300,000 California carbon allowances trade
California carbon allowances for delivery in 2013 saw steady demand this week as 300,000 allowances exchanged hands.
Price also remained locked in the mid-$14 range, as 2013 California carbon allowances closed the week at $14.35.
Surprisingly, allowance prices did not react much to recent announcements that some of California’s major nuclear facilities have closed temporarily as well as permanently.
When rumors of the permanent closure of the San Onofre nuclear plant began circulating last year, California carbon allowance prices reached a high of $20 apiece.
It is likely that Southern California Edison, the electric utility that operated the San Onofre plant, was aware that operations would be permanently suspended and had already factored this into their long term emission compliance plans.
To keep California carbon allowance prices for skyrocketing out of control, the state’s Air Resources Board allows regulated entities to purchase carbon credits to account for up to 8% of their annual emissions.
Carbon credits are produced from one of only three project types – Forestry, Livestock Methane Capture, and the Destruction of Ozone Depleting Substances.
The limited number of carbon projects could result in significant shortfalls in credit supply by as much as 67% in 2020.