Newsletter: Outlook for Tomorrow’s Carbon Auction


Read our analysis of California’s last auction results
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Outlook for Tomorrow’s Carbon Auction
Expect lower clearing prices and fewer bidders – but this is all normal for the last auction of the year.  

We expect the 5th auction for California carbon allowances will see fewer bidders, a lower ratio of bids to supply, and a lower clearing price than previous auctions. These are normal developments for the last auction of the year, and in line with recent price trends on the secondary market. We expect the long term prospective will outweigh current concerns regarding market over-allocation, and we anticipate that the reserve price will prevent the auction from being undersubscribed. Read the full outlook and analysis on our blog.

The November 19 auction will see 16,614,526 Vintage 2013 (V13) allowances and 9,560,000 Vintage 2016 (V16) allowances offered for sale at a reserve price of $10.71 a ton. Check our blog on Friday, November 22 after Noon PT for an analysis of the auction results.

Should Climate Risks be Included in Sustainability Reports? 

Historically, sustainability reporting has been largely about the firm’s impact on society and the environment. Is the firm using up a lot of resources? Polluting? How does it impact local communities’ lives and livelihoods? How does it treat its employees? And so much more. Recently though, stakeholders have also been asking for disclosure on risks and opportunities related to climate change. Are the firm’s operations at risk for a Category 5 hurricane? Will its supply chain be impacted by more frequent floods in Bangladesh? How will the firm procure water or agricultural goods in a dryer world? How will it pay for shipping in a world with high carbon prices?

It could be argued that including climate change impacts into sustainability reports turns sustainability reporting on its head: when a firm reports on the impact climate change may have on its operations, supply chain or business model, it is really reporting on the impact of the environment on the firm, not the other way round. So, should climate risks be included in sustainability reports? Read our analysis published on Triple Pundit.

More Publications on Carbon Markets:

  • Lessons Learned from California Cap-and-Trade: It’s not quite one year yet, but it’s never to early to start reflecting on how far we’ve come since the launch of the program. Four Twenty Seven contributed a thought piece to the International Emissions Trading Association (IETA) Greenhouse Gas Market 2013 report, published November 13. Our article looks at liquidity, price trends, supply and demand fundamentals, and regulatory challenges ahead – download the pdf.
  • A Primer on California Auctions: our primer Selling California Auctions (Carbon Market Tracker, In Focus #20, May 2013), published jointly with Carbon Credit Capital LLC provides a thorough description of the auction mechanics, participant dynamics, the role of utilities, and the use of auction revenues – a must-read for market participants!

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Four Twenty Seven provides research and consulting services on carbon markets, climate policy and climate risk. Email or call if your organization needs help with its climate strategy!

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Operation Supply Chain Workshop

This week is Operation Supply Chain Workshop in Las Vegas, organized by the Association of Climate Change Officers (ACCO). Emilie Mazzacurati will discuss metrics and indicators to monitor climate risks on November 18, and will teach a bootcamp on tools to quantify climate risks in the supply chain on November 19. Email us to learn more about this issue.


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