skip to main content
Back to all blog posts

Posted in: Ontario | Climate Change / Renewables | Quebec

Mar 2, 2017

A Return to Poor Results in the Latest California/Quebec Carbon Credit Auction

By David Stevens

On March 1, 2017, the Quebec and California governments announced the results of the tenth Cap and Trade System Joint Auction. The results show that very few of the available greenhouse gas allowances (credits) offered for sale were purchased (around 16.5%). This is a huge decline from the prior auction where around 90% of available credits were sold (described in an earlier post). The current results are more in line with the other 2016 auctions (described in earlier posts here and here), where most credits went unsold. Once again, the result is lower revenues for the governments - according to a news report, the California government will only receive around $8.2 million, rather than the $600 million that could have been received if all credits were sold.

Ontario's first Cap and Trade Program Auction of Greenhouse Gas Allowances will be held on March 22, 2017. As we described in a recent post, the reserve price for the Ontario auction will be calculated in the same manner as for the California/Quebec Cap and Trade System Joint Auction. Notably, however, the initial Ontario auctions will not be linked to the Joint Auction until 2018. That means that the proceeds from all credits purchased in the 2017 Ontario auctions will go to the Ontario government.

As we have previously noted, Ontario's Environmental Commissioner has identified a concern that the California market (assuming it continues with Cap and Trade, which is not a sure thing) will have abundant supplies of credits. This may mean that some of the amounts spent for credits by Ontario emitters after 2017 will go outside the province, thereby reducing proceeds from the sale of credits available to fund Ontario's Climate Change Action Plan. If those proceeds are lower than expected, it is likely that the scope of the programs under the Climate Change Action Plan will have to be revisited and reduced.

Related Blogs

Posted in: Ontario | Energy Policy | Climate Change / Renewables

Insights EnergyInsider
Ontario Publishes Draft Rules for Cap and Trade “Offset Credits” By David Stevens Oct 17, 2017 Ontario’s Ministry of the Environment and Climate Change (MOECC) has published two proposals related to several new or amended regulations to facilitate linkage of Ontario’s Cap and Trade program with California and Quebec (discussed in an earlier post). The September 22nd proposal d...

Posted in: Ratemaking | Ontario | Facilities

Insights EnergyInsider
OEB Approves Hydro One's Transmission Revenue Requirement, With Some Changes By David Stevens Oct 02, 2017 On September 28, 2017, the Ontario Energy Board (OEB) released its Decision on Hydro One’s transmission revenue requirement for 2017 and 2018. For the most part, the OEB accepted Hydro One’s forecasts and requests, although there are a number of areas where there are differences.

Posted in: Climate Change / Renewables | Consumer Protection | Ratemaking | Ontario

Insights EnergyInsider
Proposed Legislation Would Require Cap and Trade Costs to Be Identified on Ontario Gas Bills By David Stevens Sep 28, 2017 The Transparency in Gas Pricing Act, 2017 passed second reading on September 21, 2017, and has been referred to the Ontario Legislature’s Standing Committee on Finance and Economic Affairs. This proposed legislation, which is sponsored by an opposition party MP, would require that every gas...