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Climate Change / Renewables
May 23, 2018
Once Again, All Current Allowances Sold Out in Ontario’s Joint Cap and Trade Auction
On May 23, 2018, the Ontario government posted the results of the second joint Ontario, Quebec, California auction of greenhouse gas emission allowances, held May 15, 2018. The report shows that all current vintage allowances from each of the three jurisdictions were sold. Additionally, around one half of the 2021 vintage allowances were sold.
The results from the second joint auction of these three Western Climate Initiative (WCI) participants are similar to the first joint auction. As described in an earlier post, the first auction also resulted in a sell-out of current allowances, though proportionately more future vintage allowances were sold in the first joint auction.
The sale price (auction settlement price) for the current allowances in the second joint auction is higher than in the first joint auction (C$18.72 vs. C$18.44). Some of that difference is due to changes in exchange rates – the auction results summary from the California Air Resources Board shows that the auction settlement price in $US only changed modestly between the first and second joint auctions (US$14.61 vs US$14.65).
According to the Ontario government press release issued on May 23, 2018, the expected proceeds to Ontario from the second auction are in the order of $467 million. Final numbers will be confirmed in a “post-auction proceeds report” to be issued on June 11, 2018.
The next joint cap and trade auction will be held in August 2018.