California, the world’s 10th-largest economy, said July 18 that it will consider increasing by one-third the number of free allowances issued to refiners, metals producers and other companies facing higher costs and even job losses as they seek to comply with a program designed to cut emissions 15 percent by 2020. The state Air Resources Board, which began the world’s second-largest carbon market in 2012, will release results of last week’s auction today.Notice that CA is now the world's TENTH largest economy? That's down from the NINTH largest economy.
“The market viewed the state’s plan as bearish and sold off,” Lenny Hochschild, head of global carbon trading for broker Evolution Markets in White Plains, New York, said by telephone. “Those companies that may receive free allocations would presumably have less buying to do than they otherwise would have.”
Wednesday, August 21, 2013
Carbon prices in California have slumped to the lowest level this year as the state weighs increasing the number of free permits offered to polluters in an effort to kick-start the fledgling market. Allowances for December delivery, which can be used by companies from BP Plc (BP/) to Chevron Corp. (CVX) to cover emissions as early as this year, dropped to $13.35 a metric ton on Aug. 19, the lowest since Dec. 10, according to data compiled by CME Group Inc. Permits auctioned Aug. 16 were expected to attract the lowest price since November, according to a Bloomberg New Energy Finance analysis.
So, offering a product that is going down in price (caused by too much supply and not enough demand) and then offering it for free is going to...do what for the economy in CA? I can tell you: it's going to do NOTHING for the economy of CA.