California to borrow $500 million from carbon auction revenue for state expenditure

May 15, 2013 by California Carbon

Climate Connect News, London: California’s Governor Jerry Brown plans to take loan worth $500 million from the revenue generated from auction of emission allowances under the state’s cap-and-trade scheme. Certain groups in the state have objected to this move as the revenue from allowance auctions had been earmarked for clean energy programs only. The state government claims that the loan would be returned with full interest.

For better utilisation of the Greenhouse Gas Reduction Fund, a bill that advocates the establishment of the California Green Infrastructure Bank. The bank will be funded by revenue from California Cap-and-trade auctions, as a special vehicle to offer financing to private businesses or local government bodies for emission abating projects by means of specified tax exemptions and bond issuance. The bank would be expected to report its activities for the preceding fiscal year, which includes a specification of bonds sold and the applicable interest rates and the amount of other public and private funds leveraged by the bank’s assistance, annually by 1 February.

The Air Resources Board has so far completed two auctions of the carbon allowances. During the first auction held in November 2012, about 22.4 million allowances of 2013 vintage were auctioned at $10.09 per tonne, about 5.57 million allowances of 2015 vintage were auctioned at $10 per tonne. The first auction fetched about $282 million in revenue. The second auction was held in February 2013. During this auction, about 12.9 million allowances of 2013 vintage were auctioned at $13.62 per tonne and about 4.4 million allowances of 2016 vintage were auctioned at $10.71 per tonne. The second auctioned fetched $223 million in revenue. The third auction is scheduled for May 16, 2013.

For more information about this article, contact: info@climate-connect.com

  • Facebook
  • Google
  • LinkedIn
  • Twitter
  • Email