Companies bought roughly $360 million worth of pollution credits auctioned by the state. The credits permit the companies' greenhouse gas emissions and fund state clean energy and transportation programs, including the California high speed rail project.
The most recent sale still fell short of state projections, which estimate each quarterly auction will bring in $500 or $600 million, but it’s a sharp uptick from May and August, when companies bought almost nothing.
Dave Clegern of the California Air Resources Board says claims the program was in trouble were premature.
"You can’t really judge the program based on the amount of allowances sold at one or two auctions," says Clegern.
The cap-and-trade program is in a bit of a limbo. Businesses are challenging the program in court and it’s also set to expire in 2020 without state action.
The uptick comes after lawmakers extended California’s carbon emission limits in August, which could build momentum for a similar extension of cap-and-trade.
But the state’s non-partisan Legislative Analyst’s Office says the increased sales could themselves be temporary, due instead to businesses buying credits before a price increase next year.
"The demand for allowances could decrease again after the minimum price increases in early 2017," the LAO wrote in August.
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