California Says First 'Cap and Trade' Auction Went Well
Monday, November 19, 2012
The auction was conducted online over a three-hour period. Hundreds of California businesses are required to either to reduce their emissions or purchase allowances to emit greenhouse gases.
Air Resources Board chair Mary Nichols says the 76 bidders in the first auction represented a broad cross-section of those required to participate in cap and trade.
NICHOLS: "The fact that the regents of the University of California or the Riverside Cement Company -- just to pick out a couple -- or Saputo cheese, were all signing up to participate in the auction to me indicates that people have got the idea of what this auction is about."
All the 2013 allowances available at this auction were purchased. They went for 9 cents more than the floor price, which is about $2 dollars less than futures were selling for before the auction. Nichols says this is not a cause for concern:
NICHOLS: "The goal of this auction is not to raise money, the goal of this auction is to achieve the cap at the lowest possible cost to all of the market participants."
There will be four more auctions held in 2013 -- and the allowances won't begin to be counted until the end of 2014.