Message Font: Serif | Sans-Serif
No. of Recommendations: 0
California's cap-and-trade program is not getting off to a smooth start.

California Carbon ‘Crippled’ by Buyer Hesitation
California carbon is trading at a record low as legal threats, political opposition and rule changes plague the days leading up to the first auction of permits under the state’s greenhouse-gas program....

Futures contracts based on California carbon permits for 2013, the first year of compliance under the program, dropped 40 cents to a record $12.25 a metric ton yesterday, data compiled by CME Group Inc. (CME)’s Green Exchange in New York show. Prices are set to fall for a ninth straight week and are down $3.50 a ton, or 22 percent, for the year....Liquidity has been “crippled by buyers’ hesitation to sign forward contracts,” Thomas Marcello, a Bloomberg New Energy Finance analyst in New York, said yesterday....

Beginning next year, California plans to “cap” carbon emissions from power generators, oil refineries and other industrial plants and cut that limit gradually to achieve a 15 percent reduction by 2020....The California air board is giving away about 90 percent of the permits at the onset of the program and selling the rest at auction. The free allocations are set to shrink over time....

State regulators agreed to spend 18 months reviewing and not enforcing the ban, which prohibits companies from bringing low-emission electricity into California while sending more carbon-intensive power to other states. The air board issued some clarification to the rule on Nov. 6.

A spate of refinery upsets that drove retail gasoline prices in California to a record $4.671 a gallon on Oct. 9 also intensified opposition to the program, with Sacramento-based nonprofit CalWatchdog warning the same day that prices at the pump were “a pimple of what is to come” when the state starts capping emissions.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.