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Money From Cap-And-Trade Plummets (Again)

Billy Wilson / Flickr
 

Billy Wilson / Flickr

For the third time in four quarters, California’s most prominent program to fight climate change brought in a fraction of the revenue state officials projected.

Under the cap-and-trade program, companies must purchase pollution credits that allow their emissions. But results released Wednesday show the latest quarterly auction of those credits generated about $8 million—far less than the half-billion dollars the state typically expects.

Lawmakers use cap-and-trade revenue to fund clean energy programs and high-speed rail.

The weak results may be a symptom of uncertainty about the program’s future. Businesses may be holding off on purchasing credits until it’s clear the program will continue past a 2020 expiration date, as well as a legal challenge.

At the same time, companies still need to buy credits if they’re emitting greenhouse gases. A lack of interest could go along with reductions in emissions that have outpaced expectations.

Auction Results (in millions):

February 2015 630
May 2015 627
August 2015 645
November 2015 657
February 2016 517
May 2016 10
August 2016 8
November 2016 365
February 2017 8
Source: Legislative Analyst's Office