By Richard Romano on November 29th, 2012
How much does it cost to emit one ton of carbon dioxide? Well, in California, that figure has been determined to be $10.09, determined via a “carbon auction” held last week under the state’s new cap-and-trade system. The auction was held to sell permits to emit greenhouse gases. Says the San Francisco Chronicle:
At the same time, all 23.1 million of the permits for use in the coming year sold out, with the state receiving three bids for every available permit. The high volume suggested to observers that companies covered by cap and trade – owners of power plants, oil refineries and other industrial facilities – were taking seriously their need to comply with the system, snapping up as many allowances as they could early on.
The auctions will be held four times a year. One factor that likely affected the initial bidding was the existence of several lawsuits challenging how the cap-and-trade system worked. It will be interesting to see how the systems shakes out in the next several auctions.