from Sacramento to Washington, DC.

And as a special gift to our reader, you can download our nifty California Carbon Calendar 2014 – pin it to your desk and don’t miss a beat in 2014!

Politics of Carbon Auction Proceeds – The Battle Ahead.
As the 2014/15 budget debate ramps up, the question is: what will the Governor do with 2014/15 auction proceeds, and when will last year’s loan be repaid and invested? In our estimates, revenues could rise to about $1.5 billion in FY14/15 and to $2.4 annually in 15/16 and 16/17. Read our analysis: Politics of Carbon Auction Proceeds – The Battle Ahead for a full analysis of the stakes and likely developments.

Quebec’s First Carbon Auction: A Gentle Warm-Up
Quebec’s first auction took place on December 3rd. Just over a third of allowances offered for sale were purchased by compliance entities at the reserve price of CAN $10.75 (US $10.10). The low interest in Quebec V13 allowances came as a surprise as many participants saw a potential upside price risk due to the uncertainty surrounding any first auction – which didn’t materialize. In our analysis: Quebec’s First Auction: A Gentle Warm-Up, we discuss potential explanations for the low participation.

Speaking of Staying Warm…
This is our last newsletter for the year. Stay warm and enjoy the holiday season! We will be back in the new year with more on carbon and climate!

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