Companies spent more than $1 billion in California’s latest sale of carbon emissions credits, making it the largest auction since the controversial cap-and-trade program began in late 2012, state officials said Wednesday.
The reason: State officials dramatically expanded the pool of credits for sale to accommodate a surge in demand. That became necessary because the cap-and-trade market has been broadened since Jan. 1 to cover the carbon coming from motor vehicle tailpipes.
Cap and trade, a centerpiece of the state’s 2006 climate-change law, requires market participants to purchase credits in order to emit carbon. Until recently, that was limited to several hundred large industrial firms, such as food processors and cement manufacturers. But now the state has included transportation fuels in the program, requiring fuel wholesalers to obtain emissions credits. Read more