California carbon allowances steady at $14.50
California carbon allowances (CCAs) for use in the state’s mandatory compliance market saw prices continue to remain steady in the $14-$15 range.
California carbon allowances for delivery in 2013 ended the week closing at $14.50 apiece.
Volume for vintage 2013 California carbon allowances remained healthy with over 200,000 CCAs exchanging hands.
Last month the California Air Resources Board (ARB) saw all 14.5 million 2013 CCAs offered at its quarterly auction sell at a price of $14, well above the floor price of $10.71.
Combined with the sale of future California Carbon Allowances for delivery in 2016, the May auction generated over $283 million in revenue for the state.
As the price for CCAs continues to rise, regulated businesses will look to purchase ARB-approved carbon credits, which are typically sold at a discount to allowances.
Carbon credits can be generated from one of four project types-Forestry, Livestock, and Ozone Depleting Substance (ODS).
Regulated businesses can buy carbon credits to cover up to 8% of their emissions, however most analysts predict a shortfall in the available supply, perhaps by as much as 67% by 2020.